Insightful scripting may require a pursuit of knowledge that is nuanced with local and historical idiosyncracies (Kieser, Reference Kieser1994). Corporations around the globe exhibiting similarity may indeed bestow legitimacy; yet such global standards may bear multiple cultural interpretations (e.g., Adler, Doktor, & Redding, Reference Adler, Doktor and Redding1986). And while emerging economies undergo seemingly similar phases in their economic transition from rural to advanced, their local uniqueness can fuel the metanational innovation global corporations seek (Doz, Santos, & Williamson, Reference Doz, Santos and Williamson2001). Seeing the world differently will also support the search for strategic novelty (Välikangas & Gibbert, Reference Välikangas and Gibbert2015) and ultimately make economies more resilient through their explorative variation.
INTRODUCTION
We respond to Sean Pope and John Meyer (Reference Pope and Meyer2015) on the ubiquity of the global corporate organization and question the relevance of the world-society perspective to explain some important, modern-day phenomena. John Meyer and his associates’ pioneering research on world societies (the ‘Stanford School’ of sociological institutions), has yielded extraordinary insights into the global cultural scripts that rationalize corporate and national behaviors (see Buhari-Gulmez, Reference Buhari-Gulmez2010; Meyer & Rowan, Reference Meyer and Rowan1977); yet, we argue for the persistence and strategic significance of localization, politics, and agency (or purposive choice) that should affect understandings of globalization. People have sought useful generalizations such as globalization or world society throughout history. For instance, Aristotle's generalizations on physical phenomena (Corpus Aristotelicum, 3rd C. BCE) guided thinking for two millennia, despite contradictory evidence. Similarly, Adam Smith's rationales (The Wealth of Nations, 1776) for the efficiency and fairness of decentralized, competitive economies, and David Ricardo's work (On the Principles of Political Economy and Taxation, 1817) on the comparative advantage of nations and against protectionism, mold research and practice on trade policy today. Unfortunately, generalizations have also muddied useful, actionable insights through excluding relevant data and imposing too much simplicity on functions used for inference: for example, contingency theorists searched for generalizations that would apply to organizations of all kinds; yet, after many years and numerous publications, their collective research yielded no conclusive results (Starbuck, Reference Starbuck2009).
Indeed, the relative value of globalization as an explanatory term has declined from 2004–2015. Rosenberg argued (2005: 3–4) ‘“Globalization” today is yesterday's Zeitgeist. . .In retrospect it will perhaps increasingly be seen as a conjectural phenomenon of the 1990s – reflecting, but not explaining, the experience of those years’. The 2008 financial crisis and subsequent global recession demonstrated the fragility of globalization as trade flows shrank dramatically. Despite the ‘explosion of international corporations’ (Pope & Meyer, Reference Pope and Meyer2015: 174), in 2014, overall levels of global connectedness had not resumed their all-time peaks of 2007 (Fox, Reference Fox2014): Overwhelmingly, commerce, investment, and interactions such as internet traffic and phone calls still occur within, not between, nations (Ghemawat & Altman, Reference Ghemawat and Altman2014). Regional blocs such as the Association of Southeast Asian Nations (ASEAN) and the European Union (EU) also drive commerce (Ghemawat, Reference Ghemawat2007). Search trends indicate a decline in mindshare or awareness of ‘globalization’ on the Google search engine from among all search terms on Google. Figure 1 provides a normalized indicator of search interest in the term ‘globalization’ from 2004–2015 showing a fall from a high of 100 in 2004 to 10 in 2015.
Normalized searches of the term ‘globalization’ on Google, 2004–2015
Pope and Meyer (Reference Pope and Meyer2015) contended that a global corporate organization has arisen without national distinctiveness and local rooting: managers graduate from homogenous business programs, attend the same international high-profile meetings, and hire the same consultants (Välikangas, Reference Välikangas2015). Increasingly, therefore, global standardization corresponds to abstract universal principles, rather than national history or circumstance. Pope and Meyer (Reference Pope and Meyer2015) alluded to global practices including the global growth of US-style MBA programs and academic publishing; the rise of global Corporate Social Responsibility (CSR); and, multinational enterprises’ (MNEs’) expanding global marketing operations while deploying similar rituals and symbols. We propose that these overt similarities hide crucial differences that we ignore at our own peril.
