institutions and transnationalization jae hwan lee april 6, 2010

Institutions and Transnationalization

Jae Hwan LeeApril 6, 2010

Key Points

• Overcome opposition between institutions (stability) and globalization (breakdown)

• Argue that institutions and globalization are intertwined

Key Points

• Institutions are– Those collective frames and systems that provide stability

and meaning to social behavior and social interaction and take on a rule-like status in social thought and action (Meyer and Rowan, 1977; Douglas, 1986: 46-48)

– Institutions have both structural and ideational dimensions• Transnationalization is

– To describe a world where economic and social organization and coordination increasingly each across national borders

– A better term than globalization and internationalization

Organizational Institutionalism

• Agnostic stance on transnationalization• Organizational institutionalism– Habitualization/Objectification/Institutionalization– De-institutionalization (political/functional/social)– Both used in analysis of institutional dynamics– Both allow for contestation between various interested

actors in the first two phases of the institutional process and acknowledge the co-existence of different degrees of institutionalization

Organizational Institutionalism

• Expected Contributions– Analysis of institutional phenomena in the transnational

sphere where struggles between different parties and a fair degree of institutions in the making are to be expected

– Offers the tools to study cross-border diffusion of practices, templates and rules as sources of institutionalization and de-institutionalization

– Allow the integration of a transnational dimension into institutional analysis

Societal Institutionalism

• Refers to what is now a dense set of conceptual and empirical studies focusing on the historical emergence and contemporary structuring of national economies

• Focus on the systematic nature of national configurations of national institutions

Societal Institutionalism

• Adaptation of societal institutionalism in transnationalization context– Call into question the conception of institutions as

fully determining economic organization and action– Explore what happens when actors or organizations

become involved in multiple institutional environments with different and conflicting rule systems

– Look at transnational arena as institutionalized or institutionalizing space

World System Institutionalism

• Refers to a now well-established tradition of cultural institutionalism

• World society is a society of empowered actors; a society permeated by and permeating actors with powerful cultural values or institutional frames


– Cultural and institutional web characteristics can function as if centralized, state-like global power (Meyer et al., 1997)

– Add the speed of diffusion and global pervasiveness of standardized model and blueprints

– Bring cultural perspectives into analysis of states, organizations and their transformation

– Actorhood is the soft kind and empowered by cultural frames

– Real power and authority sources are cultural and diffuse, rather than structured and centralized

– States are embedded in, shaped, and fashioned by a powerful world society an its associated institutional and cultural templates


• More focus is needed on;– Construction and negotiation of global cultural models

or institutions– Understanding of actual processes and mechanisms of

diffusion and local reception, where transnational institutional blueprints meet with local institutional traditions

– Empirical and conceptual work on carriers• Located at the interface of multiple sources of embeddedness• Cross and overcome the national/transnational border• Contribute to back and forth translation and negotiation

International Relations

• Progressive Retreat of the State (Strange, 1996)– In the process of regulatory reforms and privatization and

public service dismantling, states have not withered away– Regulatory states (Majone, 1996) are as much powerful as

more interventionist states and are embedded in complex constellations of actors and structures

– States’ input and identity are difficult to disentangle and separate from those of other actors


• Non-monolithic States– State institutions are complex patchworks– Porosity of state institutions has increased significantly– Boundaries are tighter between sectors of state than

between state agencies and other actors in the same sector


• Various Forms of Private Authority– Multiplicity of rule-making and institution-building

activities that emerge and are structured outside states

• Transnational Social Networks– Transnational class formation (Van der Pijl, 1984, 1988)– Mechanism of governance over state boundaries (Haas,

1989, 2002)• Epistemic community makes reference to communities of

expertise and practice that are increasingly transnational while individuals in those communities retain some form of local or national influence and authority


• Regulatory Networks– A wide variety of public and private actors involved in rule

making, institution building and monitoring– Complex interconnections between a multiplicity of

individual and organizational actors– Organizational, cognitive, and normative frames – Questions arise as to regulatory networks’ legitimacy and

legitimacy of private authority

Trans-nationalization as Institutional Recombination

• Origins of transnational institutions– Bricolage [construction (as of a sculpture or structure of

ideas) achieved by using whatever comes to hand], rather than ex-nihilo generation• Actors build upon, recombined, reinvent, reinterpret logics and

institutional arrangements

– Befits the processes of institutional emergence and institutional building at the transnational level

– Institutional building in the transnational level involves• Multiple actors or groups of actors with mental and action maps

originating from quite different institutional contexts


• Historical Scenarios: Transnational Organizations or Regional Federations– Transnational Organization

