Divergent glocalization in a multinational enterprise: Institutional-bound strategic change in European and US subsidiaries facing the late-2000 recession

Purpose – This paper aims to unpack the organization of an multinational enterprise (MNE) and confront its meso-level complexity of structures and strategies. It seeks to uncover how the glocalization process unfolds, which are the mechanisms at its base and the outcomes in terms of stability, convergence or divergence in strategies and structures. Design/methodology/approach – Through a case study research design, the paper investigates strategic change in an Italian MNE from 2005 to 2011. In 2008 and 2010, extensive data on organizational configurations were also collected. Overall, the paper analyses the glocalized blending of corporate and subsidiary strategies and organizational structures. Attention is also paid to the cognitive, political and institutional mechanisms that accounted for this process before and during the late-2000 financial crisis. Findings – Glocalization, largely interpreted as an in-between process compromising between homogeneous global standards and heterogeneous local traditions, unfolds as a beyond process leading to divergent outcomes outside the poles of an imagined local-global continuum. The mechanisms driving strategic change partly differ from those usually described in strategic change literature emphasizing managerial cognition. Sensegiving from the center is found to be proactive during economic expansion and reactive during economic downturn. Following change initiation, cognitive mechanisms are “taken over” by political and institutional ones. Paradoxically, local societal-specific patterns of organization and strategy were preserved due to the actions of powerful central HQ actors. Originality/value – A theory of institutional-bound strategic change within MNEs is outlined. Keywords - Strategic change, Societal effect approach, New institutionalism, Multinational companies, Proactive and reactive sensegiving, Rationalization, Organizational structures, Italy, Change management Paper type - Case study