First, we examine what a theory of global rationalizations explains and does not. Next, we analyze global practices including the global selling and producing of research, global CSR, and, global marketing. Finally, we critique some of the Stanford School's assumptions and offer recommendations for future research and competitive practice.
CONTRIBUTIONS AND COSTS OF GLOBAL RATIONALIZATIONS
The Stanford School has explained the paradox of isomorphism (similarity of structure and form) among social organizations despite diverse local needs, perceptions, and resources (Buhari-Gulmez, Reference Buhari-Gulmez2010). Researchers argued that agency and parochial perceptions appear to have no influence on global isomorphism (Meyer, Boli, & Thomas, Reference Meyer, Boli, Thomas, Thomas, Meyer, Ramirez and Boli1989). Instead, global social behaviors, such as those Pope and Meyer (Reference Pope and Meyer2015) outlined, reflect external cultural scripts rather than cost-benefit calculations (Meyer, Reference Meyer, Greenwood, Oliver, Suddaby and Sahlin-Anderson2007) indicating that a world society's cultural authority precedes and sets the stage for decision-making (Meyer, Boli, Thomas, & Ramirez, Reference Meyer, Boli, Thomas and Ramirez1997).
Researchers from the Stanford School have demonstrated that states’ rationalized activities have acquired self-directed momentum, transcending local economics and politics. World society encompasses structural similarities of form without equal outcomes (Meyer & Hannan, Reference Meyer and Hannan1979). Purpose decouples from structure, intentions from results. Conformity emanates from a world culture of rationalized modernity propelled by domestic groups that follow a consensus over formal acceptance of matters such as human rights, socioeconomic development, and education (Meyer et al., Reference Meyer, Boli, Thomas and Ramirez1997).
The spread of global culture involves theorizing (Meyer, Reference Meyer, Greenwood, Oliver, Suddaby and Sahlin-Anderson2007), formulating new concepts and new causal relationships informed from strangers’ experiences. Space-time realignments accompany globalization, influencing individuals' and collectives' identities and cultural frames of reference (Albert, Reference Albert2007). Various channels facilitate global cultural flows including professionals attending similar business schools and World Economic Forum (WEF) meetings at Davos.
The Stanford School has justified its conclusions with empirical results at an aggregate level of analysis. However, much contradictory empirical research has also shown that globalization produces divergence and diversity that may bolster national policies and institutions, including increasingly complex interactions between MNEs and states (Stopford & Strange, Reference Stopfod and Strange1991); differentiated national systems of innovation, trade and investment (Doremus, Keller, Pauly, & Reich, Reference Doremus, Keller, Pauly and Reich1998); and, enduring national differences in economic policy and global engagement (Garrett, Reference Garrett1998). Researchers studying the varieties of capitalism have argued that MNEs and countries pursue different paths of integration into the global economy: MNEs from different countries rarely compete directly in the same global industries and market segments (Gerlach, Reference Gerlach1992; Storper & Salais, Reference Storper and Salais1997). Despite increasing globalization, home countries’ institutions and societies mold MNEs’ divergent economic activities and differing organizational forms (Guillen, Reference Guillén2001).
