Changing Criteria for Internal Legitimacy and the Internationalization Process

Zeerim Cheung, Eero Aalto, Pasi Nevalainen

Research output: Chapter in Book/Report/Conference proceedingConference contributionScientificpeer-review

Abstract

We study the dynamics of internal legitimacy within a multinational corporation (MNC). Particularly, how changing criteria for internal legitimacy affect the internationalization process of a state-owned multinational company (SOMNC). As both shift in criteria for internal legitimacy and internationalization are time- consuming processes, we explore this with a historically embedded case study that spans over ten years. Based on extensive archival material we conduct an in-depth study of Telecom Finland undergoing both privatization and internationalization during the period of interest. We show that Telecom Finland’s criteria for internal legitimacy for its international ventures gradually changed from emphasizing national to multinational legitimacy. This shift had implications on both geographical market and partner preferences. Additionally, we uncover path dependent implications, as ventures established under national legitimacy continues to impact internationalization strategy under multinational legitimacy. Our study contributes to the discussion on legitimacy in MNC by looking at the dynamics of internal legitimacy from the parent’s perspective. We also extend the SOMNC literature by showing how rationales to internationalize can change as state influence decreases and how it impacts the internationalization process. Finally, we answer multiple calls in international business research to uncover complex, path dependent, and contextually embedded relationships using historical methods.
Original languageEnglish
Title of host publicationAcademy of Management Proceedings
PublisherAcademy of Management (AOM)
DOIs
Publication statusPublished - 9 Jul 2018
MoE publication typeNot Eligible
EventAcademy of Management Annual Meeting: Improving Lives - Chicago, United States
Duration: 10 Aug 201814 Aug 2018
Conference number: 78

Publication series

NameAcademy of Management Proceedings
Number1
Volume2018
ISSN (Electronic)2151-6561

Conference

ConferenceAcademy of Management Annual Meeting
Abbreviated titleAOM
CountryUnited States
CityChicago
Period10/08/201814/08/2018

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