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After decades of success in the global banking industry, the Royal Bank of Scotland fell to the brink of its collapse in 2008 owing to the recent global financial crisis that entirely shook the financial sector of the United Kingdom. The man whose leadership was once acknowledged for the remarkable success of the bank, former CEO Sir Fred Goodwin, was held entirely responsible for the collapse owing to his decisions of hostile acquisition of the ABN-Amro bank and pushing the banking industry into 'filthy' executive pay and bonus culture. The case study will review the evidence from 2000-2009 to discuss the rise and fall of the royal bank in the light of the corporate governance failures during the difficult times of global recession.

PurposeMultinational enterprises (MNEs) face twin pressures of maintaining a globally integrated brand while remaining responsive to local demands. Previous research has shown that misunderstandings may surface from the way subsidiary employees read corporate messages, particularly if institutional and social distances between corporate headquarters (HQs) and subsidiaries are wide. Employer branding is sometimes used to help resolve such tensions if HQs are sensitive to signals from their subsidiaries in the policy development process. Thus, this paper addresses the question: to what extent does institutional proximity facilitates the creation and maintenance of socially legitimate employer brands in MNE subsidiaries.Design/methodology/approachThe paper uses an interpretive approach in analysing two cases of multinational subsidiaries operating in Pakistan but with divergent HQ institutional distances (Northern Europe and Middle East). A qualitative approach to data collection was taken and ten semi-structured interviews with senior and middle managers and two focus groups of six lower level employees in each case organization were conducted.FindingsThe findings suggest that institutional proximity played a secondary role in establishing a legitimate employer brand whereas a receptive and responsive signalling process was of greater importance. The authenticity of the employer brand was stronger in the organization that was more receptive to the incoming signals from local employees compared to the firm that was rather institutionally closer due to shared customs and culture.Practical implicationsFindings point to the significance of the character and intensity of the employment relationship at a micro level as the honesty and credibility of organizational messages and interpreted and re-interpreted at a localized level, thereby bearing serious implications for both global and local managers.Originality/valueThese findings contribute to the IHRM literature on the integration-responsiveness problem, to the debate over institutional proximity, and to the influence of religion on people management.

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