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Politics and Power in Multinational Companies: Integrating the International Business and Organization Studies Perspectives

Mike Geppert Friedrich Schiller University of Jena, Germany

Florian Becker-Ritterspach University of Applied Sciences, Berlin, Germany

Ram Mudambi Temple University, USA

Abstract The study of power and politics in multinational companies (MNCs) has been a niche area of study for both scholars of organization studies (OS) and international business (IB). Further, the awareness of each research community with regard to the efforts of the other has been rather superficial. Hence, bridge- building efforts to cross-fertilize ideas developed in IB and OS in order to enhance our understanding of the nature and role of politics and power in the MNC are overdue. In order to develop the basis for integration, we trace the conceptual developments in the two disciplines, that enables us to highlight particularly promising opportunities for integrative advances. Using a typology which differentiates among four ‘faces’ of power in the study of management and organization, we discuss how focusing on each of these four dimensions may help us to both see and make sense of different aspects of power relations and facets of politics in MNCs. We then use the ‘four faces’ framework to outline how OS and IB approaches can be integrated to develop a more complete understanding of politics and power in MNCs. Finally we suggest some directions for future research.

Keywords discourse and language perspectives on power, micro-politics, organizational politics, power in multinational companies

Corresponding author: Mike Geppert, Faculty of Economics and Business Administration, Chair of Strategic and International Management, Friedrich Schiller University of Jena, Carl-Zeiss-Straße 3, 07743 Jena, Germany. Email: [email protected]

656152OSS0010.1177/0170840616656152Organization StudiesGeppert et al. research-article2016

Introduction to the Special Issue

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Introduction

Multinational companies (MNCs) have been analysed as powerful economic and political players in the global economy. However, they are also complex organizational entities with intricate and multifaceted internal political processes. Some prominent scholars such as March (1962) and Pfeffer (1992) have highlighted the importance of organizational politics. In spite of these seminal works, the extant research on MNC internal politics has been surprisingly slim. With some notable exceptions (Becker-Ritterspach & Dörrenbächer 2011; Böhm, Spicer & Fleming, 2008; Dörrenbächer and Geppert, 2011; Forsgren, 2008; Mudambi & Navarra, 2004; Mudambi, Pedersen & Andersson, 2014), the topic has not been a major focus of either the international business (IB) or organizational studies (OS) literatures.

The mainstream IB literature has, in the main, retained a rather narrow approach that is theoreti- cally rooted in the seminal work of the Carnegie School (March, 1962). This has lent it a rather limited set of theoretical lenses including contingency, resource-based and agency perspectives (Bouquet & Birkinshaw, 2008; Mudambi & Navarra, 2004). By contrast, in OS literature the analy- sis of organizational politics (Burns, 1961; Mintzberg, 1983), power (Dahl, 1957; Etzioni, 1964) and its implications for managers (Astley & Zajac 1990; Pfeffer & Salancik 1978; Spicer & Böhm, 2007) has developed from insights drawn from a wide range of disciplines with relatively little integration, even within the field (Clegg, Courpasson & Phillips, 2006). However, despite the rich variety of politics and power perspectives in current OS literature, these concepts are rarely applied to the study of MNCs.

The foregoing discussion presents a powerful argument for a deliberate bridge-building effort to cross-fertilize ideas developed in IB and OS in order to enhance our understanding of the nature and role of politics and power in contemporary MNCs (Andersson & Holm, 2010). There is clearly a wide range of opportunities for scholars from both camps for joining forces and bringing together conceptual and empirical ideas in order to enrich our understanding of politics and power in MNCs. In this research effort, we make an important contribution to enhancing our understanding by treat- ing the MNC as a specific, multi-dimensional organizational form with rich and complex politics. We bring together a range of theoretical lenses and present empirical findings that provide deep insights into various facets of politics and power within MNCs. The different forms political behaviour of key players are crucial building blocks of this analysis.

In this article we begin by discussing the conceptual underpinnings for the study of power and politics in organizations. We then provide a brief historical overview of the theoretical foundations of the study of politics and power in the MNC within the two fields of IB and OS. Next, we take a closer look at historically grown differences in how organizational politics and power in MNCs have been conceptualized and studied in OS, in comparison to IB research. Here we will draw on the typology of Fleming and Spicer (2014), which is based on an extant literature review and dif- ferentiates among four ‘dimensions’ or ‘faces of power’ in OS research, in order to reveal how focusing on each of these might help us to both see and make sense of different aspects of political behaviour and power relations in MNCs.

We apply the four faces framework to provide a detailed overview of the articles of our Special Issue and demonstrate how each of the papers reflects on the faces.1 In so doing, we are able to demonstrate how they help to conceptualize power relations in MNCs and interpret political activities through empirical analysis. In our concluding section, we will briefly sum- marize the contributions – in terms of unit of analysis, aspects of power and politics analysed, theories and ideas that have been advanced – and highlight opportunities for integration and cross-fertilization of ideas between researchers from IB and OS. Finally we suggest some direc- tions for future research.