In the Chinese industries we studied – solar, steel, glass, paper, food and auto parts – labor was between 2% and 7% of production costs, and imported raw materials and energy accounted for most costs. Chinese production mostly came from small companies that possessed no scale economies or technological edge. The products in these strategically important industries for China (and often, for the rest of the world) routinely sold for 25% to 30% less than those from the United States or EU. We found that Chinese companies could expand in this fashion only because of subsidies they received from China's central and provincial governments; the subsidies stemmed from historical, and institutional systems of patronage that spanned thousands of years, reflecting local governments’ nurturing of local elites, and competition with Beijing, rather than efficiencies or comparative advantage (see Haley, Haley, & Tan, Reference Haley, Haley and Tan2004). Every province wanted an auto industry and a steel industry, for example, as local officials viewed these industries as cementing their power bases through increasing employment. Subsidies in strategically important Chinese manufacturing industries appeared in dollar terms to exceed over 30% of industrial output. The subsidies took the form of free or low-cost loans; artificially cheap raw materials, components, energy, and land; and, support for R&D and technology acquisitions. (Haley & Haley, Reference Haley2013; Haley, Reference Haley2013).
Contradicting global narratives, the Chinese state has willingly paid the price of economic inefficiencies to accomplish political, social, economic, and diplomatic goals. Huge Chinese manufacturing subsidies have led to massive excess global capacity, increased exports, depressed worldwide prices, and hollowed out other countries’ industrial bases. Aggregate-level analysis provided few actionable insights (Haley & Haley, Reference Haley2013): Accounting data in China are particularly opaque and provide scant information on interrelationships between business and government. Despite Beijing's avowed goal of adopting international accounting standards, certain activities, such as ‘related-party transactions’, remain inconsistent with international standards, so officials and managers fudge. Under international accounting norms, managers should clearly disclose deals between companies with overlapping ownership. But, because overlapping ownership permeates China, detailing individual transactions would overwhelm financial reports. Consequently, ‘pure state-controlled enterprises’ have no disclosure requirements. We found that many of the companies’ annual reports did not reveal standard accounting data such as ‘Bad Debts’ and did not define terms such as ‘Payables to The Government’. US policymakers, managers, and researchers have often shoehorned Chinese unclear governance practices, and incomplete, even misleading, information from China, into global cultural scripts with adverse impacts on global stock markets, company evaluations, pricing mechanisms and global producers’ competitive positions (Haley, Reference Haley2013). These policy makers’ and managers’ ignoring of China's unique political and cultural contexts had global repercussions.
CRYSTALIZING THE GLOBAL SOCIAL ETHER
Emphasizing mimetic and cognitive processes, the Stanford School conceives of an agglomeration of global activities as ‘global social ether’ (Drori & Krucken, Reference Drori and Krucken2009:19). In this section, we concentrate on three practices identified by Pope and Meyer (Reference Pope and Meyer2015): global knowledge production and dissemination, CSR, and global marketing.
Global Knowledge Production and Dissemination
Pope and Meyer (Reference Pope and Meyer2015) referred to universalism in production of knowledge and a global hierarchy of prestige for academic journals. They argued that the rise of US-style business schools aids in prioritizing these universal principles through emphasizing English as lingua franca, and striving for global rankings based on global criteria.
We agree that since 2004, universities have changed enormously. Business schools now compete to supply international markets with qualifications, turning universities’ administrators into efficient managers of resources, students into customers, and professors into employees (Macdonald & Kam, Reference Macdonald and Kam2009). Universities’ senior administrators routinely begin speeches with observations of living in a globalized world, issue policy to load higher education with undefined global content, and encourage converting students into global citizens. Politicians and op-ed columnists (e.g., Friedman, Reference Friedman2006) mouth similar lines which through their ubiquity have become clichés. As The Economist (2015a) noted, ‘no word has been buzzier in the recent past than “internationalisation” and its synonyms. . .Networks, business practices, students, research, learning and campuses are all “global” – a 21st century shibboleth for business education’. But, this ubiquity has led to ordinariness, depletion of meaning, and loss of competitive advantage. Although some branded institutions may rise above the fray, through appearing to offer similar perspectives and little differentiation of services, many business schools can only compete on price, leading to a need to reverse the selling of globalization.
