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This study aims to examine the effects of competing influences emanating from firms’ social structural context (i.e. sent and received board of director interlocks and industry peers) on the adoption of an institutionally contested corporate governance code provision.

The corporate governance code provision of interest in this research recommends that German firms listed on German stock exchanges should disclose the individual remuneration arrangements for their board members. This paper uses 945 firm year observations from 2002 to 2006, the time period during which the adoption of this provision was voluntary for firms, to examine the role of firms’ social structural context in the legitimization process of this provision.

The results show that sent board interlocks to firms that defy pressures to adopt this practice have an equally pronounced but opposing effect on its institutionalization process. Received interlocks are inconsequential in this process. The results also provide evidence for the existence of competing influences emanating from firms’ industry peers. In contrast to the effects associated with sent board interlocks, at the industry level, peer acquiescence has a more pronounced effect than peer defiance. Furthermore, the practice’s legitimacy among firms’ peers moderates the effects of sent board interlocks.

The results of this paper suggest that a balanced approach to studying institutional change in corporate governance needs to acknowledge the co-existence of conflicting signals regarding the spread of new institutional models. The findings suggest that firms’ social structural context plays a central role in processes of contested institutional change. Board interlocks and industry peers carry the potential to facilitate institutional change and facilitate institutional continuity and resistance to change. However, not all board interlocks are of equal importance, and industry peers constitute a source of legitimacy to which directors forming the interlocks attend.

The probability of sanctions’ effectiveness increases not only due to their severity for the target country’s economy but is also a function of adherence to their principles by enterprises from senders’ countries. Sanctions avoidance and increasing investments in the target country (the observed behavior of many companies facing the European Union (EU) sanctions against Russia which were imposed in 2014) mitigate the impact of these restrictive measures. In this chapter we show (by analyzing adaptation strategies of EU enterprises affected by sanctions imposed on Russia by EU) how particular types of strategies affect the effectiveness of sanctions and what factors determine the choice of their respective behavior. We draw our conclusions from the online survey of more than 1,000 responses from British, French, German, Italian, and Polish enterprises. We find that while administrative burdens make conformance to sanctions more likely, market dependency and non-tangible assets in the target country induce strategies that challenge sanction policies. We conclude that the EU–Russian sanctions dispute incentivizes European companies to increase their engagement in Russia. These so-called defiance strategies diminish the real economic effect of the sanctions and generate a new equilibrium which outlasts the lifting of these restrictive measures and has negative long-term political implications.

The purpose of this paper is to examine the strategic responses of multinational enterprise (MNE) subsidiaries in China toward a unique institutional characteristic – the structural discrimination against rural migrant workers.

Based on surveys of 181 firms and 669 rural migrant workers, as well as a case study of eight firms in Jiangsu and Shanghai, the authors examined and compared the human resource management (HRM) policies of MNE subsidiaries and domestic Chinese firms toward rural Chinese migrant workers.

This study found that MNE subsidiaries are more likely to accept local discriminatory HRM practices when managing migrant workers. In response to the institutional environments of host countries, MNE subsidiaries tend to share similar behavioral characteristics with local firms and are reluctant to show leadership in initiating institutional change in host countries.

This study is important since it enables investigation of some prevailing assumptions in the literature. Contrary to common wisdom that MNEs are change agents that proactively engage in institutional entrepreneurship in host countries, this study found that MNEs’ responses to the institutional environment of host countries are shaped by their entry modes and the institutional environment in their home countries. MNEs are as diverse as their home countries and far from forming a unified organizational field with similar behavioral characteristics.

In this study, we explored the behaviour of two Canadian multinational companies operating in the context of Arab Spring events in Egypt in 2011.

We conducted a fine-grained analysis of 171 documents of various secondary sources to understand the behaviour of the two firms in Egypt between 25 January 2011 and 30 June 2012.

We suggest that corporate diplomacy should be viewed as portfolios of interdependent actions rather than reactions to discrete events. We also underline the importance for organisations to have a proactive, holistic and inclusive corporate diplomacy strategy, with the objective to secure and balance both explicit political/legal licence and implicit social licence.