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Conceptual Underpinnings for Studying Power and Politics in MNCs

Research on organizational power has been influenced largely by the seminal work of Lukes (1974/2005), who developed a three-dimensional model for the study of power. The one-dimensional view of power goes back to ‘pluralist’ studies on power by scholars such as Dahl (1957) who argue that actors relate their ‘interests to what they actually want or prefer, to their policy preference as manifested by their political participation’ (Lukes, 1974, p. 34). This is very much in line with Weber’s causal view of power ‘to get others to do what you want them to do and if necessary against their will’ (cited in Hardy & Clegg, 1996, p. 623). Ideas of political coalition building (March, 1962) and of resource dependency theory (French & Raven, 1960; Pfeffer & Salancik, 1978) also fit in here. Lukes then introduces a second, often non-visible, dimension of power which, as summarized by Clegg et al. (2006, p. 210), ‘come(s) into play, especially, when choices are made concerning what agenda items are ruled in or ruled out; when it is determined that, strategically, for whatever reasons, some areas remain a zone of non-decision rather than decision’. The third dimension goes back to ‘reformist’ studies of power (Bachrach & Baratz, 1963), stressing ‘that not all men’s wants are given equal weight by the political system’ (Lukes, 1974, p. 34). In other words, not everybody is able to politically participate in decision-making and decision-making often takes place in strict boundaries where agendas have already been set or manipulated. The three-dimensional view, which Lukes also calls the ‘radical view of power’, pays close attention to systemic aspects of power by stressing ‘that men’s wants may themselves be a product of a system which works against their interests, and in such cases, relates the latter to what they would want and prefer, were they able to make the choice’ (p. 34).

The work of Lukes has inspired research, including by Clegg (1989), Clegg et al. (2006) and more recently Fleming and Spicer (2014), that applies multi-dimensional approaches to study the dynamics of politics and different facets of power relations in organizations. These applications also involved some criticism of the original model and have led to significant adaptations. In par- ticular, the universal claims that Lukes makes when outlining his ‘radical view’ have been seen as problematic because of the implicit assumption that hegemonic power has become a normal form of organizational control in contemporary capitalism. This view neglects the findings of compara- tive institutionalism that there is not just one capitalist society, but rather many diverse forms of capitalism (e.g. Whitley, 1999). Lukes’ approach also neglects the possibility of active forms of social agency by paraphrasing the Marxist slogan that the rulers are in power and will stay in power as long as they are able to manipulate the ‘real interests’ of the ruled. Further, Clegg et al. (2006) criticize the inherent ‘paradox of emancipation’ within the radical view, i.e. ‘if people are system- atically deluded about their interests they cannot emancipate themselves’ (Clegg et al., 2006, p. 213).

In a review about the study of power in management and organization studies, the authors dis- tinguish four ‘faces’ of organizational power in their extensive review of the relevant literature (Fleming & Spicer, 2014). Two faces – ‘coercion’ and ‘manipulation’– are positioned at the ‘epi- sodic’ or surface level of power relations (see also Clegg et al., 2006). Coercion is related to the one-dimensional view of power and defined as direct ‘mobilization of power’ by actors. Manipulation is related to the two-dimensional view of power and defined as ‘attempts to ensure action and discussion occurs within accepted boundaries’ (Fleming & Spicer, 2014, p. 241). Coercion and manipulation have been the main focus of classic functionalist studies on power in both IB and OS, e.g. studies on micro-politics in MNCs. The other two ‘faces’ of power are posi- tioned at the systemic or deeper organizational levels, and go beyond organizational boundaries to bring in societal-level influences. The third face, ‘domination’, is defined as ‘attempts to make relations of power appear inevitable and natural’ (p. 241). The fourth face, ‘subjectification’, is

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defined as ‘attempts to shape sense of self, experience and emotions’ (p. 241) and placed at the ‘deeper’ or ‘systemic power level’ (see also Clegg et al., 2006, pp. 294–298). While domination is directly related to the three-dimensional view of power, the ‘face’ of subjectification emerges from Foucault’s seminal studies on disciplinary regimes (1977), and is accordingly seen as another sys- temic force. Both faces are closely linked to studies on power in MNCs focused on the role of discourses and language in shaping organizational structures and construction of subjective identi- ties of key actors. The latter approach has only recently been adopted in the study of the MNC (Balogun, Jarzabkowski & Vaara, 2011; Vaara & Tienari, 2008).

Further developments of the multi-dimensional model in the field of OS have concentrated on the development of mid-range and more context-specific theories of organizational power. Based on Foucault’s theory of power, Clegg et al. highlight

that rationalities are always situational. And because they are always contextually situational they are always implicated with power. No context stands outside power. If that were the case, then power would exist nowhere, outside of understanding, outside of possibility, outside of sense. Different power actors operate in and through different rationalities, which have different rules for producing sense and, at the more formal outer limits, for producing truth. (Clegg et al., 2006, p. 240)

This leads us back to our initial argument that MNCs in particular, which operate across national divides, are highly complex and fragmented organizations. In short, MNCs are constituted by diverse contextual rationalities (Morgan, 2001) that trigger different forms and dynamics of social agency in the relevant political processes. However, the nature and forms of political behaviour that will be observed in the study of MNCs are closely linked to the conceptualization of power that scholars apply in their analysis.

