Exporting the American model: The postwar transformation of European business. ), Individualism and collectivism: Theory, method, and applicationsNewbury Park: Sage. Are indigenous approaches to achieving influence in business organizations distinctive? Competitive strategy. It also outlines efforts to reconcile the different institutional traditions and how IB can play a critical role in this respect. Institutional analysis and the role of ideas in political economy. Dau, L. A. In particular, it examines how the social and economic disruptions caused by Chinas Cultural Revolution during the countrys Treaty Ports Era (which spanned from 1842 to 1943) led to what were formal institutions transforming into informal institutions that have endured to this day. Mellahi, K., Frynas, J. G., Sun, P., & Siegel, D. 2016. Some of these norms can be so embedded and fundamental to the functioning of a social structure that even individual members may fail to realize they exist and just see them as the way things are (Chacar, Celo & Hesterly, 2018; Chacar & Hesterly, 2008). Under what institutional conditions does overseas business knowledge contribute to firm performance? Politics and institutionalism: Explaining durability and change. Journal of International Business Studies, 49(3): 324345. a. Sustainable competitive advantage: Combining institutional and resource-based views. Cross-border acquisition abandonment and completion: The effect of institutional differences and organizational learning in the international business service industry, 19812001. Thousand Oaks: Sage Publications. Later, we will discuss that this can serve not only as a means to learn how to better incorporate institutional work to help strengthen the IB literature, but also to develop ways for IB to contribute to institutional work beyond an IB audience. et al. Informal institutions and democracy. Approaches to the state: Alternative conceptions and historical dynamics. Varieties of new institutionalism: A critical appraisal. Liou, R. S., Chao, M. C. H., & Yang, M. 2016. Granovetter, M. 2017. Risk aversion and guanxi activities: A behavioral analysis of CEOs in China. Journal of Economic Issues, 40(1): 125. IB research has also focused on other informal institutions, such as social trust and guanxi, which can be important market differentiators, regardless of the formal institutions in place (Chua et al., 2009; Garrone, Piscitello, & D'Amelio, 2019; Kim & Li, 2014; Kshetri, 2015; Liu, Xia, Jiangyong, & Lin, 2019; Lu et al., 2018). In short, this editorial has provided an introduction not only to the SI but also to the topic of informal institutions and IB. Princeton: Princeton University Press. Another important logic that is common to the three theories is the process of diffusion (Arthur, 1994b; Coleman, Katz, & Menzel, 1966; Strang & Meyer, 1993). Please note that formal trusts often describe the distribution of assets other than funds in the IDI. Lewellyn, K. B., & Bao, S. R. 2017. Russias economy of favors: Blat, networking, and informal exchange. The established and widely-accepted theoretical frameworks (North, 1990; Williamson, 2000) hold that the social embeddedness is at the root of the behavioural process, and that it amounts to informal institutions.Ahlstrom and Bruton argue that when the formal institutions are weak or inchoate . Knight, J., & Sened, I. Most of these authors acknowledge that the frameworks are based on underlying assumptions and logics that are often incommensurable and with foundational contradictions with those of the other frameworks. They incorporate culture in general and, therefore, the societal value system. Goldstein, J., & Keohane, R. O. Social- and self-enforcement are the primary drivers of adherence to informal institutions. Furthermore, the IB fields cross-level nature can be particularly useful as institutions are typically conceptualized at the national or organizational-field levels of analysis, but those are not the only levels at which institutions can exist. Strategic Equilibrium refers to the static case where institutions tend to remain static over time. Teegen, H. 2003. International NGOs as global institutions: Using social capital to impact multinational enterprises and governments. North, D. C. 1990. In M. Canevacci (Ed. Journal of Economic Literature, 38(3): 595613. New York: Willey. Bond, M. 1987. One of these articles, entitled Impact of informal institutions on the prevalence, strategy, and performance of family firms: A meta-analysis, authored by Berrone, Duran, Gomez-Mejia, Heugens, Kostova, and van Essen, develops a new informal institutional embeddedness index to examine family firms. 17). Our assessments, publications and research spread knowledge, spark enquiry and aid understanding around the world. This SI offers a step to help address concerns about gaps in many areas and by providing IB papers that focus on conceptualizing and measuring informal institutions in different ways. While formal state institutions may be weak or deemed illegitimate in fragile and conflict-affected contexts, there are often informal institutions that persist and retain legitimacy. A cross-national investigation of IPO activity: The role of formal institutions and national culture. First, there has been limited work on informal institutions and IB in general. Journal of World Business, 53(6): 850861. Structure and change in economic history. However, it may also occur unconsciously, such as when social sentiment evolves slowly over time on an issue, leading to