This paper attempts to develop a new approach to the study of corporate strategy. It draws on the methodology of Michel Foucault to suggest that corporate strategy can be seen as a discourse which has its own specific conditions of possibility. These are traced historically to various exercises of power within the conduct of war and the development of business organizations. Strategy is located as an emergent set of practices which has distinctive power effects on organizations and subjectivity. Analyses of strategy cannot be reduced either to rationalist accounts of markets and environments nor interpretive understandings of actors' frames of reference. The emergence and reproduction of 'strategy' as an essential element in managerial discourse needs to be located in specific changes in organizations and managerial subjectivity, because it is a mechanism of power that transforms individuals into particular kinds of subjects who secure a sense of well-being through participation in strategic practices.

The article argues that institutionalist theory applied to multinationals focuses on the issue of ‘institutional duality’, that is, that within multinationals, actors are pressured to conform to the expectations of their home context whilst also being subjected to the transfer of practices from the home context of the MNC itself. This institutional duality leads to conflicts that can be labelled as forms of ‘micro-politics’. The head office managers transfer practices, people and resources to subsidiaries in order to maintain control and achieve their objectives. Local subsidiaries have differential capacities to resist these transfers or to develop them in their own interests depending on their institutional context. The article distinguishes institutional contexts that produce ‘Boy Scout’ subsidiaries, doing what they are told and consequently allowing locally distinctive capabilities to be undermined and those that produce ‘subversive strategists’ which look to deepen their connection with the local context not the MNC itself. These processes are exacerbated by the demands of capital markets which impose performance requirements on MNCs and lead to continuous organizational restructuring. Head offices become stronger in their attempts to impose standards in all their subsidiaries. The consequences of these processes are that except for a few pockets of ‘subversive strategists’, multinationals produce subsidiary ‘clones’ with little ability to leverage the specific assets which the institutional context provides. As it is the subversive strategists that are best placed to be innovative, the problem for the MNC is how to manage this tension.

This article addresses the question of how economic actors (re)shape their organizational and institutional contexts as their activities internationalize. By focusing on law firms, we choose a professional activity that has been regarded as highly determined by the national distinctiveness of professional and legal systems and would lead us to expect strong institutional legacies on firm dynamics. The comparative study of the growth and internationalization of corporate law firms in the UK and Germany presented in this article, however, refutes this view. The results reveal that in both settings 'institutional pockets' of corporate lawyers existed whose entrepreneurial orientations and international reach were much stronger than among other subgroups of the profession. From the 1970s onwards, these lawyers and law firms engaged in redefining their organizational and institutional contexts with the aim of positioning themselves in ways that would allow them to seize upon the emerging international markets for legal services. They did so in different ways and at different times in each country. We conclude that internationalization of UK and German law firms bears traces of institutional legacies as well as signs of pathmodification, and that international markets for legal services may be more differentiated and less dominated by Anglo-Saxon law firms and conceptions of law than has been so far recognized.

Drawing on an empirical study of four major international management consultancies, this article examines managerial efforts to construct 'global' organizations. We show how these efforts are undermined by interoffice conflicts over the staffing of client projects. We argue that such constraints cannot be adequately understood as an outcome of inappropriate organizational structures and incentives since this explanation ignores the important role of institutional contexts. In this vein, we outline and develop four different institutionalist lenses and apply them to the empirical findings. In so doing, we reveal the need to adopt a multi-dimensional institutionalist approach to the study of 'global' firms, one that can account for not only national effects but also transnational and neocolonial influences on these organizations.

The paper examines the concept of 'transnational communities' as a way of understanding globalization practices in business and management. It argues that 'transnational communities' are emergent properties of the internationalizing of economic activity. Three specific aspects of this process are considered in detail: the development of multinational companies; the development of international regulatory bodies; and the development of cognitive and normative frameworks through the practices of business education, management consultancies and other global professsional service firms. It is argued that in each case, transnational spaces are emerging; within these spaces, transnational communities are developing. The article calls for more research into the diverse nature of these spaces and communities as a way of avoiding the sterile polarities of what Held et al. (1999) refer to as the 'hyperglobalists' and the 'sceptics'.