There are currently two streams within IB and OS that try to capture social agency and the micro- dynamic relations between politics and power structures. They both focus on the important question of how political contests and struggles arise in MNCs and how they can then be linked to organizational power. One stream concentrates on the dynamics of micro-political strategizing related to the different and often contradictory interests and identities of key actors (Clark & Geppert, 2011; Geppert & Dörrenbächer, 2011). A strong concern of this stream is the multiplex embeddedness, situatedness and positioning of actors who structure their interests, identities and their power (Becker-Ritterspach, 2006; Becker-Ritterspach & Blazejewski, 2016; Becker-Ritterspach & Dörrenbächer, 2011; Blazejewski, 2009; Geppert & Williams, 2006; Geppert, Williams & Wortmann, 2015).

The other stream emphasizes the discursive nature of organizational power struggles and the role of political sensemaking (see also Geppert & Dörrenbächer, 2014 and 2016, for an overview). Key studies from each of the two approaches historically focused on different dimensions of power (Clegg et al. 2006; Fleming & Spicer, 2014). Micro-political studies in both OS and IB have mainly concentrated on the role of ‘coercion’ and ‘manipulation’ in struggles within MNCs. Discursive studies, most of which are in the OS field, predominantly studied political struggles based on language and paid more attention to the role of ‘domination’ and ‘subjectification’ within MNCs. However, studies focused on language often do not pay sufficient attention to the micro- political and actor-centred aspects of the games played in and around MNCs.

IB and OS Approaches to the Study of Power and Politics in MNCs

The foundation of IB research on power and politics lies largely in functionalist and rationalistic organization theories (Buckley & Casson, 1976). Major works in IB about the role of politics in the

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business firm use the fundamental insights of Berle and Means (1932) who uncovered the diver- gence between the interests of managers and shareholders in large American corporations beginning in the late 19th century. However, most work on the role of politics in IB firms can be traced to the work of March (1962) whose work laid the foundations of what has become known as the Carnegie School approach. Some of these Marchian insights were incorporated into the detailed analysis of managerialism in the behavioural theory of the firm (Cyert & March, 1963). The Carnegie School approach recognized that organizations are marked by interest diversity, conflict and coalitions.

Starting in the 1980s, new and more far-reaching developments in IB significantly broadened the analytical focus by applying ideas of contingency theory and agency theory. Contributions tak- ing their starting point from contingency theory crucially emphasized the role of environmental and structural embeddedness as a key source of conflict. While organizational politics and power are not central to all of these contributions, a range of papers (Doz, Bartlett & Prahalad, 1981; Ghoshal & Nohria, 1989; Nohria & Ghoshal, 1994) show that MNCs are made up of divergent actors and interests and that politics, power and conflict are a key element of organizational life. Focusing on the different organizational units of the MNC, root causes of politics and conflict are seen in different organizational rationales that are functionally constituted by the respective units’ embeddedness in a specific task or market environment. In early literature this was suggested to arise from the headquarters ambitions for global integration and subsidiaries’ orientation towards local responsiveness (Mudambi, 2011).

IB scholars highlighted the negative consequences of organizational politics. Subsequent litera- ture sought to devise appropriate organizational mechanisms to control or even avoid it. In this view, a key function of managers, in particular those located at headquarters and at the helm of the organization, is to maintain overall organizational rationality by keeping politics, conflict and the pursuit of power in check.

Contributions rooted in agency theory build on Marchian insights. They emphasize that politics and conflict within the firm stem from two interrelated sources: managers’ pursuit of self-interest and interest divergence among the firm’s actors. In the seminal works on agency theory, the man- agers are at odds with other stakeholders in the firm, most notably the shareholders (Fama, 1980). Hence, the main objective of this substantial literature is to derive mechanisms that alleviate (or in a perfect world, eliminate) the divergence of interests among the firm’s stakeholders (Himmelberg, Hubbard & Palia, 1999; Mudambi & Nicosia, 1998). Mechanisms to align incentives of managers and shareholders do not affect the fundamental political processes at work, but harness this energy to generate positive rather than pernicious outcomes. This literature is closely related to main- stream transaction cost economics (Williamson, 1975), wherein the concern is with efficiency and performance. It views the exercise of political power as malignant, highlighted in a telling quote: ‘power explains results when the organization sacrifices efficiency to serve special interests’ (Williamson & Ouchi, 1983, pp. 29–30). This is in contrast to the view from organizational studies that takes its inspiration from resource dependency theory (Pfeffer & Salancik, 1978). Rather than seeing the existence and exercise of political power as inefficient, this view argues that ‘political processes, rather than being mechanisms for unfair and unjust allocations and appointments, tend toward the realistic resolution of conflicts among interests’ (Salancik & Pfeffer, 1977, p. 3).

In the 1990s, the rational, functional and managerial understanding of politics, power and con- flict in contingency and agency theory was integrated with the resource dependence perspective in IB research. Two streams of IB research stand out in this regard: research on business networks and the work on subsidiary-level initiatives, both of which build to varying degrees on network theory (Håkansson, 1982), resource dependence theory (Pfeffer & Salancik, 1978), resource/knowledge- based views (Barney, 1991; Grant, 1996) and the intra-organizational power perspective (Hickson, Hinings, Lee, Schneck & Pennings, 1971).

