A vast literature examines spread of new management practices across organizations (e.g., Lounsbury, Reference Lounsbury2001; Tolbert & Zucker, Reference Tolbert and Zucker1983; Westphal, Gulati, & Shortell, Reference Westphal, Gulati and Shortell1997; Westphal & Zajac, Reference Westphal and Zajac1994; for a review see Sturdy, Reference Sturdy2004) addressing three core issues, namely timing of adoption by organizations, organizational motivations for adoption, and implementation of adopted practices. Explanatory models used in this literature typically address diffusion of a practice within the national context where it emerges, which we label the source country, or disregard whether the practice in question is imported. However, management practices travel across national borders and their diffusion in countries importing them, which we label recipients, may be shaped by a unique constellation of forces that constitute a peculiar institutional context, leading to patterns different from those observed in source countries.
Another strand of diffusion literature that addresses cross-national diffusion (e.g., Alvarez, Reference Alvarez and Alvarez1998; Drori, Höllerer,& Walgenbach, Reference Drori, Höllerer and Walgenbach2014; Kipping, Engwall, & Üsdiken, Reference Kipping, Engwall and Üsdiken2009) clearly indicates that being imported may have important ramifications. However, this literature focuses mostly on global isomorphic mechanisms or country-level factors in order to explain what happens across countries. Therefore, it provides limited information as to how imported practices diffuse across organizations within recipient countries. This latter issue has been addressed by a small number of studies (e.g., Höllerer, Reference Höllerer2013; Hwang, Jang, & Park, Reference Hwang, Jang, Park, Drori, Höllerer and Walgenbach2014). Thus, the extent to which models from the former strand are applicable to recipient countries is under-researched. Even less is known about the diffusion of imported practices within late-industrializing countries (Kipping, Engwall, & Üsdiken, Reference Kipping, Engwall and Üsdiken2009), which have been modernized predominantly through borrowing knowledge from early-industrialized ones like Britain or the US (Amsden, Reference Amsden2001). This is regrettable, as late-industrializing countries arguably constitute the majority of recipients and offer greater opportunities for clarifying the scope conditions of our existing knowledge on the diffusion of practices across organizations. Research addressing late-industrializing countries could also shed some light on why imported practices often fail to become institutionalized in these countries (Meyer, Reference Meyer, Krücken and Drori2009).
In this paper, based on diffusion literature guided principally by the new institutional approach, we develop and empirically test hypotheses about imported practice diffusion across organizations within a late-industrializing recipient, namely Turkey, and discuss the generalizability of our arguments to other late-industrializing recipients. In our theoretical framework, we initially argue that three forces underlie imported practice diffusion in Turkey: (1) well-codified nature of imported practices, (2) historical dependence on practices imported from the early-industrialized countries, and (3) engagement of the developmentalist elite in importing and promotion of these practices. We argue that these three forces constitute a distinctive institutional context that endows imported practices with significant sociopolitical legitimacy starting from the very beginning of the diffusion process. This in turn generates an opportunity for the reproduction of the preexisting social stratification system, fueling early adoption by elite companies. Thus, while extant diffusion literature considers pressures or opportunities for attaining status and prestige through adoption as building up over time as the cumulative number of adopters grows, we argue that the elite companies engage in imported practice adoption early on to ‘store up and stabilize their prestige’ (Meyer, Reference Meyer, Czarniawska and Sevon1996: 245).
In order to further explicate the underlying mechanisms, we also directly hypothesize antecedents of the motivations for adoption. We consider sociopolitically driven legitimacy concerns together with two others that are often studied in diffusion research, namely social motivations that derive from cognitive legitimacy and economic motivations that relate to concerns such as efficiency or productivity. We specifically hypothesize how elite status or timing of adoption relates to these distinct motivations. As we expound salience of elite status, we further offer a direct test of the argument that elite companies are more likely to present themselves as model organizations, that is as an instance of what the institutional context holds dear.
