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The legal devices crafted within large organizations are a key component of legal endogeneity theory (LET). While symbolically complying with legislation, legal devices allow organizations to infuse managerial logics into the legal field, which eventually diverts law from its initial political goals. Although the LET has considered legal devices such as anti-discrimination guidelines and grievance procedures, this chapter argues that contracts also constitute a locus of symbolic compliance and contribute to the eventual endogenization of regulation. Supplementing LET with a focus on legal intermediation, this chapter explores how contracts are crafted and used by large organizations to respond to regulatory pressure. While other legal instruments are unambiguously managerialized from the outset, contracts are highly versatile legal objects that perform the seemingly opposite functions of symbolically complying with regulation and serving substantive commercial purposes. This discussion of the role of contracts as compliance mechanisms is based on an in-depth empirical study of the French retail industry and its response to a set of regulations that aimed at making their business practices fairer.

Whistleblowers are individuals who detect and report misconduct in an organization. They help to mitigate organizational misbehavior and resulting damages effectively and relatively quickly. Whistleblower protection has not been systematically required in the European Union (EU), leaving many large organizations unregulated. This study aims to get in-depth insights into how unregulated organizations design, handle and view whistleblowing with the advent of a novel EU Whistleblowing Directive.

The authors conducted 17 semistructured interviews with a diverse group of organizations headquartered in Germany and inductively analyzed them following Grounded Theory. Linking the Grounded Theory to the legal endogeneity model, they developed seven perspectives that help to explain how organizations view whistleblowing.

In trying to make sense of the role of whistleblowing in the organization’s governance, organizations and their managers assume different perspectives. These perspectives guide their approach to whistleblower protection in the context of evolving regulation with little regulatory guidance. Perspectives vary in the degree of supporting whistleblowing regulation, from viewing whistleblowing as a natural, everyday governance tool to denying it and fearing denunciation. Most organizations exhibit several perspectives.

Little is known about day-to-day whistleblowing practices from the perspective of organizations. The authors fill this research gap by providing initial evidence on how organizations approach whistleblowing and the EU Whistleblowing Directive. Identifying organizations’ perspectives may help us understand how ineffective or noncompliant whistleblowing systems emerge and how organizations can improve.

Adopting an intra-organizational viewpoint is essential to grasp legal intermediation. To deepen our understanding of such phenomena, this chapter proposes a qualitative and “multi-level” approach drawing on insights from the neo-institutional literature, policy ethnography analysis and the research on legal intermediaries. Such a perspective is particularly suited to capture the complexity and the depth of institutional change. Using the 12-hour work legal mechanism of derogation in the context of French public hospitals as an example, this chapter highlights how both macro-level actors (actors of a “reform network”), and micro-level ones (hospital directors) contribute to the shaping and framing of legality in French public hospitals. Results show that variation in how those actors use law depends on the local configuration. Second, results demonstrate that the legal games they play are not merely based on symbolic and superficial compliance with the law, but also on outright manipulations and conscious rule-breaking.

Legal intermediation is an emerging theoretical concept developed to grasp the importance of the process and actors who contribute to legal endogenization, in particular in the field of economic activities and work governed by various public regulations. This chapter proposes to extend the analytical category of legal intermediary to all actors who, even if they are not legal professionals, deal on a daily basis with legal categories and provisions. In order to deepen our understanding of these actors and their contribution to how organizations frame legality, this chapter investigates four examples of legal intermediaries who are not legal professionals. Based on field surveys conducted over the past 15 years in France on employment policy, industrial relations, occupational health and safety regulation, and forensic economics, I make three contributions. First, the cases show the diversity of legal intermediaries and their growing and increasingly reflexive roles in our complex economies. Second, while they are not legal professionals per se, to different degrees, these legal intermediaries assume roles similar to those of legal professionals such as legislators, judges, lawyers, inspectors, cops, and even clerks. Finally, depending on their level of legitimacy and power, I show how legal intermediaries take part in the process of legal endogenization and how they more broadly frame ordinary legality.

Employers using criminal background checks to make hiring determinations must carefully balance the need to protect themselves and their clients against legal mandates designed to protect the rights of individuals with criminal records. Yet, surprisingly little research examines this balancing act. The purpose of this paper is to examine how one large agency, the New York Department of Health (DOH), navigates a myriad of mandates to convey and create legitimacy in compliance with complex legal mandates and contrasting interests.

Prior research on civil right legislation suggests that while companies may create regulations that appear to comply with such mandates, their actual practice does not always comply with their own rules (Dobbin et al., 1988). Therefore, this study addresses two key questions: do the DOH policies appear to comply with the relevant New York State law and does the DOH effectively implement the policies in a way that upholds New York State law. Specifically, this study estimates probit models on a sample of over 7,000 potential employees with criminal records to determine compliance with the criteria established by law and policy.

Findings show that the variables indicated by law/regulations such as offense severity and time since conviction work in the intended direction. Using only these criteria the models are able to correctly predict clearance decisions approximately of the time and that extra-legal factors such as race and gender do not further influence final determinations.

These findings have practical implications for employers as they show that it is possible for employers to design formal rules that navigate this complex landscape while still opening up employment opportunities for individuals with criminal records.

This is important as many employers either utilize criminal background checks without regulation or are fearful of embarking on efforts to meet regulations such as those promulgated by the EEOC. This research is the first of its kind to actually document and explore the ability of a large employer to conduct socially responsible criminal history background checks.