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Both streams mark a shift to a more generic politics perspective where power and conflict are seen as a normal part of the functioning of organizations. In this view, MNCs are constituted by struggles, interest divergence, conflict and coalitions. Political behaviour in MNCs manifests itself in the form of ongoing competition and bargaining processes in which different organizational subunits including the headquarters pursue different (rational) interests and leverage different bases of power to gain influence. Reflective of network, resource dependence or resource/knowl- edge-based and intra-organizational power theories, the sources of power are seen as functionally derived, including: network centrality and position, functional positions and formal authority, as well as the value of knowledge or resources held, resource exchange relationships and net depend- encies between units and their internal and external network environments (Andersson, Forsgren & Holm, 2007; Bouquet & Birkinshaw, 2008; Forsgren, Holm & Johanson, 2005; Mudambi & Navarra, 2004).

In much of the IB literature, organizational politics in MNCs is largely confined to the organi- zational level. Specifically, interest divergence, power, conflict and coalitions are theorized at the level of organizational units with little concern for the sub-organizational or at the level of individual actors. And even where individual actors such as subsidiary managers are considered (Birkinshaw & Hood, 1998; Mudambi & Navarra, 2004) their interests and behavioural orienta- tions are equated with the organizational units that host them. While we see the acceptance of the MNC as an organizational context characterized by both competition and cooperation, the con- cept is maintained at the subunit level, with subsidiaries or subsidiary managers rationally seek- ing to enhance the subsidiary’s influence. This organizational-level focus means that the micro-foundations of inter- and intra-unit politics in MNCs are not studied.

Starting in the 2000s, two streams of organizational theory that emphasize the micro-level poli- tics and the systemic constitution of power in MNCs began to find their way into the field of IB. These are the micro-politics (Almond & Ferner, 2006; Becker-Ritterspach, 2006; Dörrenbächer & Geppert, 2006; Kristensen & Zeitlin, 2005) and the critical discourse perspectives (including the context of language) (Balogun et al., 2011; Frenkel, 2008; Vaara & Tienari, 2002, 2008; Vaara, Tienari, Piekkari & Santti, 2005).

Micro-political contributions have their main theoretical roots in actor-centred comparative institutionalism. Micro-political perspectives see MNCs as first and foremost populated by indi- vidual actors who behave politically in social interaction, i.e. they are driven by their own motives and goals. Replacing organizational rationality with the intentionality and interest-driven behav- iour of individual actors or groups of individual actors, these contributions emphasize that we can only understand organizational behaviour in MNCs if we consider the political nature of agency at the micro level (Becker-Ritterspach & Blazejewski, 2016). In line with a generic politics perspec- tive, the organizational behaviour of MNCs is constituted by political objectives, interest diversity and power mobilization. Actor interests and behavioural orientations are formed by their social embeddedness (Becker-Ritterspach, 2006; Becker-Ritterspach & Dörrenbächer, 2011). Depending on the contribution, this social embeddedness can comprise one or more levels of analysis (e.g. national institutional embeddedness, organizational embeddedness and personal situations) and is seen as more or less determining. While micro-political approaches often adopt episodic power perspectives in that they consider how actors mobilize resources to further their interests in specific organizational situations (e.g. plant closure), they also move into systemic power perspectives to the extent that they see actor interests and actor power (ability to enter social relationships or the mobilization of resources) as socially constituted by unquestioned organizational rules and societal institutions (Morgan & Kristensen, 2006).

The last stream of research that we wish to discuss here comprises a range of contributions that can be subsumed under the label of critical discourse or language perspectives. These perspectives

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are mainly rooted in critical theory, in particular the contributions of post-modernists and post- structuralists (e.g. Foucault, 1973, 1980). Adopting the lens of these contributions, MNCs are seen as constituted by discursive struggles and competing efforts of sensemaking. These struggles unfold between different actor groups that battle over power and hegemony. A key extension afforded by these contributions is that both identities and material situatedness can form the basis of discursive struggles. For instance, identity, status, control over resources and personal pecuniary benefits may all be threatened as a result of mergers and acquisitions or plant closures (Vaara & Tienari, 2008). While discursive struggles may reproduce and reflect structures of domination, they may also challenge them (Levy, 2008; Böhm et al., 2008).

The hegemony of a discourse, in turn, is related to its legitimacy that is maintained through reference to broader societal conceptions, norms and ideologies. As the medium of discourses language, communication, language skills, language policies and linguistic artefacts become a focal point of analysis in these contributions (Geppert, 2003; Vaara et al., 2005; Vaara & Tienari, 2011). While critical discourse perspectives, which predominantly draw on critical discourse anal- ysis (CDA), mark the arrival of discursive and systemic power perspectives to the field of IB, these contributions are rather weak in considering the micro-level constitution of organizational politics and power. In comparison to micro-political approaches, there is not much focus on individual actors and how their specific organizational or societal embeddedness affects the political behav- iour of actors at the micro level and thereby organizational-level outcomes (Becker-Ritterspach & Blazejewski, 2016). Moreover, there is some criticism related to the influence and role of CDA in contemporary OS. Based on alternative readings of Foucault’s seminal work on discourse and power, it has been argued that the focus on discursive ‘hierarchies’ and ‘order’ in CDA studies neglects the ‘transformative’ potential of critical OS scholars within the research process, when they become actively engaged in the study of discursive practices and organizational power rela- tions (see e.g. Curtis, 2014).