We empirically test these hypotheses with data on TQM adoption by Turkish industrial companies. We use archival data collected for the period of 1985–1999 as well as questionnaire data from 176 companies which made it into the top 500 Turkish industrial companies list published in 1999 and run a series of regression analyses that allow us to explore covariates of timing, motivations, and self-promotion. Our observation window captures initial importing (which took place about the year 1985) as well as diffusion of TQM, which is especially conducive for testing our hypotheses. In order to test the hypothesis regarding the timing of adoption, both early and later adopters need to be observed. In addition, to test whether cognitive or sociopolitical legitimacy drives adoption, early adoptions need to be observed as the former arguably builds up with adoptions cumulating over time and late adoptions are less informative in this respect as cognitive legitimacy begins to plateau as adoptions cumulate. Findings reveal that elite companies are more likely to adopt TQM early on, self-report social motivations that are consonant with their status, and showcase TQM adoption through participation in prestigious contests. These findings underlie our contribution to diffusion research guided by the new institutional approach. Most importantly, while this approach typically emphasizes cognitive legitimacy, we show that legitimacy concerns underlying adoption of imported practices may be more sociopolitical in nature, reflecting the acceptance of organizations by key stakeholders such as the government or the general public as appropriate and right (see Aldrich & Fiol, Reference Aldrich and Fiol1994). Our work also demonstrates the usefulness of contextualized theorizing, which may also be fruitful for testing scope conditions of new institutional arguments addressing diffusion. We use the diffusion of TQM across Turkish companies as an instrumental case in order to gauge distinctive characteristics of institutional contexts underlying imported practice diffusion in late-industrializing countries.
Below, we first present our theoretical background and hypotheses, based on a discussion of the characteristics of imported practice diffusion in Turkey. Then, we describe our methodology, which is followed by a presentation of findings from empirical analyses. We finalize the paper with a discussion of the implications of our proposed model and findings, as well as scope conditions.
Theoretical Background and Hypotheses
Based on previous research, we propose that three forces constitute an institutional context that underlies the diffusion of imported practices within Turkey. The first is well-codified nature of imported practices. Earlier research addressing Turkey depicts imported practices that enjoyed widespread endorsement as well-codified ones. For instance, when the M-Form was imported to Turkey in the early 1960s, it had already become ‘public knowledge’ (Czarniawska & Joerges, Reference Czarniawska, Joerges, Czarniawska and Sevon1996: 44) thanks to books such as Drucker's ‘The Concept of Corporation’ published in 1946 and adopted by many prominent companies in the US and European countries (Mayer & Whittington, Reference Mayer and Whittington1999). Similarly, TQM's objectification was complete thanks to Ishikawa (Reference Ishikawa1985), Deming (Reference Deming1986), and Juran (Reference Juran1988) by the time it arrived Turkey. Diffusion of this practice across Turkish business organizations was not noticeable until around the time these publications emerged (Özen & Berkman, Reference Özen and Berkman2007).
What is depicted above for the Turkish case actually generalizes to many other practices that traveled across borders. Research usually points to a significant time lag between the emergence of practices in the source country and their transfer to the recipient ones. During this lag, practices diffuse across organizations in the former context and morph into ‘linguistic artifacts by a repetitive use in an unchanged form, as in the case of labels, metaphors, platitudes’ (Czarniawska & Joerges, Reference Czarniawska, Joerges, Czarniawska and Sevon1996: 32). Practices well-codified within source countries are stronger candidates for cross-national diffusion as ideas are easier to transfer when they assume a textual form. Indeed, Sahlin-Andersson and Engwall note that widely diffused management knowledge consists to a large extent of ‘well-packaged and labeled techniques or models that seem to travel easily between settings and spheres’ (2002: 19).
As such, imported practices probably enjoy greater legitimacy starting from the very beginning of their diffusion within recipient countries, even when they require subsequent translation or reembedding. Firstly, thanks to objectification, potential adopters within recipient countries can obtain extensive knowledge about these practices or can be more easily informed by global carriers or local mediators (Sahlin-Andersson & Engwall, Reference Sahlin-Andersson and Engwall2002). Thus, imported practices tend to be cognitively accessible, granting them cognitive legitimacy. Secondly, as these practices are objectified, conformity and enforcement pressures (Ansari, Fiss, & Zajac, Reference Ansari, Fiss and Zajac2010) associated with them tend to be relatively substantial even at earlier stages of diffusion within recipient countries. Therefore, adoption of imported practices is likely to be felt as a strong normative imperative, granting these practices sociopolitical legitimacy.
