When a Japanese subsidiary is not a Japanese subsidiary: Internationalization as changing organizational identity and capabilities

Abstract

As multinational corporations (MNCs) have increasingly expanded abroad to seek out new assets and capabilities from different specialized locations, so they have sought to become embedded in diverse local social and cultural contexts. Several streams of work have examined the managerial challenges of the integrated network MNC, as well as factors influencing the successful adoption or transfer of organizational practices within the MNC. In this work, however, the role and dynamics of organizational identity, of how the organization’s members and outside audiences perceive the organization, remain largely unexplored. In a longitudinal case study of the international expansion over a 15-year period of the business unit of a Japanese MNC into the United States, I find that the North American subsidiary’s members engaged in identity work to construct a hybrid identity for their organization. It was through this hybrid identity that the organization’s members enacted their environment, organizational capabilities at integrating knowledge, strategy, and structure. These, in turn, recursively interacted with the organization’s hybrid identity in complex ways, either reinforcing it or stressing it, leading to identity change and renewed efforts at identity construction by the organization’s members. The dynamics of the organization’s hybrid identity are different from how changes occur in these other constructs, with identity playing an influential, and perhaps the key role, in the evolution of the organization.