A US business-school practice, performance indicators of academic research, has assumed great importance in this competitive environment (Macdonald & Kam, Reference Macdonald and Kam2009). As Figure 2 shows, data from Google Scholar on ‘globalization’ suggests that despite a dip, academic research on globalization has continued. Publishing in accepted top journals builds careers and funds universities (Tsui, Reference Tsui2015). Following the US example, selection and promotion committees around the world now calculate academic performance in terms of published performance indicators. Pope and Meyer (Reference Pope and Meyer2015) argued that growing uniformity in business education and research points to an increasingly globalized world; yet, little evidence indicates that this academic research molds practice or even reaches managers and policy makers to incorporate into their rationalizations (Haley, Reference Haley2014).
Number of academic publications on globalization, 2004–2015
Global Corporate Social Responsibility
Pope and Meyer (Reference Pope and Meyer2015) posited that the dramatic rise in the CSR movement has been championed by the United Nations, multilateral organizations, managers who meet regularly at international conventions such as the WEF meetings, and regulatory mechanisms such as the Fair Trade Standards for commodities. They concluded that international organizations’ embracing of CSR has surpassed narrow calculations of economic interests.
Our research indicates a more complex story that includes diverse stakeholders’ interests, cultural factors and institutional constraints. CSR (broadly defined as contributions in cash and kind to society) may indeed correspond to managerial goals rather than corporate (Haley, Reference Haley1991). However, especially in emerging markets, these practices have roots in local traditions and regulations. As Haley et al. (Reference Haley, Haley and Tan2004) elaborated, managers of excellent Chinese companies have long viewed their responsibilities to societies as part of their legacies and as contributing to their companies’ brand names and survival. Indeed, these managers did not justify or rationalize the practices as having global appeal; rather, the managers saw CSR as stemming from China's unique historical, legal and cultural foundations spanning centuries (Haley et al., Reference Haley, Haley and Tan2004). Hong Kong tycoon Li Ka-shing epitomized for us the Chinese ideal of CSR that focuses on family and home communities. Originally from Shantou, China, with a teacher as father, Li had hoped to study medicine, but could not due to civil wars and invasions. Yet, after building his fortune and companies, Li contributed to build education in his home community, reflecting the Chinese practice of legacy building. For example, he founded Shantou University in 1981, and since then has contributed 70% of its annual budget (Haley, Haley, & Tan, Reference Haley, Haley and Tan2009).
CSR has aided in strategically deflecting external, especially US stakeholders’ pressures; and, MNEs’ managers have included CSR measures in communications to US stakeholders and to increase global profits. For example, many US-based MNEs operating in apartheid-practicing South Africa publicly embraced the Sullivan Principles and regularly communicated their adherence and rankings to US stakeholders. Despite no evidence that they substantively integrated diverse races in day-to-day operations, the MNEs’ adherence to the Principles correlated strongly with their global profits and their ability to resist US sanctions as well as US stakeholders’ pressures (Haley, Reference Haley2001). No local South African company adhered to the Sullivan Principles.
Local companies may avoid adopting global CSR practices that increase governmental scrutiny. For example, in 2014, despite GDP per capita of one-seventh the United States, the Chinese gave only $16 billion or one-hundredth of what Americans donated per person (The Economist, 2015b). Chinese individual and organizational giving practices stemmed from a history of attitudes formed during Chairman Mao's regime, when the Communist Party of China (CPC) presented itself as the source of all relief for the poor; the CPC labelled anyone who suggested otherwise as counterrevolutionary.
In the present day, regulations have hindered the development of corporate CSR and charitable giving in China. To function as not-for profit organizations, charities must have government partners, which entails loss of autonomy. Chinese companies also have difficulty obtaining tax breaks for CSR. The CPC has discouraged charities and international CSR practices, as they may highlight systemic failings and indicate that private organizations run more efficiently than state-owned corporations. Companies and managers worry that large amounts to charitable causes that the CPC does not support may draw unwanted attention to their wealth and encourage additional tax payments. Consequently, the Huron Report calculated that in 2014, China's top 100 philanthropists gave $3.2 billion to charitable causes, less than the top three philanthropists in the United States (The Economist, 2015b). Local companies’ records of mismanaged funds have also hindered the adoption of global CSR practices in China. Therefore, the China Philanthropy Research Institute estimated that 80% of private Chinese charitable donations go to overseas charities.
