Clarification

Foreign multinationals abroad can often be at a disadvantage compared to local firms. For instance, they have to deal with additional difficulties of transferring and adapting their management and compensation practices to new cultural environments. Past research suggests that blending in and using practices that local companies are using – practices that are known to be inline with local cultural norms – can help multinational overcome their disadvantage. However, new research shows why sometimes local adaptation fails to be effective for multinationals (MNEs). Why do foreign MNEs that adopt compensation practices that local French firms use and that are in line with French cultural norms still face a disadvantage? Can a deeper understanding of local environments help MNEs make more strategic decisions in terms of their adaptation policies?

 Nishani Bourmault (NEOMA, France) and her co-author Jordan Siegel (University of Michigan, USA) used longitudinal survey data from the French Ministry of Labor and 50 in-depth interviews of employees working in France to analyze why a MNE’s home-country cultural norms – specifically their commitment to egalitarianism – plays a role in its successful implementation of collective bonuses in France.

Learn more on Journal of Management Studies Blog:

“Why Adopting Local Practices Doesn’t Always Help MNEs Overcome their Liability of Foreignness”, by Nishani Bourmault, Jordan Siegel | Oct 14, 2021 | Management Insights.

And if you wish to go further, the research article:

Bourmault, Nishani, and Jordan Siegel. “Why Local Adaptation Sometimes Fails to be Effective for MNEs: Exploring the Dynamics of Collective Bonuses, Egalitarianism, and Informal Norms.” Journal of Management Studies. Aug 2021. https://doi.org/10.1111/joms.12757

29 November 2021
Bourmault Nishani

THE AUTHOR

Bourmault Nishani

Professeur NEOMA BS

Nishani is an Assistant professor in the People and Organizations Department at NEOMA Business School. Nishani’s research explores how deeply embedded norms shape the experience of both individuals and organizations during times of transition and change. She uses qualitative and quantitative research methods in her work. Some examples of her research include studying former Paris subway drivers and how norms of responsibility internalized in this occupation shape their experience when they are promoted to managers. Other research focuses on understanding the role that broader societal norms, and the degree to which organizations internalize these norms, can play when organizations decide to change the types of organizational practices they use. Nishani focuses on the challenges of adopting less hierarchical practices as well as various compensation practices in the cultural context of France. Her research appears in journals such as Organization Science. She holds a doctorate from Harvard Business School and an undergraduate degree from Princeton University. Prior to joining academia, Nishani worked in finance trading fixed income products on Wall Street.