How do Companies Adapt to Cultural Factors to Gain Legitimacy in International Markets ?

Abstract

The internationalization process entails challenges, and companies need to identify the best manner to reach social support and legitimacy in the host countries. Among the main challenges, cultural differences between the home and foreign country should be highlighted. Since legitimacy is achieved through consistent corporate behavior aligned with social norms and values, enterprises must identify and adapt to these cultural differences to succeed in the expansion process. Therefore, the main objective of this research is to identify the most critical barriers in the internationalization process as well as to provide solutions and guidelines for future enterprises that want to follow an international approach.

Keywords

• Legitimacy
• Institutional Context
• Cultural Values
• Internationalization

References

1. Adamczyk, M. (2017). The importance of cultural differences in international business. The Central European Review of Economics and Management, 1(2), 151-170. https://doi.org/10.29015/cerem.335 google scholar
2. Adler, N. (1980). Cultural synergy: The management of cross-cultural organizations. In W.W. Burke and D. Goodstein (Eds) Trends and Issues in OD: Current Theory and Practice (163-184). San Diego, California: University Associates. google scholar
3. Barley, S. R. and Tolbert, P. S. (1997). Institutionalization and Structuration: Studying the Links between Action and Institution. Organi^ zation Studies, 18(1), 93-117. https://doi.org/10.1177/017084069701800106 google scholar
4. Bitektine, A. and Haack, P. (2015). The “macro” and the “micro” of legitimacy: Toward a multilevel theory of the legitimacy process. google scholar
5. Academy of Management Review, 40(1), 49-75. doi:10.5465/amr.2013.0318 google scholar
6. Blanco-Gonzalez, A., Diéz-Martín, F., Cachón-Rodríguez, G. and Prado-Román, C. (2022). Contribution of social responsibility to the work involvement of employees. Corporate Social Responsibility and Environmental Management, 27(6), 2588-2598. https://doi.org/10. 1002/csr.1978 google scholar
7. Brouthers, K.D., & Hennart, J.-F. (2007). Boundaries of the firm: Insights from international entry mode research. Journal of Management, 33(3). http://dx.doi.org/10.1177/0149206307300817 google scholar
8. Buckley, P.J. (2015). The contribution of internalization theory to international business: New realities and unanswered questions. Journal of World Business, 51(1), 74-82. https://doi.org/10.1016/j.jwb.2015.08.012 google scholar

