The politics of cultural capital: Social hierarchy and organizational architecture in the multinational corporation

Abstract

How is social hierarchy in multinational corporations (MNCs) culturally produced, contested and reproduced? Although the international business literature has acknowledged the importance of culture, it gives little consideration to its role in constructing social hierarchies and symbolic boundaries between individuals and groups within MNCs. We take a Bourdieusian approach to understanding the role of cultural capital in structuring the social hierarchy in the MNC under two contrasting organizational architectures: hierarchical and network architecture. We argue that cultural capital serves as an instrument of power and status within the MNC, influencing access to valuable resources such as jobs, rewards and opportunities. Our framework further suggests that the transition from hierarchical towards network architecture sets in motion a high-stakes political struggle between headquarters and subsidiary actors over the relative value of their cultural capital in a bid to preserve or gain dominance and to determine the ‘rules of the game’ that order the social hierarchy in the MNC. We elaborate on this political struggle by theorizing about the relative dominance of cultural versus social capital, the content and relative value of firm-specific and cosmopolitan cultural capital, and the convertibility of cultural capital into other forms of capital under hierarchical and network architectures.

Sowing the seeds of subsidiary influence: Social navigating and political maneuvering of subsidiary actors

“…The significant shift from a hierarchical to a networked MNE has challenged how the subsidiary manages its changing relationship with corporate HQ and has created a “high stakes” political contestation in the struggle to develop and maintain influence (Egelhoff & Wolf, ; Levy & Reiche, ). Despite calls to explore how the subsidiary can cultivate greater influence in this context, extant research has largely failed to address the ongoing microlevel interactions that take place on a daily basis between key actors at the corporate HQ‐subsidiary interface (Geppert & Dorrenbacher, ; O'Brien et al, ; Pla‐Barber et al, ).…”

“…Exploratory case study research is particularly appropriate for exploring the early stage relationship between complex and dynamic issues (Eisenhardt, 1989;Gibbert, Ruigrok, & Wicki, 2008). The extant literature has called for more qualitative case studies in the international business (IB) field in general (Birkinshaw, Brannen, & Tung, 2011;Cuervo-Cazurra, Andersson, Brannen, Nielsen, & Reuber, 2016;Welch, Piekkari, Plakoyiannaki, & Paavilainen-Mantymaki, 2011), emphasizing the value of case studies as an appropriate tool for investigating social and political dynamics in MNEs (Dorrenbacher & Gammelgaard, 2016;Geppert & Dorrenbacher, 2014;Levy & Reiche, 2017). As such, case studies are uniquely suited to opening the black box of "how," "who," and "why" questions (Doz, 2011) in the context of corporate HQ-subsidiary relationships (Collings & Dick, 2011).…”

“…Extensive, efficacious, and quality interactions may lead to a higher chance of subsidiary actors developing personal relations with corporate executives (Kostova & Roth, 2003). Social skill may be particularly relevant in the context of larger structural changes, and the flexibility to adapt to changes in the social hierarchy that lead to the development of new networks is important (Levy & Reiche, 2017). Being proactive during this change often requires taking self-initiated action to alter the social environment or challenge the status quo (Grant & Rothbard, 2013).…”

“…These insights also address shortcomings in considering the negative aspects of using political skill (Zettler & Lang, 2015) and how the politicizing process affects the subsidiary's mandate (Birkinshaw & Ridderstrale, 1999). Further work is needed on how the disaggregation of corporate HQ responsibilities to key subsidiary actors may impact the overall structure of the MNE and create further complexity in maintaining subsidiary influence (Levy & Reiche, 2017;O'Brien et al, 2018;Pla-Barber et al, 2017).…”

Multiculturalism within individuals: A review, critique, and agenda for future research

“…Given these connections, multicultural individuals are in a unique position to help MNEs recognize the valuable contributions of employees from lower power groups. For example, multicultural individuals who are motivated by their in-group affiliation with lower status groups and have knowledge of cultural norms that limit a group's career success may suggest human resource procedures that find and develop talent of lower status groups within MNEs (Levy & Reiche, 2018). Multicultural individuals might suggest promotion processes that are not biased toward employees based at headquarters, or advocate for mentorship programs that help employees from lower status groups reach leadership positions (Chanland & Murphy, 2018).…”