The purpose of this paper is to examine the role of multinational corporations (MNCs) in local institutional change. To what extent do multinational organizations help or hinder change, in particular new industry creation?
The paper presents a qualitative case study examining the role of multinational temporary work agencies in the development of temporary agency market in Spain.
The authors find that while multinational firms were less constrained by the norms, values and logics of the home environment, they also encountered specific challenges in the implementation of new practices. First, high‐profile introduction of a novel practice requires checks and balances to manage unanticipated developments, such as undesirable activities by opportunistic actors that may derail the change process. Second, rapid growth is not conducive to concerted efforts at industry level, leaving the public identity of the institutional innovation extremely vulnerable. Third, high‐profile change is also vulnerable to redefinition of the practice through misinterpretation or misuse by inexperienced users.
The findings highlight the interaction between global and local actors in the development of a novel market and the main findings provide three concrete aspects of the change process that need to be carefully monitored in processes of MNC‐driven institutional change.
MNCs have been argued to be important agents of change in an organizational field as they are less bound by the norms, values and logics of any particular institutional environment. The authors' analysis shows how this disconnectedness of MNCs can also hinder the change effort in three important ways.
