ABSTRACT
Whatever local conditions are in place when a Western capitalist firm ventures into an emerging country, a local-global dynamic arises at the previously described three levels as a result of a series of interactions fueled by two logics. Western firms are led by their organizational logic to act on the basis of an economic rationality (Dacin et al., 2002). Their managers are guided by identity referents grounded in the cultural environment and emanating from the historical trajectories of the industrial capitalist systems in which the referents developed (Castells, 2000). This particular rationality is based on a dual technical and economic concern (Hofstede and Hofstede, 2005) and a strategic process of harnessing specialized resources (Simon, 1982). The purpose of this process is to achieve a level of efficiency defined by the historical and cultural environments. It is therefore important to consider the resulting unavoidable identity and cultural impacts on this particular logic, which demonstrate clearly the “limited” nature of the rationality attached to it. The second interactive logic is shaped by the strategies and behaviors of decision makers in emerging countries, which are influenced not only by the cultural referents (Adler, 1994, 1997) of a nation’s societies but also by institutional settings and formalized modes of operations from which the strategies take their meaning. This meaning appears to be strongly imprinted by traditional and community legitimacies in which the dominant rationality is based more on social and community relationships than on individual performance and the way individual actions affect the group. The goal of this study is to deconstruct and analyze the local-global dynamic resulting from the interaction of the two logics. This is accomplished from an epistemological perspective, based on the general hypothesis and the three main observations presented earlier. Our perspective takes into account the local and global characteristics of the interactive dynamic, which is constructed and takes on meaning only within historically and culturally predetermined spatial boundaries. The purpose here is not to downplay the scope of the globally influential exogenous elements of the rationality of Western firms and their economic practices, but to observe that such factors do not produce the same effects everywhere (such as inevitable Westernization) because their impacts combine with the endogenous factors that are found at the three levels noted in the hypothesis. The resulting analytical model is based on three theoretical approaches selected for their ability to explain the interactive dynamic of the local and global dimensions of the factors at play in environments as complex as those of emerging countries. The first approach uses institutionalist theory and considers local constraints and the adaptation needs of Western firms. This approach was selected for its potential to explain the two main analytical dimensions on which it is founded. The first dimension is the set of institutional constraints created by the regulative, normative and prescriptive aspects of institutions. These constraints condition the organization’s ability to act upon its own context (Doz and Prahalad, 1993; Ray, 2003) during the interaction, and to “maneuver” its strategies in a flexible way. The second dimension is the ability of organizations to take
advantage of potentials that arise from institutional constraints and which, by their existence, take away much of the constraints’ negative aspects. The strategic ability of organizations can therefore make all the difference and optimize institutional constraints. The framing of institutions as the objects of a constantly evolving dynamic leads to a reexamination of structures and their effect on actors (organizations, groups or individuals). During this exercise, institutions are no longer viewed as exogenous objects that can barely propel the action of actors, but rather as a set of movable structures with no significance or intrinsic value at organizational or societal levels except through the meaning attributed to them by the agents who sustain them. Far from opposing the traditional institutionalist approach adopted by organizational studies, this perspective sheds new light on, and leads to the reframing of, the question of the meaning and scope of action, especially when one is analyzing organizations. The second perspective has a neo-structurationist orientation and is based on the principle of the non-exteriority of structures, thereby excluding the idea that the nature and quality of business relationships are independent from the cultural mediations that underpin institutional/organizational interactions (Giddens, 1990). The third perspective, which draws on cultural theories (Hofstede, 1980; Adler, 1994, 1997; Hampden-Turner and Trompenaars, 2004), is based on conducting systemic comparisons of managerial and societal cultures from a standpoint of instrumental concern for organizational performance – that is, finding ways to build links between the agents that drive culture, in order to minimize negative consequences and optimize each culture’s resources.