We can see from our brief discussion above that the field of IB has moved from analysing poli- tics exclusively through the lens of efficiency toward a generic politics approach. More recent theoretical developments as expressed in the micro-political and critical discursive perspectives call for further refinement and empirical application. While IB has started incorporating some of the cutting-edge insights from OS, more clearly needs to be done. Equally, OS can learn from the rational foundations of IB. Research in OS is overly based on embeddedness, which under-repre- sents the role and effect of individualism. Thus, both IB and OS could advance by incorporating more sophisticated research from the nascent work on micro-foundations (Felin, Foss, Heimeriks & Madsen, 2012).

Different Faces of Power in MNCs: Key Ideas and Findings in our Special Issue

Recent research has emphasized that the structures of MNCs have become more complex and fragmented. The new and increasingly multi-faceted structural features of these organizations ‘has made MNCs more like political coalitions and less like (hierarchical) military formations’ (Mudambi & Navarra, 2004, p. 386). This suggests that we study MNCs as federations, where the headquarters and the subsidiaries are involved in perpetual bargaining processes, or as ‘societies’ by emphasizing that there is not just one central power unit, but diverse power centres each with a different set of influential actors (Morgan & Kristensen, 2009; Mudambi et al., 2014). However, there is also new research revealing that power structures of MNCs remain largely hierarchical (Andersson & Holm, 2010) and asymmetrical in favour of headquarters management (in this Special Issue, Dörrenbächer & Gammelgaard, 2016).

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The contributions of our Special Issue shed some light on the enduring role of hierarchical power relations in the MNC but also show that structural features as emphasized by contingency and resource dependence perspectives are not sufficient to understand the underpinnings of organi- zational politics and dynamic power relations. In order to gain deeper understanding, one must pay close attention to the role of social agency, i.e. the impact of diverse institutional logics, interests, identities and discourses. By emphasizing both the active and passive roles played by social agency, we are able to see different facets of political processes within and around MNCs. Intra- and inter- organizational forms of politics have the potential to both stabilize and/or de-stabilize established power relations.

In the following section we will take a closer look, first, at the forms and dynamics of social agency which come into play in micro-political and language games and, second, the faces of power which each of our six papers will highlight. Our discussion draws on Fleming and Spicer’s framework (2014), which was introduced and discussed in previous sections.

Two papers in our Special Issue deal mainly with one of the two faces of power, i.e. coercion. These two papers, by Whitford and Zirpoli (2016) and Dörrenbächer and Gammelgaard (2016), have the closest links with current debates in IB research. The first paper focuses on MNCs as network firms with fragmented power structures that are conceptualized as ‘bundles of coalitions’. The focus here is on political contests between key actors and coalitions which apply ‘discursive resources’ in order to mobilize support across blurred organizational boundaries, i.e. across internal and external production networks of the MNC. The face of power that these authors highlight in their historical study of Fiat, the global car manufacturer, is coercion. The focus is on political strategies of key actors and coalitions of actors and how these actors are able to use discursive resources by purposefully framing and thus shaping the production network. The second paper, by Dörrenbächer and Gammelgaard, concentrates on the episodic face of coercion, analysing a spe- cific aspect of political ‘framing’, issue-selling. The paper focuses on a key topic in the IB litera- ture: subsidiary initiative-taking. In comparison to Whitford and Zirpoli, the authors provide a broader view in the analysis of the coercive face of power. Besides political strategizing, the empir- ical cases analysed show the importance of considering tactical elements in micro-politics that arise around subsidiary initiatives. And in contrast to Whitford and Zirpoli, who emphasize the weakening of vertical/hierarchical power relations in their case study, these authors highlight the on-going role of hierarchical power by stressing that subsidiary issue-selling activities can always be stifled by the ‘power to’ (of the headquarters) which has the hierarchical power to reject subsidi- ary initiatives. Both papers concentrate on episodes highlighting the coercive face of power. Aspects of the manipulative face, however, such as non-decision-making or agenda-setting by headquarters actors which would block successful framing or issue-selling, are not considered.