Previous theories discuss how corporate managers can stir anti-discrimination laws away from their initial social goal by managerializing the law. Yet, other actors – notably insider activists – can contribute to move corporate regulations beyond merely symbolic compliance. I demonstrate this influence of activists with three cases studies: (1) LGBT activists for same-sex parental leave; (2) disability rights activists for implementing a quota; and (3) Muslim activists to secure accommodations in French workplaces. Through these cases, I show how activists can move corporate laws beyond compliance, pressure firms to go from merely symbolic to substantive compliance, and analyze mechanisms that explain their unequal success. Bringing together insights from the legal endogeneity theory and social movements theory, I analyze these activist legal intermediaries as actors faced with unequal structure of opportunities, and examine what factors hinder or favor an activist-driven legal endogeneity. I demonstrate the impact of more prescriptive regulations, the institutional power of union representatives (and their alignment with activists’ claims), reputational stakes for companies, and the resources of activists themselves (legal expertise, ability to reframe laws, and informal power within their organizations). Last, I show how activists leverage organizational and legal tools (collective agreement, diversity policies) to induce recoupling between formal commitments and informal practices.

This study aims to verify the respective and interactive effects of subnational formal and informal institutions (i.e. legal effectiveness and social trust) on foreign firm performance, and further identify the contingent factor (i.e. institutional experience) that moderates these relationships.

Drawing on the institutional-based view, this study develops several hypotheses that are tested using a comprehensive dataset from four main data sources. The authors’ unit of analysis is foreign firms operating in China. The authors ran ordinary least squares (OLS) regression model to investigate the effects. A series of robustness tests and endogeneity tests were performed.

The results show that both legal effectiveness and social trust at subnational level positively affect foreign firm performance respectively. Legal effectiveness and social trust at subnational level have complementary effect in promoting the performance of foreign firms. Foreign firm's institutional experience in target region of emerging economies host country strengthens the positive impact of subnational legal effectiveness on performance, but weakens the positive impact of subnational social trust on performance.

It is important to fully understand the impact of heterogeneous institutional environments of subnational regions in emerging economies on foreign firm performance, which would help foreign firm make a more suitable secondary choice decision of investment destinations at the subnational regional level.

First, drawing on institutional-based view, the authors incorporate the subnational formal and informal institutional factors to investigate their impacts on foreign firm performance by switching the attention from national level to subnational level in emerging economy host countries. Second, this research furthers existing studies by bridging a missing link between both subnational formal and informal institutional environments and foreign firms' outcomes. Third, the authors prove that the model of subnational formal and informal institutions in influencing foreign firms' performance is contingent on their institutional experience in target subnational region of emerging economy host country.

The purpose of this study is to identify the impact of legal institutions and property rights protection on corporate innovation among developing countries.

To testify these hypotheses, we use firm-level data from the World Bank Enterprise Survey, and country-level information from Worldwide Governance Indicators, World Development Indicators and Global Competitiveness Reports. The final data set consists of 24,166 firm observations, from 41 developing countries.

By using a wide range of control variables, the results propose that well-organized legal institutions stimulate corporate innovation . More precisely, a strong rule of law, effective government and protected property rights encourage firm-level innovation. Countries’ rule of law guarantees to solve disputes between parties and provide legitimate rights in case of innovation replication. Rule of law also directs that rules made by policymakers to secure the rights of innovators are well enforced. Moreover, strong property rights ensure innovators that the innovations are protected, and in case of any infringement, the guilty party will be punished and fined.

This study aims to investigate the role of all effective aspects legal institutions and property rights protection on corporate innovation among developing countries. Such security to prevent unlawful duplication will ultimately increase innovation.

The purpose of this study is to investigate the impact of board diversity on corporate social responsibility (CSR). The aim is twofold; does board diversity has any effect on CSR, do structural and demographic differences between one-tier and two-tier board models may impact this effect?

This paper applies a panel generalized method of moments estimator to a sample of 2,544 non-financial listed firms from 42 countries over the period of 2013–2017.

The findings reveal that board diversity leads to effective CSR. By distinguishing between diversity among boards from diversity within boards, the results display the effects of the specific variables that make up the manner and latter’s constructs within unitary and two-tier board structures. Specifically, this paper reveals that tenure, ideology and educational level (gender and nationality) predominantly appear to drive a firm’s CSR within one (two)-tier boards settings. These results remain consistent when robustness tests are ruled.

The study provides managers, investors and policymakers with knowledge about how among and within board diversity attributes favor the decision-making process around CSR. The evidence is useful for companies in setting the criteria to identify directors who can support their strategic decisions. It benefits, moreover, academics in better understanding firms’ CSR determinants and practices under different corporate board models.

Examining how different sets of board diversity affect firms’ CSR given divergences between one-tier and two-tier board structure is a useful and informative endeavor for all community actors.

Unlike prior studies that identify the limited scope of diversity, the study is the first to examine the effect of broader dimensions of board diversity on CSR under both one-tier and two-tier board settings. This paper provides a contribution to a greater understanding of the impacts underlying board models and different attributes of board diversity on CSR. This new understanding will help to improve predictions of different features of board diversity impacts on decision-making processes around organizational outcomes.

This article explores how legal intermediaries facilitate or inhibit social change. We suggest the increasing complexity and ambiguity of legal rules coupled with the shift from government to governance provide legal intermediaries greater opportunities to influence law and social change. Drawing from new institutional sociology, we suggest rule-intermediaries shape legal and social change, with varying degrees of success, in two ways: (1) law is filtered through non-legal logics emanating from various organizational fields and (2) law is professionalized by non-legal professionals. We draw from case studies in the United States and France to show how intermediaries facilitate or inhibit social change.