We intentionally focused our empirical analysis on two Canadian firms operating in the same host country and belonging to the same industry. It would be useful to carry similar research in different organisational and institutional contexts.

Open Source software companies (OSSCs) are confronted with institutional pressures from Open Source software (OSS) communities. They must find an acceptable balance between the expectations of these communities and their own business model. However, there are still few studies that try to analyse the OSSC business models. The purpose of this paper is to highlight OSSC typical business models by using rich empirical data.

The methodology is based on a combination of quantitative analysis of a sample of 66 OSSCs and qualitative analysis of three typical situations resulting from that sample.

The quantitative study enables the authors to highlight three typical business models. The in-depth study of three typical cases enables the authors to specify these OSSC business models. The authors can distinguish four key dimensions: the relationship developed with the OSS communities, the strategic manoeuvres made, the key resources and competitive positioning.

The results indicate that it is possible for firms to accommodate both profit and non-profit logics using different strategic manoeuvres to position themselves with regard to the Open Source institutional environment. Such accommodation requires the development of key resources and the adoption of suitable competitive positioning.

This study allows the authors to highlight two main practical contributions for OSSCs’ directors. First, the different manoeuvres identified may help them to ensure coherence between their strategic choices and the business model chosen. Second, the results can help OSSC founders identify value creation mechanisms more clearly by analysing four key variables.

This paper provides new insight about OSSCs business models. It aggregates four dimensions that provide a more “fine-grained” analysis of business models, while other studies often emphasise one dimension (usually the regime of appropriability).

This paper aims to investigate how firms disclose the presentation and content of business model (BM) information in corporate reports to manage their legitimacy in response to European Directive 2014/95.

Legitimacy theory is used to identify disclosure strategies pursued by firms in reaction to the new regulation. To understand how firms adopt these strategic responses, semiotic analysis is applied to a sample of European companies’ reports through Crowther’s (2012) framework, which is based on a mechanism of binary oppositions.

Half of the sample strategically choose to comply with the European Union (EU) Directive regarding BM information through the use of non-accounting language, figures, and diagrams. Other firms did not disclose any substantive information but managed the impression of compliance with the regulation, while the remainder of the sample dismissed the regulation altogether.

This study demonstrates how organisations use the disclosure of BM information in their corporate reports to control their legitimacy. The results support the idea that firms can acquire legitimacy by complying with the law or giving the impression of compliance with the regulation. This study provides evidence on the first-time adoption of the EU Directive, and therefore, future research can enlarge the sample and conduct the analysis over a broader time frame.

A more precise indication of the EU Directive regarding “where” firms should report BM information, “how” the description of a BM should refer to the environmental, social, governance (ESG) factors, and a set of performance measures to track the evolution of a company’s BM overtime is needed.

While there has been a notable amount of research that has applied content analysis methodologies to investigate the thematic and syntactic aspects of BM disclosure in corporate reports, only a few studies have investigated BM disclosures in relation to the EU Directive. Furthermore, the application of semiotic analysis extends beyond traditional content analysis methodologies because it considers the structure of the story at many levels, thus developing a more complete textual picture of how BMs are described, allowing an analysis of the reasons behind the disclosure strategies pursued by firms.

The paper aims to examine disputed interpretations of “key meanings” between the audit regulator and Big 4 firms during a highly contentious regulatory debate, showcasing their use of “strategies of resistance” to achieve their intended outcomes.

A qualitative analysis is performed of the discourse in a South African audit regulatory debate, set within the country's unique political and historical context. The analysis is informed by the theoretical construct of a “regulatory space” and an established typology of strategic responses to institutional pressures.