The remaining four papers in our Special Issue refer to all four faces of power but differ signifi- cantly in how deeply they reflect on the two deeper and systemic faces of power. The third paper, by Bjerregaard and Klitmoeller, focuses on the important topic of knowledge-sharing in MNCs and takes a conflictual practice view, based on the work of Bourdieu. In their case study of an MNC operating in Mexico they concentrate on the question of how actors’ social positioning inside and outside the firm, combined with their career opportunities, shapes the character and dynamics of intra-unit conflicts. The authors apply the concept of ‘habitus’ that relates to both episodic faces: coercion and manipulation. They show how and why local managers and white-collar workers are better equipped than blue-collar workers to develop long-term career strategies and position them- selves, based on their socio-economic and cultural resources (capital) and thus are able to manipu- late and dominate the existing subsidiary management control system. Additionally, the paper points to aspects of subjectification related to gender, stressing that blue-collar female workers in particular are silenced. These findings point to systemic dimensions of the habitus of these

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workers, i.e., the manifestation of subjugation because the actors are not aware of their political behavioural rationales. It is also shown that blue-collar workers’ need to accumulate socio-economic resources (capital) leaves little room for accumulating other resources (capitals) that would enhance their strategic positioning. Conflicts between white-collar workers and local managers are linked mainly to struggles about cultural capital (resources). Additionally, local managers manipulated access to English language classes, limiting opportunities for identity construction, including the career paths, of white-collar workers.

The other three papers, by Hong, Snell and Mak (2016), Whittle, Mueller, Gilchrist and Lenney (2016) and Koveshnikov, Vaara and Ehrnrooth (2016), focus more explicitly on language issues within MNCs, based on new conceptual developments in OS, i.e. discourse and narrative analysis.2 The first two papers study sensemaking and sensegiving processes between headquarters and sub- sidiary key actors, but then present quite different results in terms of the outcome of these pro- cesses. The paper by Hong et al. concentrates on the two episodic faces of power and also on levels of domination by comparing stages and degrees of knowledge sharing (assimilation) between Japanese expatriates and local Chinese managers. They show that the local institutional context matters in terms of how contestative sensemaking can be overcome by cycles of sensemaking and sensegiving, which encouraged local knowledge creation in one of their two cases. More contested and less integrative sensemaking was observed in the other case study, which is explained to a certain extent by the dominance of post-colonial attitudes of Japanese expatriates that hindered consensual sensemaking and mutual learning between headquarters and subsidiary actors. The paper by Whittle et al. very closely links episodes of coercion and manipulation with systemic dominance of the MNC’s US headquarters, which stifled initiative-taking and created self-censoring and strategic inaction of subsidiary key actors in Britain. An in-depth analysis of language games shows how both the dominant power play of headquarters and the identity construction of subsidi- ary actors (subjectification) led to self-censoring. The British subsidiary’s management developed the feeling that certain issues could not be discussed. As a result, British managers felt that self- interested protectionism and inaction were more appropriate than active initiative-taking and issue- selling. This expands the findings of Dörrenbächer and Gammelgaard by showing that subjectification may get in the way of issue-selling efforts. It was the actual experience of the sub- sidiary managers that mattered most when dealing with the headquarters and just not the formal hierarchical power position of the headquarters to reject or ignore subsidiary initiatives in the case studied by Whittle et al. The last and sixth paper of our Special Issue sheds more light on the sys- temic aspects of language issues that arise within MNCs, showing how stereotyping comes into play. It stresses that forms of coercion and manipulation expressed in stereotyping and reactive talk need to be related to the subjective identities of Finnish expatriates and Russian locals. The case study by Koveshnikov et al. demonstrates how cultural stereotyping is used in language to defend and enhance the self-image and self-esteem of each side, headquarters and subsidiary management. In the view of the authors, the only way to get out of these manipulative and negative subject identity-enhancing political processes is to create social spaces for self-reflective talk which allows more integrative and less contestive forms of sensemaking, an issue which has also been raised by Hong et al.

Concluding Comments and Directions for Future Research

We see our Special Issue as a bridge-building exercise between IB and OS approaches to studying politics and power in MNCs. Research in both fields has studied not just specifically power and politics in the MNC but MNCs in general from very different theoretical angles based on different methodological approaches. The first serious bridge-building attempt was made more than 20

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years ago in 1993 by Ghoshal and Westney with the publication of the volume Organizational Theory and the Multinational Corporation. However, this pioneering initiative had problems and ‘the hopes of Ghoshal and Westney…that there would be more interaction between the different perspectives tended to wither’ during the 1990s (Collinson & Morgan, 2009, p. 14). They saw the main reasons for this problem in: (a) the preference of IB scholars to remain faithful to established paradigms, which made it difficult to move beyond the efficiency logics of transaction costs and strategic fit and (b) OS scholars’ lack of interest in the study of the MNC as a unique organiza- tional form (p. 14). Our Special Issue however confirms another observation that the authors made, that there have been some significant changes in both fields in the last decade or so, leading to greater ‘common ground’ in the study of MNCs between scholars of the formerly divided camps (p. 18).

This is certainly also true for the study of politics and power in MNCs. The four papers by Klitmoeller et al. (2016), Hong et al. (2016), Whittle et al. (2016) and Koveshnikov et al. (2016), who reflect on multiple faces of power, apply new critical discursive approaches for the study of games played in and around MNCs and contribute especially to current debates on conflictual knowledge sharing, political sensemaking and stereotyping. However, even when the other two papers by Whitford and Zirpoli (2016) and Dörrenbächer and Gammelgaard (2016) perhaps are more closely related to classic IB research and thus largely reflect on the first face of power, both papers also draw on new ideas in OS. The first authors apply Marchian ideas on political coalition- building to internationally operating network firms, based on sociological frame analysis methods. The latter authors introduce new conceptual ideas of politicking and issue-selling tactics to subsidi- ary initiative taking in MNCs. In Table 1 we provide a general overview of the contents of our Special Issue in terms of: the unit of analysis, the aspects of power and politics analysed, the theo- ries advanced, and crossroads for bridge-building and cross-fertilization in future research.