The second force that we highlight is the historical dependence of Turkey on early-industrialized countries for modern templates and the ensuing tendency toward emulation of practices originating from these countries. In the past 200 years or so, Turkey established its modern administrative and productive capacities based on knowledge and templates imported from early-industrialized ones rather than developing its indigenous ways of organizing (Ahmad, Reference Ahmad1993). Transfer of foreign templates has been accompanied with discourses concerning Modernization, Westernization, or National Development, all of which emphasize backwardness of the country vis-à-vis early-industrialized ones and the ensuing need for catching up with them, primarily by means of importing their technologies, policies, legal texts, organizational blueprints, and even manners. Thus, importing and adopting practices from early-industrialized countries have been felt as a normative imperative in Turkey due to relative backwardness of this country. In this respect, Turkey is an informative contrast to early-industrialized recipients (such as Austria) that boast developed economies and autochthonous institutions, which serve as bases for resistance to these practices (see Höllerer, Reference Höllerer2013).
Emulation of management practices from abroad entails infusing them with value beyond their function as technical or economic solutions to specific organizational or managerial problems. Widespread perception of imported practices as indispensable or ideal solutions to national or organizational problems grants individual practices what is called categorical legitimacy (see Rossman, Reference Rossman2014). Thus, Turkish organizations adopt imported management knowledge ‘not necessarily because of its inherent qualities’ (Kipping, Engwall, & Üsdiken, Reference Kipping, Engwall and Üsdiken2009: 12), but because it is deemed the appropriate way of reforming organizations. Consequently, any practice imported from early-industrialized countries arguably enjoys considerable sociopolitical legitimacy starting from the moment it is introduced to the Turkish context. For instance, Özen and Berkman's (Reference Özen and Berkman2007) qualitative findings regarding TQM indicate that this practice was introduced to Turkey as a means for solving country's age-old problems, such as national economic development and integration with the civilized world. As such, feelings of dependence rather than a willingness to address particular organizational problems underlie TQM's espousal.
The third force that underlies imported practice adoption in Turkey is the engagement of the elite in selection, promotion, and dissemination of these practices. In fact, discourses regarding dependence and how emulation of early-industrialized countries through importing of their practices resolves dependence-related problems are produced and communicated by the elite. Historically, the elite comprises the state and a class of private entrepreneurs who owe their existence to and derive their goals from the developmentalist agenda of the state. As the latter were created and sustained by supportive state policies (Özen & Berkman, Reference Özen and Berkman2007), they arguably carry a powerful imprint of national developmentalism, a political ideology that promulgates renewal of national institutions governing the economy, polity, and society in order to eliminate backwardness. There is some qualitative empirical evidence showing that contributing to economic and social development through borrowed knowledge is conceived as a social obligation by elite companies (i.e., companies owned or controlled by the elite) in Turkey, labeled ‘missionary organizations’ (Özen & Küskü, Reference Özen and Küskü2009). Thus, dependence, which endows imported practices with categorical legitimacy, is arguably more strongly felt by these organizations. This, in turn, culminates in efforts at promotion of imported practices through establishment of specialized associations (Erçek & İşeri-Say, Reference Erçek and İşeri-Say2009; Özen & Berkman, Reference Özen and Berkman2007; Üsdiken & Yıldırım-Öktem, Reference Üsdiken and Yıldırım-Öktem2008), conferences, training programs, mass media or magazines (Özen & Berkman, Reference Özen and Berkman2007), changes in laws and regulations (Özen, Reference Özen2015), or employing rhetoric that helps the practices resonate with what potential adopters already cherish (Özen, Reference Özen2015; Özen & Berkman, Reference Özen and Berkman2007). Thus, elite engagement results in further sociopolitical legitimation of specific imported practices.
