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How national are business systems? The role of different state types and complementary institutions in constructing homogenous systems of economic coordination and control

Working Paper

Whitley, Richard; Manchester Metropolitan University Business School, 13-07-2017

Online access

  • Title:
    How national are business systems? The role of different state types and complementary institutions in constructing homogenous systems of economic coordination and control
  • Author: Whitley, Richard
  • Subjects: Management & leadership: including strategy, public sector management, operations and production
  • Publication Details: Manchester Metropolitan University Business School, 13-07-2017
  • Description: Downloadable working paper which suggests how different kinds of states with complementary institutions can be expected to standardise contrasting varieties of firm governance structures.
  • Abstract: A central tenet of economic sociology is that culture and regulatory institutions help to constitute the nature of economic actors and guide their actions, thus affecting economic outcomes (see, e.g., DiMaggio, 1994; Smelser and Swedberg, 1994). As socially organised agents operating in different kinds of societal contexts, firms and other actors are inevitably affected by the dominant norms and conventions governing the formation of groups and how competition and collaboration between them is to be structured. The institutionalisation of separate economic arenas with their own distinct 'rules of the game' during the development of industrial capitalism, does not, in this view, negate the socially constructed nature of firms and markets (Polanyi, 1957). This paper suggests how different kinds of states with complementary institutions can be expected to standardise contrasting varieties of firm governance structures, authority sharing and organisational capabilities across sectors, regions and firm sizes. First, it summarises the key features of four kinds of states in terms of their pursuit of economic development and involvement of different types of interest groups in policy formulation and implementation, and suggest how they are likely to be associated with variously organised and standardised institutional arrangements. Then, it consider how these different states and national institutional arrangements are likely to encourage varying degrees of standardisation of firm governance structures and strategies across sectors, and how these in turn generate nationally distinctive forms of authority sharing, commitment and organisational capabilities in different kinds of firms. Finally, it discusses how the changing international business environment (IBE) and growing internationalisation of trade and investment can be expected to impinge upon these kinds of nationally distinctive business systems and companies.
  • Series: University of Manchester Business School Working Papers. No. 450

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