In line with the goals of our Special Issue, we see two directions for further bridge-building and cross-fertilization. On the one hand, we still see substantial scope for IB to learn from OS. First, we suggest that IB research could gain from enriching classical rational and quantitative studies with social-constructivist and discursive ideas and related research methods. In this sense it might be quite useful for future research on subsidiary-initiative taking for instance to move beyond func- tionalist resource dependency arguments, based on the assumption that the possession or control of critical resources can straightforwardly be linked to subsidiary entrepreneurship and active agency (see also Saka-Helmhout & Geppert, 2011). One way forward would be to focus on the wide range of discursive struggles of all involved parties and actors inside and outside the MNC. From this perspective, active as well as inactive behaviour of subsidiary management cannot be explained only in reference to subsidiary access or lack of access to critical power resources. Instead, the ways that they present or sell their initiatives must be seen as a central part of the various political ‘language games’ played in and around the MNC. The analysis of such games, which cannot be sufficiently captured in reference to resource dependency logics, provides deeper insights about both the silencing of powerful players and the gaining of ‘voice’ by weaker actors involved sub- sidiary initiative-taking. Moving beyond this Special Issue, there is still substantial scope in IB to consider not only different faces of power but also their interaction and interrelatedness. Considering the different faces of power is not a mere esoteric or intellectual exercise by critical management scholars in IB. Rather it serves to develop a better understanding of the strategic choices within and around firms that operate internationally (Geppert, 2015).

OS research, on the other hand, could gain from IB insights on politics and power along four lines. The first line involves recognizing: (a) the domains within which power is exercised; (b) the role of hierarchical structure on power relationships. With regard to (a), from its very inception the IB literature recognized and studied the structural aspects of the MNC (Gupta & Govindarajan,

Geppert et al. 1219

2000; Mudambi et al., 2014). Thus, it was recognized that subsidiaries with complementary activi- ties (like an R&D unit and a sales unit) were naturally collaborative. In contrast, subsidiaries with substitutive activities (like two sales units with overlapping territories) were naturally competitive. Recognizing these generic collaborative and competitive forces can provide new insights to OS research. With regard to (b), key objects of study for IB researchers are the headquarters–subsidi- ary (hierarchical) and subsidiary–subsidiary (lateral) relationships. The nature of such internal competition has received a great deal of attention within the IB literature, leading to key insights

Table 1. The contributions of this Special Issue.

Authors Unit of analysis

Aspects of power and politics analysed

Theories or concepts advanced

Crossroads for bridge- building and cross- fertilization

Whitford & Zirpoli

MNC as network firm

Role of discursive resources and relational embedding in political coalition- building in MNC networks

Political contests in MNCs based on political coalition- building efforts

Paper focuses on powerful cognitive frames and narratives; here are bridges to and cross-fertilization with discursive studies of power and politics in MNCs

Dörrenbächer & Gammelgaard

Subsidiary initiatives

Interplay of MNC hierarchical, subsidiary and subsidiary-issue- selling power

Politicking and issue selling in subsidiary initiative taking

Broadening of mainstream IB debates on subsidiary initiative-taking and issue-selling tactics by pointing to the special role of asymmetrical power relations and politics

Bjerregaard & Klitmoeller

Knowledge and practice sharing in MNCs

Micro-political conflicts in MNC practice sharing

Linking micro-politics with a Bourdieuan practice approach

Broadening of mainstream IB debates on knowledge transfer by stressing the conflictual constitution of the MNC and pointing to interplay of pluralistic contexts and agency

Hong, Snell & Mak

Knowledge sharing and assimilation in MNCs

Political sensemaking in MNCs

Political aspects of knowledge transfer and assimilation

Paper points to ‘political clout’ of locals which could trigger new debates of post-colonial studies pointing to expat domination of MNCs originating from developed economies

Whittle, Mueller, Gilchrist & Lenney

Discursive enactment of subsidiary– headquarters relations

Political sensemaking in MNCs

Role and impact of self-censoring and inaction in discursive construction of MNC power relations

Findings of paper about discursive construction of inaction and self-censoring could cross-fertilize with IB on subsidiary innovation and entrepreneurship

Koveshnikov, Vaara & Ehrnrooth

Discursive enactment of headquarters and subsidiary relations

Identity work and cultural stereotyping

Role and impact of stereotype- based identity work in discursive construction of MNC power relations

Paper’s findings on stereotyping could be related to ideas of micro- political and language game playing in MNCs

1220 Organization Studies 37(9)

into the emergence of a diversity of subsidiary roles and levels of intraMNC influence (Cantwell & Mudambi, 2005). These insights on the relationships between structure and power have the potential to inform future OS research.