• Roman Catholic Church, League of Nations, United Nations, OECD• ILO, IMF, GATT (WTO)• Central core, in charge of setting the rules and building institutions

at the transnational level• Central core, directly reflecting the interests of member states• Tools of particular nation states and governments• Mirroring the existing geopolitical balance of power• However, technocratic elite may have its own identity


• Historical Scenarios: Transnational Organizations or Regional Federations– Regional Federation

• Followed temptation to create a supranational market or nation• Empires, ECSC, EEC, or EU, and possibly NAFTA• The process of rule setting and institution building stems from a

political initiative• Public or semi-public actors, governments or representatives are

instrumental in that process• The scope and reach of those centrally engineered constructions go

beyond those of transnational organizations• New rules and institutions are enforceable due to enforceable

mechanisms that put member states under compliance


• Historical Scenarios: Transnational Organizations or Regional Federations– Enforcements in Regional Federations

• Direct controls: associated with rewards (+) and sanctions (-)• Voluntary compliance: member states aware of benefits from

supranational construction and consequences of not respecting the terms of contract


• Self-regulating communities: Scenario of the future?– All actors come together, in non-structured and unformalized

settings, agree on collective rules (Cutler et al., 1999; Morgan and Engwall, 1999)

– Public, semi-public, and private actors involved in rule setting, institution building, and monitoring compliance

– Self-discipline or self-regulation– NGOs and private actors, instead of waiting for public actors to

impose institutional frames, set their own rules– Voluntary process, informal negotiation– Emerging structural arrangements are amorphous, fluid and

multifocal


• Self-regulating communities: Scenario of the future?– Enforcement mechanisms

• Voluntary compliance: because all actors define the rules and inflict upon themselves the institutional constraints that will bound their actions and interactions

• Socialization: may emerge at a later stage

– Antecedents of self-regulating communities• Structuring of commercial arbitration at the transnational level:

international cartels • NGOs engage in standard settings, accreditation and soft

regulation• MNCs become rule-setters and rule-developers: ICN (International

Competition Network)


• Transnational recombination: Mode and Nature of Process– Mode

• Dominant : reflect one dominant local or national model (US)• Negotiated: confrontation or rubbing against each other of

multiple locals or nationals, leading to negotiation• Emergent: multiple actors with no clear identities and functioning

themselves at the interface of multiple rule systems, come in collision with each other

Trans-nationalization and Impact on Institutions

• Trickle-down Trajectories– Transnational organizations or supranational constructions

as rule-making bodies and influencers on national polities• EU, IMF, EBRD, WTO

– Challenger rules emerge from transnational space lacking formal structure• Self-disciplining transnational communities : rule making and rule

setting make take place at transnational fields or arenas lacking structuration

• All kinds of actors negotiate and agree upon rules of the game


• Trickle-down Trajectories– Three groups

• One unit sample: US• A few core and rather rich countries: compliance-driver• Larger group and weak countries: susceptible to trickle-down

– Direct political dependence of national countries on a supranational construction : EU• Rules created at supranational level are likely to have

rapid and direct impact on national level


• Trickle-up Trajectories– National actors crossing national borders find rules of

game contradictory or in collision • Individuals, groups, firms, associations, networks• Widespread due to Internationalization of economic activities

– Foreign actors moving into national space with rules different from local rules• Locals or nationals pushing for new rules of the game• New or emerging actors redefine


• Trickle-up Trajectories– Subsocietal level rules may change before national-level

institutionalization– Transformation at subsocietal level reverberate at the national

institutional level: ex) Germany’s Kodex-Kommission– Strategic firms or industries in smaller countries

• Nokia in Finland• Forest industry in Norway and Finland

– Strength and legitimacy of those outsiders championing and pushing for challenger rules• Anglo-Saxon players : trademark advantage in finance and consulting

– Collision and national-level reverberation • Subsocietal actors lack protective buffers or in crisis, collision intensify

– Collision and national-level reverberation

Conclusion

• Institutionalization, deinstitutionalization, reinstitutionalization

• Institutional systems as open systems• Social actors are embedded in locally and temporally

specific institutional rules of the game as well as beyond local institutional settings

• Institutional logics competing at organizational, societal, transnational

Conclusion

• Research Methodologies and Empirical Work– Nested hierarchy of institutional context– Reorient to analyze interaction between national and

transnational institutions– Employ tools to analyze global and transnational forms or

organization, including MNCs, financial and knowledge immediaries, loosely connected communities, networks and their involvement in institution building and institutional change

Conclusion

• Why do organizations exist?• Why are firms the same/different?• What causes changes in organizations?• Why do some firms survive and others don’t?• What are the emerging issues?

institutions and transnationalization jae hwan lee april 6, 2010

Documents

institutions stability

institutional process

conception of institutions

powerful world society

cultural perspectives

fair degree of institutions

society of empowered

powerful cultural values