Global Marketing
Pope and Meyer (Reference Pope and Meyer2015: 174) read the influence of modern-day globalization into the ‘international ubiquity of highly similar’ organizational logos, slogans, and other marketing methods; they noted that the world's 300 largest marketers operated on average in 30 countries with more than 30 marketers operating in 50 countries or more. The widespread marketing that Pope and Meyer (Reference Pope and Meyer2015) identified often reflects existing, local rather than newly introduced global practices. World-society theorists have maintained that the 16th century and the expansion of European capitalism mark the start of globalization (Guillen, Reference Guillén2001). Yet, the history of marketing thought precedes the present concept of globalization (Shaw, Reference Shaw2009): Plato's (4th C. BCE) Book IV of the Republic, discussed the role of marketing in society; Aristotle's (4th C BCE) Book I of The Politics analyzed ‘the art of money-making’; St Augustine's (4th C.) Psalm: ‘The Merchant is Worthy of his Hire’, explained the economic value of middlemen in time and space; and, St Thomas’ (1250) Summa Theologica LXXVII: ‘On Fraud Committed in Buying and Selling’, discussed ethical issues in marketing.
The overt similarity of global marketing slogans around the world may detract from deeper understandings of local sensemaking and dissemination stemming from local history, culture and institutional constraints. For example, the Japanese closely associate Christmas dinner with Kentucky Fried Chicken (KFC) and shortcake (Warnock, Reference Warnock2015); despite overt similarities with Western traditions, Christmas dinner in Japan reflects Japanese culture more than KFC's global marketing. Christmas Day does not constitute an official holiday in Japan, a primarily Buddhist and Shinto country. Yet, corporate marketing efforts around consuming fried chicken and shortcake indelibly mark this informal, Japanese holiday. Few Japanese seem to know that other countries favor different Christmas cuisines. According to KFC's managers, Japan's Kentucky (KFC's brand in Japan) tradition dates to the early 1970s, when a Western customer came into a Tokyo KFC outlet to buy fried chicken as a turkey substitute. Struggling to attract Japanese consumers to a foreign cuisine, KFC saw the marketing opportunity for a new Christmas tradition. Christmas has since become KFC's busiest and most profitable time of the year, with families reserving their ‘finger lickin’ good’ buckets from October. Shortcake with strawberries has become another Japanese Christmas tradition through local marketing efforts. In 1910, Fujiya Food Service Co. sold its first buttercream Christmas cakes and demand grew significantly till 1950. Strawberry shortcakes gained popularity from the mid-1960s, a Fujiya spokesman said, when more families had refrigerators and greenhouse-raised strawberries gained popularity. By the 1970s, strawberry shortcakes outsold buttercream cakes. ‘Japan has had a tradition of eating sweet things when celebrating something from ancient times’, Fujiya's spokesman said, ‘which has probably provided a foundation’ for Christmas cakes’ popularity (qtd in Warnock, Reference Warnock2015). A local company with 11,000 stores, FamilyMart Co., echoed KFC's advertising, but offered their fried chicken at lower prices. The local chain, with more than 11,000 stores in Japan, said in its advertising: ‘If there isn't fried chicken, it isn't Christmas’.
CONCLUSION
While highlighting important and often overlooked mimetic and cognitive issues in globalization, Pope and Meyer (Reference Pope and Meyer2015) also indicated the limits of their approach. By extrapolating on the global spread of practices such as professional qualifications, marketing, and CSR, Pope and Meyer (Reference Pope and Meyer2015) assumed the existence of a preglobalization era without significant transnational ties, while simultaneously ignoring a temporal reference point for these global concepts. They also did not demarcate the spatial boundaries of the new global reality as a social system, society, or collections of social orders such as professions. Their arguments implicitly presented a top-down understanding of global diffusion, starting from a world culture that constructs agency. In their view, local contexts filter, mediate and constrain global standards and scripts; consequently, external institutional and cultural pressures can only reinforce or challenge national models rather than diffuse a transformative global culture (Buhari-Gulmez, Reference Buhari-Gulmez2010). We have proposed that local understandings of space and time affect not just rationalizations we attribute to globalization, but also shape globalization (Haley & Boje, Reference Haley and Boje2014). Decoupling implies that policies do not reflect world society. However, the abundance of decoupling has led some researchers (Strang, Reference Strang, Knottnerus and Prendergast1994) to relegate the explanatory power of world society to being rhetorical and negligible.