new and shifting norms and expectations. In particular, one could start with North (1990)s definition of institutions as socially developed rules, that include formal and informal rules, and add cognitive rules or schemata. The former is similar to the level of analysis of the other two perspectives. We would encourage further work on emerging and developing countries in regions such as Latin America, Africa, the Middle East, and Central Asia, among others; as well as comparative studies across different parts of the world. Sources of the new institutionalism. However, this distinction leads to other aspects that are important to consider. Asia Pacific Journal of Management, 19(23): 251267. Journal of International Management, 21(2): 100116. This focus on organizational fields lends itself well to IB, which helps explain the popularity of this institutional approach in the field. ), business enterprises (e.g., MNEs, small and medium enterprises, non-profit enterprises, etc. North, D. C. 1991. Political Studies, 46(5): 951957. Theory and Society, 37(5): 427. In addition, we had a full-day Paper Development Workshop (PDW) at the Academy of International Business (AIB) Annual Meeting and a panel at the Strategic Management Society (SMS) Annual Meeting to further provide detailed feedback from all the editors to the authors, have an open conversation among the editors and authors, and encourage cross-fertilization of ideas across the SI papers. Cao et al., (2018: 304) state that national culture is an important aspect of informal institutions. These can be enforced by a desire to fit in in terms of expectations of social appropriateness and can sometimes be morally governed (Scott, 2008, 2013). Academy of Management Review, 33(4): 9941006. Helmke, G., & Levitsky, S. 2006. Journal of International Business Studies, 49(3): 303323. Similarly, providing a discussion of reconciliation efforts between the three institutional traditions helps to show how IB could be at the center of this interdisciplinary conversation on formal and informal institutions. It focuses on a logic of instrumentality (instrumental rationality), where actors behave instrumentally vis--vis their official mandates or goals. Explaining social institutions. 2013. A comparison of multinationals in five countries. The internationalization of entrepreneurial firms from emerging economies: The roles of institutional transitions and market opportunities. By being oblivious to the recent paradigm shift from formal learning to informal learning platforms, higher education institutions (HEIs) disadvantage student learning in the digital age. Fourth, as a result of the points above, the mechanisms and effects of formal and informal institutions can range from being very similar to being vastly diverse. Lyles, M. A. Although OI would argue that institutions also enable actors, it has been criticized for having underspecified mechanisms and for not allowing much room for agency or rationality (Hirsch, 1997; Rao, Monin, & Durand, 2003). Multiple paths to firm innovation in Sub-Saharan Africa: How informal institutions matter. Sage, Thousand Oaks. (Eds.). Analytic narratives. At the same time, IB researchers from the three perspectives can learn much from each other and develop theoretical contributions by combining elements of the three, but this requires first clearly understanding the differences between them, then clearly explaining in the paper what those are and how they are relaxed or bridged. Zhou, K. Z., & Poppo, L. 2010. The rise of neoliberalism and institutional analysis. As mentioned earlier, all three perspectives incorporate logics for the process of change and diffusion of institutions. Marine Debris, Plastics, and Microplastics . The final column draws from efforts to reconcile or combine elements of the three perspectives. However, if one looks at the big picture, in terms of change over a longer period of time, the change will appear much more gradual. Academy of Management Proceedings, 180183. The relationship between IB actors and only formal institutions therefore misses a large part of the equation and can lead to incomplete and at times even inaccurate findings and conclusions. Therefore, in the long term, change will appear much more gradual and evolutionary. MIT Encyclopedia of the Cognitive Sciences: 111132. European Management Journal, 32(1): 132136. 1. Informal institutional frameworks can vary dramatically across contexts, so examining different ones can yield unique and important findings. Also, examining how home- and host-country informal institutions may affect local and foreign-firm strategic responses differently (e.g., Chacar & Vissa, 2005), and how international firms respond to supranational institutions that cross borders, is an area that could benefit from additional work. ), Handbook of cross cultural psychology, vol. Dau, L. A., Moore, E., & Kostova, T. 2020. They are socially shared rules, usually unwritten, that are created, communicated and enforced outside of official channels. Society and economy: Framework and principles. This SI has been an effort to launch additional work on the topic, which has been achieved with over 80 submissions, some of which appear in this SI and others that will start appearing in other IB and business journals over the next few years. These reconciliation efforts would thus help provide a more solid foundation for work in IB not only on informal institutions, but on institutions in general.

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