9. Casillas, J.C., & Acedo, F.J. (2012). Speed in the internationalization process of the firm. International Journal of Management Reviews, 15(1), 15-29. https://doi.org/10.1111/j.1468-2370.2012.00331.x google scholar
10. Creswell, J.W. (2014), Research Design: Qualitative, Quantitative, and Mixed Methods Approaches, Thousand Oaks, CA: Sage. google scholar
11. Dacin, T., Oliver, C. and Roy, J.-P. (2006). Legitimacy of strategic alliances: an institutional perspective. Strategic Management Journal, 28(2), 169-187. https://doi.org/10.1002/smj.577 google scholar
12. Deephouse, D.L. (1996). Is isomorphism legitimate? Academy of Management Journal, 39(4), 1024-1039. https://doi.org/10.2307/256722 google scholar
13. Deephouse, D. and Suchman, M. (2008). Legitimacy in organizational institutionalism. In The SAGE Handbook of Organizational Institutionalism http://dx.doi.org/10.4135/9781849200387.n2 google scholar
14. Díez-Martín, F., Blanco-González, A., & Díez-de-Castro, E. (2021). Measuring a scientifically multifaceted concept. The jungle of organizational legitimacy. European Research on Management and Business Economics, 27(1), 100131. doi:10.1016/j.iedeen.2020.10.001 google scholar
15. Feldberga, E. and Grike, K. (2015). Harmonization of intercultural barriers in international business: The case of Latvia and Norway. Procedia^Social and Behavioral Sciences, 213, 938-943. doi:10.1016/j.sbspro.2015.11.508 google scholar
16. Fitzpatrick, K.R., White, C.L., & Bier, L.M. (2020). C-suite perspectives on corporate diplomacy as a component of public diplomacy. Place Branding and Public Diplomacy, 16, 25-35. https://link.springer.com/article/10.1057/s41254-019-00123-9 google scholar
17. Glozer, S., Caruana, R., & Hibbert, S.A. (2019). The never-ending story: discursive legitimation in social media dialog. Organizational Studies, 40(5), 625–650. https://doi.org/10.1177/0170840617751006 google scholar
18. Hoffman, A.J. (2001). From Heresy to Dogma: An Institutional History of Corporate Environmentalism. California: Standford University Press; 2008. google scholar
19. Javadian, G., Figueroa-Armijos, M., Gupta, V. K., Modarresi, M., & Dobratz, C. (2021). Does it pay to act feminine? A cross-cultural study of gender stereotype endorsement and cognitive legitimacy in the evaluation of new ventures. International Journal of Gender and Entrepreneurship, 13(4), 330-352. https://doi.org/10.1108/IJGE-07-2020-0092 google scholar
20. Jiang, T., Yang, B., Yang, B., Wu, B., & Wan, G. (2022). How does liability of origin influence cross-border acquisition completion? Evidence from Chinese firms. Chinese Management Studies, 16(4), 857-884. https://doi.org/10.1108/CMS-02-2021-0079 google scholar
21. Johnson, J.S. (2015). Qualitative sales research: an exposition of grounded theory. Journal of Personal Selling and Sales Management, 35(3), 262-273, https://doi.org/10.1080/08853134.2014.954581 google scholar
22. Kostova, T., & Zaheer, S. (1999). Organizational legitimacy under conditions of complexity: The case of a multinational enterprise. Academy of Management Review, 24(1), 64-81. https://doi.org/10.2307/259037 google scholar
23. Lvina, E., Matveev, A., & Grishin, G. (2019). Transforming cultural barriers into assets: lessons learned from a global insurance broker. Review of International Comparative Management, 20(3), 226-240. http://dx.doi.org/10.24818/RMCI.2019.3.226 google scholar
24. Marschlich, S., & Ingenhoff, D. (2022). Public-private partnerships: How institutional linkages help to build organizational legitimacy in an international environment. Public Relations Review, 48(1), 102124. https://doi.org/10.1016/j.pubrev.2021.102124 google scholar
25. Mendy, J. and Rahman, M. (2018). Application of human resource management’s universal model: An examination of people versus institutions as barriers to internationalization for SMEs in a small developing country. International Business Theory and Appli^ cation, 61(2), 363-374. https://doi.org/10.1002/tie.21985 google scholar
26. Okoro, E. (2012). Cross-Cultural etiquette and communication in global business: Toward a strategic framework for managing corporate expansion. International Journal of Business and Management, 7(16), 130-138. http://dx.doi.org/10.5539/ijbm.v7n16p130 google scholar
