4. Institutional diversity and management

Learning objectives understand what comparative institutional research is about explain the major differences between the three main European institutional approaches – varieties of capitalism, business systems and societal analysis understand the relationship between culture and the national institutional environment reflect critically upon the explanatory power of societal and institutionalist analysis assess the value of institutional typologies use approaches to analyse globalization pressures.

Chapter Outline (1) 4.1Institutional analysis: what and why? 4.2 Varieties of capitalism Industry-coordinated (or northern European) market economies Group-coordinated market economies 4.3The business systems approach Main features of business systems Institutional typology Background versus proximate institutions Major societal institutions Connections between dominant institutions and business system features 4.4 Business systems research applied to Taiwan and South Korea The Korean business system Institutional influences on the Korean business system The Taiwanese business system Institutional influences on the Taiwanese business system

Chapter Outline (2) 4.5 Integrating approaches Actor–structure relationship Institution as a process and a structure Institutional interdependence 4.6 Institutional change Causes of institutional change Theorizing institutional change 4.7 Conclusions Study questions Further reading Case: The Japanese Keiretsu Notes References

Table 4.1 Institutional typology

Table 4.2 Key characteristics of business systems

Table 4.3 Key institutional features structuring business systems

Table 4.4 Matching clusters and business system types

Table 4.5 Cluster membership 2011

Table 4.6 Matching Clusters and Business System Types

Table 4.7 The postwar business systems of Korea and Taiwan

Table 4.8 Dominant institutional influences on the postwar Korean business system

Table 4.9 Dominant institutional influences on the postwar Taiwanese business system

Study questions 1.Provide a brief outline of the main differences and/or similarities between the ‘varieties of capitalism’, ‘societal effect’ and ‘business systems’ approaches. 2.What is methodological individualism? 3.A major aim of the SE approach is to contextualize phenomena. (a) Explain what this means and how the approach goes about theorizing this aim. (b) Explain how contextualization can help the approach to overcome the gap between culturalism and institutionalism. 4.Explain how the notion of ‘space’, as it is used within the societal effect approach, is more extensive than the concept of an institutional domain. 5.Explain the differences between the concept of background institutions, as it is used in the BSys approach, and national culture.

Study questions 6.Assess whether and how the approaches in this chapter can help you to understand differences between organizations in different countries. 7.Explain why it is important to use ‘matched’ samples in comparative analysis. 8.Assess whether typologies, such as the one developed within the BSys approach, are useful analytical tools. 9.Explain how the SE approach is able to account for change as well as the type of change it accounts for. 10.Explain why the BSys framework is a static as opposed to a dynamic approach. 11.Explain how, despite the dynamic nature of the SE approach, there is a static aspect to the approach. 12.Explain whether and how both the BSys and the SE approaches recognize and are able to incorporate globalization pressures within their framework. 13.Explain whether and how institutional interconnectedness can hamper convergence despite globalization pressures