A second promising line for future IB research lies in the recognition that firms (and MNCs in particular) are embedded within larger social systems, so that the manager–shareholder conflicts analysed within classical agency theory may be too narrow (Gavetti, Levinthal & Ocasio, 2007). As firm boundaries become increasingly porous and open systems predominate, the level of analysis at which politics is operationalized moves beyond the firm to the broader ecosystem. These ecosystems may be seen as global value chains (GVCs) run by orchestrating firms (Cano-Kollmann, Cantwell, Hannigan, Mudambi & Song, 2016). When such firms are successful, they are able to disaggregate activities and externalize them, yet maintain tight control over the entire GVC (Mudambi, 2008; Mudambi & Puck, 2016). The processes through which they are able to exercise nearly absolute power within their GVCs are essentially political. However, a systematic analysis of GVCs as open systems through the lens of organizational politics has yet to be carried out. Numerous streams within the OS literature, including sense-making and social identity, can be leveraged in this endeavour.

A third line of potential IB research involves re-introducing to OS recent refinements in the micro-political perspective. In this regard a range of scholars including the work by Klitmoeller et al. (2016) in this Special Issue points towards the development of more refined conceptualiza- tions of how complex combinations of organizational and institutional embeddedness of actors, their positioning and interactions (Becker-Ritterspach, 2006; Hotho, Becker-Ritterspach & Saka- Helmhout, 2012) define the micro-foundations of organizational behaviour and organizational out- comes in MNCs. Hence, while having their roots in the micro-political perspectives of OS, a range of IB contributions has advanced the micro-political perspective within the context of MNCs. These advancements and refinements, in particular with regard to our understanding of how actors’ situatedness and their strategizing are connected, may be worthwhile imports to OS.

The fourth and related line of future research opportunities involves seeing MNCs as interesting empirical testing grounds for OS with regard to advancing systemic perspectives of power. With their multi-contextual embeddedness (Meyer, Mudambi & Narula, 2011), MNCs can demonstrate what happens when different patterns and effects of domination and subjugation, which often remain unquestioned and unchallenged when in a single societal setting, meet each other and inter- act with one another. It raises the question of whether and to what extent such cross-contextual encounters make the oftentimes unquestioned patterns of domination and subjugation visible, sub- jecting them to discourses which potentially challenge and change systemic conditions.

Funding

This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.

Notes

1. Altogether we received 39 submissions from OS and IB scholars. We desk rejected about 50% of the submitted papers. The remaining papers were sent out for peer review. We finally decided to include six papers in our Special Issue. These fit quite well with the overall goals outlined in the original Call for Papers. Moreover, they all focus on building bridges between OS and IB researchers who are interested in shedding some new light on political activities within and round internationally operating firms and the social constitution of power relations in the MNC.

2. However, the so-called ‘discursive turn’, which OS has experienced in the last years, has hardly arrived in IB research yet.

Geppert et al. 1221

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Author biographies

Mike Geppert is Professor of Strategic and International Management at Friedrich Schiller University, Jena, and Visiting Professor at the Turku School of Economics. His current research focus is on socio- political issues and sensemaking within multinational companies, and on cross-national comparisons of management, organization and employment. His work is published in journals including the British Journal of Management, European Journal of Industrial Relations, Human Relations, International Journal of Human Resource Management, International Journal of Management Reviews, Journal of International Management, Journal of Management Studies and Organization Studies, reflecting his mul- tidisciplinary research interests. Mike is also one of the guest editors of the upcoming Special Issue on ‘Politicization and political contests in contemporary multinational corporations’ in Human Relations, co-editor of the new volume ‘Multinational corporations and organization theory: Post millennium per- spectives’ of the Research in the Sociology of Organization series and co-editor of the new book Politics, power and conflict in multinational corporations: Foundations, applications and new directions with Cambridge University Press.

Florian Becker-Ritterspach is Professor of Economic and Organizational Sociology at the University of Applied Sciences Berlin (HTW). Next to knowledge transfer, and learning, his research focuses on issues of power, politics and conflict in multinationals. His main theoretical interest centres on combining international management approaches with organizational theory. He has published his work in, amongst others, Journal of International Management, Management International Review, Organization Studies and the British Journal of Management. Florian is organizer and convenor of the Standing Working Group 11 ‘Multinational Corporations: Social Agency and Institutional Change’ at the European Group for Organizational Studies (EGOS). He is also a co-editor of the forthcoming volume Politics, power and conflict in multinational cor- porations: Foundations, applications and new directions with Cambridge University Press.

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Ram Mudambi is the Frank M. Speakman Professor of Strategy at the Fox School of Business, Temple University, USA. He holds a Master’s degree from the London School of Economics and a PhD from Cornell University. He is a Fellow of the Academy of International Business and an Honorary Professor at the University of Leeds. He has been a Visiting Professor at Bocconi University, Copenhagen Business School and the University of Sydney. He has served as an Associate Editor of the Global Strategy Journal (2010– 2013) and an Area Editor at the Journal of International Business Studies (2013–2016). He has been a special issue editor for numerous journals including the Journal of Economic Geography and the Journal of Management Studies and serves on the editorial boards of numerous journals. He has published over 80 peer- reviewed articles, including in the Journal of Political Economy, the Journal of Economic Geography and the Strategic Management Journal.