27. Ozanne, J.L., & Saatcioglu, B. (2008). An interpretive examination of the development of cultural sensitivity in international business. Journal of International Business Studies, 39, 71-87. http://dx.doi.org/10.1057/palgrave.jibs.8400327 google scholar
28. Plaza-Casado, A., Blanco-González, A., Rivero-Gutiérrez, L., & Gómez-Martínez (2024). Does the legitimacy of countries influence the internationalization of emerging market multinationals. European Research on Management and Business Economics, 30(1), 100233. https://doi.org/10.1016/j.iedeen.2023.100233 google scholar
29. Preikschas, M.W., Cabanelas, P., Rüdiger, K. & Lampon, J.F. (2017). Value co-creation, dynamic capabilities and customer retention in industrial markets. Journal of Business and Industrial Marketing, 32(3), 409-420, https://doi.org/10.1108/JBIM-10-2014-0215 google scholar
30. Rivero-Gutiérrez, L., Cabanelas-Lorenzo, P., Díez-Martín, F. & Blanco-González, A. (2024). How can companies boost their legitimacy in international markets? A dynamic marketing capabilities approach. International Marketing Review, 41(1), 273-301. https://doi. org/10.1108/IMR-09-2022-0215 google scholar
31. Roy, A., Sekhar, C. and Vyas, V. (2016). Barriers to internationalization: A study of small and medium enterprises in India. Journal of International Entrepreneurship, 14, 513-538. https://doi.org/10.1007/s10843-016-0187-7 google scholar
32. Schembera, S. and Scherer, A. G. (2014). Organizational strategies in the context of legitimacy loss: Radical versus gradual responses to disclosed corruption. Strategic Organization, 15(3), 301-337. http://dx.doi.org/10.1177/1476127016685237 google scholar
33. Shenkar, O. (2001). Cultural distance revisited: toward a more rigorous conceptualization and measurement of cultural differences. google scholar
34. Journal of International Business Studies, 32, 519-535. doi:10.1057/palgrave.jibs.8490982 google scholar
35. Sonpar, K., Pazzaglia, F. and Kornijenko, J. (2010). The paradox and constraints of legitimacy. Journal of Business Ethics, 95, 1–21. http:// dx.doi.org/10.1007/s10551-009-0344-1 google scholar
36. Stahl, G.K., & Tung, R.L. (2015). Toward a more balanced treatment of culture in international business studies: The need for positive cross-cultural scholarship. Journal of International Business Studies, 46, 391–414 http://dx.doi.org/10.1057/jibs.2014.68 google scholar
37. Stenholm, P., Acs, Z. J., & Wuebkerd, R. (2013). Exploring country-level institutional arrangements on the rate and type of entrepreneurial activity. Journal of Business Venturing, 28(1), 176-193. https://doi.org/10.1016/j.jbusvent.2011.11.002 google scholar
38. Suchman, M. C. (1995). Managing legitimacy: Strategic and institutional approaches. Academy of Management Review, 20(3), 571-610. doi: 10.2307/258788 google scholar
39. Suddaby, R., Bitektine, A. and Haack, P. (2016). Legitimacy. Academy of Management Annals, 11(1), 451-478. http://dx.doi.org/10.5465/ annals.2015.0101 google scholar
40. Susith, F. and Stewart, L. (2014). A theoretical framework for CSR practices: Integrating legitimacy theory, stakeholder theory and institutional theory. The Journal of Theoretical Accounting, 10(1), 149-178. google scholar
41. Tenzer, H. and Pudelko, M. (2017). Influence of language differences in power dynamics in multinational teams. Journal of World Business, 52(1), 45-61. https://doi.org/10.1016/j.jwb.2016.11.002 google scholar
42. Yang, Z., Su, C. and Fam, K.-S. (2012). Dealing with institutional distances in international marketing channels: Governance strategies that engender legitimacy and efficiency. Journal of Marketing, 76(3), 41-55. https://www.jstor.org/stable/41714488 google scholar
43. Yin, J., Rothlin, S., Li, X., Caccamo, M. (2013). Stakeholder perspectives on the corporate social responsibility (CSR) of multinational companies in China. Journal of International Business Ethics, 6 (1–2), 57. google scholar
44. Zamparini, A., Lurati, F., (2017). Being different and being the same: multimodal image projection strategies for a legitimate distinctive identity. Strategic Organization, 15 (1), 6–39. https://doi.org/10.1177/1476127016638811. google scholar
45. Zhang, J., Deephouse, D. L., van Gorp, D., & Ebbers, H. (2020). Individuals’ perceptions of the legitimacy of emerging market multinationals: Ethical foundations and construct validation. Journal of Business Ethics, 1-25. https://doi.org/10.1007/s10551-020-04599-x google scholar