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The Color of Faults Depends on the Lens: MNCs’ Legitimacy Repair in Response to Framing by Local Governments in China

Published online by Cambridge University Press:  03 July 2019

Xiao-xiao Liu
Affiliation:
Xiamen University, China
Lai Si Tsui-Auch
Affiliation:
Nanyang Technological University, Singapore
Jun Jie Yang*
Affiliation:
Xiamen University, Malaysia
Xueli Wang
Affiliation:
Tsinghua University, China
Aihua Chen
Affiliation:
Chongqing University, China
Kai Wang
Affiliation:
Capital University of Economics and Business, China
*
Corresponding author: Jun Jie Yang (junjie.yang@xmu.edu.my)

Abstract

Concerns over food safety in China not only direct public attention to negative incidents, but also trigger the government's scrutiny of implicated firms, particularly MNCs. The question of how to repair legitimacy after media coverage of negative incidents has become a critical issue for MNCs. Although the factors for MNCs’ public crises have been identified, how local contexts and mechanisms shape repair approaches remain unclear. To address this research gap, we conducted a study of Walmart China's approaches associated with two negative incidents across two regions. We found that the negative incidents can be framed differently depending on the local environment's unfavorability for MNCs. Specifically, the negative framing gave rise to varying degrees of legitimacy loss and offered different leeway for MNCs to repair their legitimacy. We also identified the varied outcomes of different repair approaches. By revealing the linkages among local context, framing, legitimacy repair, and its outcomes, our study contributes to research on MNCs’ legitimacy management under institutional complexity and underscores the China context for legitimacy maintenance. We also offer insights that advance the institutional approach to legitimacy repair in this context. Last, we reflect on the techniques for conducting qualitative research in China.

摘要

对中国食品安全的担忧不仅引发公众对负面事件的广泛关注,也激起政府对涉事公司特别是跨国公司的审查。媒体报道负面事件后,如何开展合法性修复已成为跨国公司面临的重要议题。已有研究考察了引发跨国公司公共危机的因素,但本土情境及其塑造合法性修复的机制有待挖掘。本研究分析了沃尔玛中国在两个不同地区的负面事件及其应对策略,发现当地对跨国公司的偏好影响了对负面事件的界定。具体而言,负面框定导致了不同程度上的合法性损失,并塑造了跨国公司在修复合法性过程中可回旋的余地。此外,不同合法性修复策略也会引发不同效果。通过揭示当地情境、框定、合法性修复及其效果之间的关系,本研究有助于理解在制度复杂性下跨国公司的合法性管理,彰显了中国情境下合法性维护的特色,提升了对合法性修复中制度路径的理解。最后,我们对在中国开展质性研究的策略进行了反思。

Аннотация

Тревога за безопасность продуктов питания в Китае не только обращает внимание общественности на негативные инциденты, но и вызывает пристальное внимание со стороны правительства по отношению к виновным компаниям, особенно к МНК. Вопрос о том, как восстановить легитимность после освещения в СМИ негативных инцидентов, стал критически важным для МНК. Хотя причины общественного кризиса для МНК известны, то, каким образом местные условия и механизмы влияют на попытки восстановления репутации, остается неясным. Чтобы устранить этот пробел в научной литературе, мы исследовали методы работы Walmart в Китае, которые связаны с двумя негативными инцидентами в двух регионах. Мы обнаружили, что негативные инциденты могут быть представлены по-разному в зависимости от неблагоприятных местных условий для МНК. В частности, негативное обрамление приводило к различной степени потери легитимности и предполагало различные возможности для МНК восстановить свою легитимность. Мы также определили различные результаты в зависимости от разных способов восстановления легитимности. Изучая взаимосвязь между местным контекстом, когнитивным искажением, восстановлением легитимности и его результатами, наша работа вносит свой вклад в исследования по управлению легитимностью МНК в условиях институциональной сложности, уделяя при этом особое внимание китайскому контексту для поддержания легитимности. Мы также делаем выводы, которые поддерживают институциональный подход к восстановлению легитимности в этом контексте. Наконец, мы размышляем о тактике проведения качественных исследований в Китае.

Resumen

Las preocupaciones sobre la inocuidad de los alimentos en China no solo dirigen la atención pública a los incidentes negativos, sino que también detona el escrutinio del gobierno de las empresas implicadas, en particular de las multinacionales. La pregunta de cómo reparar la legitimidad después de la cobertura de incidentes negativos en los medios se ha convertido en un tema crítico para las empresas multinacionales. A pesar que se han identificado los factores de las crisis públicas de las empresas multinacionales, cómo los contextos y mecanismos locales dan forma a los enfoques de reparación aún no es claro. Para abordar esta brecha en la investigación, realizamos un estudio de los abordajes de Walmart China asociados con dos incidentes negativos en dos regiones. Encontramos que los incidentes negativos pueden encuadrarse de manera diferente dependiendo de la desfavorabilidad del entorno local para las empresas multinacionales. Específicamente, el encuadre negativo dio lugar a diversos grados de pérdida de legitimidad y permitió un margen de maniobra diferente para que las empresas multinacionales repararan su legitimidad. Identificamos también que los resultados variados de diferentes abordajes de reparación. Revelando los vínculos entre el contexto local, el marco, la reparación de la legitimidad y sus resultados, nuestro estudio contribuye a la investigación sobre la gestión de la legitimidad de las empresas multinacionales en la complejidad institucional y subraya el contexto de China para el mantenimiento de la legitimidad. También ofrecemos entendimientos que avanzan el enfoque institucional para la reparación de la legitimidad en este contexto. Por último, reflexionamos sobre las tácticas para realizar una investigación cualitativa en China.

Type
Special Issue Articles
Copyright
Copyright © The International Association for Chinese Management Research 2019 

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Footnotes

Accepted by: Guest Editor Tian Wei

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