Multinational corporations as institutional entrepreneurs: the dynamic interplay between automobile firms and the Turkish vocational education and training system

• Author: Vildan Tasli‐Karabulut,Arjan Keizer
• Date: 01 May 2020
• Published date: 01 May 2020
• DOI: http://doi.org/10.1111/irj.12286

Multinational corporations as institutional

entrepreneurs: the dynamic interplay

between automobile firms and the Turkish

vocational education and training system

Vildan Tasli-Karabulut*and Arjan Keizer

ABSTRACT

This article analyses the two-way relationship between multinational companies

(MNCs) and Turkey’s vocational education and training system through case studies

of Japanese and German MNCs in the automotive industry. Drawing on

semistructured interviews, it addresses the initiatives the MNCs have taken to guaran-

tee skilled employees and their interaction with the Turkish vocational education and

training system. The analysis shows how the MNCs have been ‘institutional entrepre-

neurs’by introducing new practices. This was possible as the host environment has

been open to change but also a requirement where strong industrial relations systems

constituted an essential but missing home country institution.

1 INTRODUCTION

An extensive literature has developed on the diffusion of employment practices by

multinational companies (MNCs) to their foreign subsidiaries. It recognises a wide

set of determining factors including the home and host-country environment, the

character of the MNC, specifics of the subsidiary and the employment practices con-

cerned (Edwards et al., 2007; Ferner et al., 2011; Rosenzweig and Nohria, 1994).

Micropolitical and strategic contributions stress the interaction between staff at head-

quarters and subsidiaries (Almond and Ferner, 2006; Dörrenbächer and

Geppert, 2011). However, relatively few studies (e.g. Almond et al., 2017; Tempel

and Walgenbach, 2012) have analysed the actual processes whereby MNCs adjust

their practices, the potential leeway that characterises these processes and their contri-

bution to the host environment.

This article addresses these issues by studying the Turkish subsidiaries of two auto-

mobile MNCs and their practices for skill development. The choice for Turkey adds

to the growing but still limited research on the impact of MNCs on developing econ-

omies. The case-study firms, respectively, from Japan and Germany, were chosen for

both the unique character of vocational education and training (VET) in their home

❒Vildan Tasli-Karabulut, Faculty of Economics and Administrative Sciences, Department of Business

Administration, University of Yalova, Yalova, Turkey and Arjan Keizer, Alliance Manchester Business

School, University of Manchester, Manchester, UK. Correspondence should be addressed to: Vildan

Tasli-Karabulut, Faculty of Economics and Administrative Sciences, Department of Business

Administration, University of Yalova, Yalova, Turkey.

Email: vildantasli@gmail.com

© 2020 The Authors. Industrial Relations Journal published by Brian Towers (BRITOW) and John Wiley & Sons Ltd

Industrial Relations Journal 51:3, 153–168

ISSN 0019-8692

This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribu-

tion and reproduction in any medium, provided the original work is properly cited.

countries and their introduction of new approaches for skill development in Turkey.

The Japanese subsidiary introduced a ‘laboratory model’consisting of firm-specific

classes in vocational schools while the German subsidiary introduced a dual VET

approach. The article analyses the two-way relationship between the MNCs and the

host-country environment by answering two interlinked questions. First, which initia-

tives have the MNCs taken to guarantee skilled employees for their operations?

Second, how have these initiatives interacted with the Turkish VET system?

The article shows how MNCs have acted as ‘institutional entrepreneurs’by intro-

ducing new practices to Turkey’s VET system. It draws on a theoretical framework

that stresses the two-way dynamic interplay between MNCs and their host environ-

ment whereby the latter constrains firms but also allows them to diffuse or adapt

existing practices and to develop new ones. The analysis will show that the Turkish

environment has been rather ‘open’to the new practices in spite of the state-led

character of the VET system as requirements have been minimal and the state has em-

braced the firms’initiatives. This confirms the potentially strong position of MNCs

and the increased accommodation by states to attract foreign investment (e.g.

Almond et al., 2017). However, the findings also illustrate how a lack of enabling in-

stitutions can pose a major constraint. In this case, the absence of strong national and

industry-wide coordination under the country’s authoritarian industrial relations re-

gime (Özkiziltan, 2019) has constrained the development of the dual system by the

German firm and its potential impact on the Turkish VET system.

The next section discusses the relevant literature on the relationships between

MNCs and their host environment, including the role of MNCs as a potential force

for (de-)institutionalisation and the different host institutions that may influence

MNC strategies. A description of the study’s methodology is then followed by the

presentation and discussion of the main findings. The article subsequently provides

an institutional analysis before discussing the main conclusions.

2 MULTINATIONAL COMPANIES AND HOST-COUNTRY INSTITUTIONS

A rich body of literature focuses on the relationship between MNCs and their host en-

vironment. It particularly examines how MNCs adjust subsidiary practices to the

host-country context (e.g. Ferner et al., 2001; Myloni et al., 2004). Firms face various

pressures (legal and quasilegal requirements, norms and values, and socio-economic

conditions) to act similarly to other organisations sharing the same environment

(Grønhaug and Nordhaug, 1992; Rubery and Grimshaw, 2003). The unique position

of MNCs as embedded in multiple organisational fields makes this particularly chal-

lenging because of the conflicting ‘isomorphic pulls’they face (Westney, 1993). Fail-

ure to uphold practices is likely to result in penalties, a lack of legitimacy and limited

access to local resources (Bjorkman et al., 2007; Scott, 2001). This holds in particular

for employment practices as they tend to be strongly embedded within national con-

texts (Rosenzweig and Nohria, 1994).

At the same time, MNCs may also act as ‘institutional entrepreneurs’

(DiMaggio, 1988) or ‘norm entrepreneurs’(Brookes et al., 2017) by introducing

‘new practices that represent a departure from prevailing norms’(Edwards and

Zhang, 2008: 54–55). This can concern processes of institutionalisation and

de-institutionalisation (Westney, 1993). Institutionalisation emerges when MNC sub-

sidiaries play a leading role in establishing institutional practices. De-

institutionalisation, on the other hand, takes place when ‘the introduction of new

154 Multinational corporations as institutional entrepreneurs

© 2020 The Authors. Industrial Relations Journal published by Brian Towers (BRITOW) and John Wiley & Sons Ltd