When researchers measure a world society's structure solely in terms of the number of international organizations and MNEs, they overlook qualitative differences among organizations. For instance, the United Nations, the EU, the WEF annual meeting, and General Electric differ substantially in their powers to communicate and to maintain global standards.
By emphasizing Western practices, researchers additionally assume that global cultural standards, models, and norms derive from Western and mostly US culture, not explaining non-Western and developing economies’ and their MNEs’ cultural and institutional influences on world societies; outward FDI flows indicate that avenues proliferate for these reverse flows of influence. US outward FDI expanded from $31 billion in 1990 to $337 billion in 2014, for a compound annual growth rate (CAGR) of 10.1%; yet, during that same period, developing economies’ outward FDI ballooned from $13 billion to $468 billion for a CAGR of 15.37% (UNCTAD). The CAGRs for transitional economies’ outward FDI assumed an even higher rate from 1990 to 2014 of 17.43% (UNCTAD). From 236% greater than the developing economies’ outward FDI in 1990, US outward FDI shrank to 28% smaller than the developing economies’ in 2014, possibly reducing the United States’ cultural influence on world society.
In our increasingly multicultural world, we argue that no single modernity exists based on rationalism, universal individualism, and science. For instance, present-day Chinese administration owes much more to imperial administrative structures’ influence than to modern business laws; indeed, managerial justifications of these systems drew more on historical, Confucian systems and local institutions than MNEs’ practices (see Haley et al., Reference Haley, Haley and Tan2004). In that vein, drawing on multiple modernities could make more useful the Stanford School's account of changes in world society.
The logic of the global narrative may discount innovation or divergent visions worldwide. As Brannen and Doz (Reference Brannen and Doz2010) concluded, through slogans such as ‘Think Global, Act Local’, managers and academics justify and promote minimal adaptation to local differences and minimal contextual appreciation. Yet, globalization encompasses pluralistic, polyphonic, local–global environments that include multiple points of view that emerge in global narratives. Stakeholders use multiple, conflicting space-time frames to rationalize and to make sense of their experiences in relation to others in the world (Boje, Haley, & Saylors, Reference Boje, Haley and Saylors2016). At any point of time, alternative and competing narratives to globalization exist, sometimes in dialogical relationships, explaining and propelling global strategic change (Czarniawska, Reference Czarniawska2004).
In conclusion, a world society's existence matters, but that narrative has not obliterated the importance of local relations, local interests, local emotional attachments, local politics and regionalism. We live in a complicated world in which multiple, contradictory scripts and processes abound. Through emphasizing a world society's overriding importance, we risk shrinking complexity to singularity, thereby creating leaden and simplistic orthodoxies. We have shown that the seeming isomorphism of corporate operations and managerial behaviors across the world hides significant differences that we cannot integrate through notions of decoupling. When academic programs adroitly rebottle themselves as global, or business schools’ deans and universities’ presidents piously note that we live in a globalized world, they emphasize similarities that obfuscate understandings and minimize differences that provide competitive advantage; thereby, they hurt the pursuit of useful knowledge. Research on common global rationalizations decoupled from realities may divert awareness of evolution and historical developments, of regions’ and nation states’ unique systemic properties, of substitutable processes, of the equifinality of outcomes, and of the influence of short-term deviations from long-term tendencies. Thereby, a preponderance of such studies risks highlighting platitudes and clichés, and obscures opportunities for researchers, managers and policy makers to observe more meaningful and strategically important relationships.