The study’s findings show how resistance to regulatory intentions from influential actors, notably the Big 4 firms, was dispelled. This was achieved by the regulator securing oversight independence, co-opting political support, shortening the debate timeline and unilaterally revising the interpretation of its statutory mandate. The regulator successfully incorporated race equality into its interpretation of how the public interest is advanced (in addition to audit quality). The social legitimacy of the Big 4 was then further undermined. The debate was highly contentious and unproductive and likely contributed to overall societal concerns regarding the legitimacy of, and the value ascribed to, the audit function.

A deeper appreciation of vested interests and differing interpretations of key concepts and regulatory logic could help to promote a less combative regulatory environment, in the interest of enhanced audit quality and the sustainability and legitimacy of the audit profession.

The context provides an example, contrary to that observed in many jurisdictions, where the Big 4 fail to actively resist or even dilute significant regulatory reform. Furthermore, the findings indicate that traditional conceptions of what it means to serve “the public interest” may be evolving in favour of a more liberal social democratic interpretation.

The purpose of this paper is to contribute to an understanding of how auditing standard setting is adapted to changing patterns of resistance at various stages of its development.

The research is conducted as a longitudinal single case study of the auditing standard‐setting activities of the Danish professional body 1970‐1978. The case is based on extensive interviews with members of the standard‐setting board at that time, supplemented with documentary studies.

The paper identifies and discusses five general measures to deal with the immanent resistance to auditing standard setting: alignment of interests, representation, due process, soft texts, and reference to ideology. It concludes by analyzing how these strategies are adapted to changing patterns of standard‐setting resistance at various stages.

The paper discusses auditing standard setting only. Although resistance to accounting standard setting may be dealt with in the same way, the patterns of resistance are most likely different and the adaptation strategies may therefore also be different.

Presenting insight into the processes of auditing standard setting, the paper is of interest to anyone involved in the process, either as developers or as users.

The paper supplements previous studies of standard setting by applying the Actor‐Network Theory approach to auditing standard setting, thereby outlining a new general framework for the study of standard setting.

Discussions about conflict at work generally tend to revolve around examples of overt industrial action, taken against an employer by a group of well‐organised employees. As the service sector becomes increasingly prominent within the UK, this model is no longer adequate – if it ever was – since much action is covert and individualistic in nature. Moreover, managers themselves may also engage in activities designed to defy or subvert central policy initiatives. This monograph is concerned with an analysis of such activities in a night‐club environment, and is based on six years research during which one of the authors worked as an employee for a large service sector organisation. It illustrates graphically the way in which employees resisted management instructions, or sought to “get even” with individuals who had alienated them. The implications which this research suggests for improving systems of management in an environment such as this are assessed.

The purpose of this paper is to examine the role of management control systems (MCS) in strategically responding to institutional pressures for sustainability (IPS). Drawing on institutional theory (DiMaggio and Powell, 1983) and strategic responses to institutional pressures framework (Oliver, 1991), the study argues that organisations strategically respond to IPS using MCS.

Data were collected by interviewing sustainability managers of a large-scale multinational apparel manufacturing organisation with its headquarters in Sri Lanka.

The study finds that organisations actively respond to IPS using acquiescence, compromise, avoidance, defiance, and manipulation strategies. The results not only reveal that formal MCS play a critical role in complying with IPS, but also in more active responses, including compromise, avoidance, defiance, and manipulation. The findings highlight that organisations use MCS as a medium to respond strategically to IPS, and in turn, the use of MCS has important implications for organisational change and improvement.

The study has implications for Western organisations, finding that suppliers committed to sustainability in Asia strategically respond to IPS as a means of strengthening outsourcing contracts, instead of blindly accepting. Findings indicate that organisational changes and success seem to be a function of strategically responding to IPS rather than operating an organisation by neglecting sustainability challenges. The organisational ability to use MCS in strategically responding to IPS has the potential for long-term value creation.

This study provides novel insights into the MCS, strategy and sustainability literatures by exploring different uses of MCS tools in strategically responding to IPS. More specifically, it shows how the use of MCS tools varies in supporting strategic responses, and with respective IPS. In doing so, it enhances our understanding of the importance of the use of MCS in dynamics of institutional change and practical variances in strategically responding to IPS.