Hypotheses: timing, motivations, and self-promotion
The constellation of three forces we depict above arguably constitute an institutional context underlying imported practice diffusion in Turkey that is substantially different from what is depicted for early-industrialized source countries. In the latter, the legitimacy of a practice typically builds up over time as the practice spreads from one organization to others and is mostly addressed as cognitive legitimacy (e.g., Tolbert & Zucker, Reference Tolbert and Zucker1983). In the Turkish context, thanks to prior codification, dependence, and elite involvement, imported practices enjoy considerable legitimacy starting from the earliest stages of their diffusion, which is predominantly sociopolitical in nature. Thus, imported practice diffusion in Turkey typically takes place in a conducive institutional context. Based on this conjecture, we take up two core themes from mainstream diffusion research addressing source countries, namely timing of adoption and the motivations driving adoption. Mainstream literature differentiates between innovators and laggards as to timing and between the economic and the social as to motivations (see Tolbert & Zucker, Reference Tolbert and Zucker1983). Based on these distinctions, this literature then offers competing frameworks as to whom innovators (or late adopters) are and the time-variant relevance of social and economic motivations (e.g., Kennedy& Fiss, Reference Kennedy and Fiss2009; Lounsbury, Reference Lounsbury2007; Tolbert & Zucker, Reference Tolbert and Zucker1983; Westphal, Gulati, & Shortell, Reference Westphal, Gulati and Shortell1997; Zbaracki, Reference Zbaracki1998). Below, we reconsider these themes in the light of distinctiveness of the institutional context underlying imported practice diffusion in Turkey.
Timing of adoption
In the source country, early adopters of a practice are labeled as innovators (Chandler, Reference Chandler1962). Extant literature contains two competing models addressing who the innovators are. According to one, innovators are organizations with greater relational, technological, or financial resources that support practice innovation (e.g., Greenwood & Suddaby, Reference Greenwood and Suddaby2006). These organizations occupy the center of a field or industry, continuously monitor each other, and usually share a common culture, which fuel the quick spread of a practice among them through mimicry (ONeill, Pouder, & Buchholtz, Reference ONeill, Pouder and Buchholtz1998). According to an alternative model, practice innovation comes from the ‘fringes of an interorganizational field’ (Leblebici, Salancik, Copay, & King, Reference Leblebici, Salancik, Copay and King1991: 358) hosting the relatively powerless, peripheral actors not bound by conventions of the field and thus with greater willingness to experiment with new practices. The more central organizations may eventually adopt these practices, leading to field-level change (Leblebici et al., Reference Leblebici, Salancik, Copay and King1991), but tend not to be the innovators or early adopters.
In Turkey, there is a similar distinction between elite companies and the nonelite ones. Whereas this distinction is invoked in diffusion literature to distinguish the largest or the most successful ones from others (e.g., Greenwood & Suddaby, Reference Greenwood and Suddaby2006), in Turkey it is predominantly a matter of status that derives from the association with developmentalism. As such, companies that are historical products of the developmentalist project and imprinted with the goal of contributing to national economic wellbeing, that is organizations controlled by the elite, constitute the high-status organizations in Turkey. Elite's business association, named TÜSİAD (The Turkish Industry and Business Association), was established in 1971. Founders were 12 industrialists, many of whom have been so successful that their companies now dominate the business landscape in Turkey in many respects. The founding protocol cosigned by these industrialists made explicit reference to development, democratization, and Westernization (Buğra, Reference Buğra1998). Consequently, the defense of the elite status against the nonelite typically entailed being a forerunner in adopting modern economic and political templates that originate from developed parts of the world. In this respect, TÜSİAD has led both economic and political initiatives, such as the establishment of a quality association known as KALDER or supporting EU membership, remaining true to its original mandate (Erçek & İşeri-Say, Reference Erçek and İşeri-Say2009; Özen, Reference Özen2015; Özen & Berkman, Reference Özen and Berkman2007). Also, organizations controlled by the elite have put themselves forward as general models that are progressive and rational. By both adopting modern practices and enthusiastically disseminating them to other organizations, they enhanced and stabilized their status as well as that of those who control them (Meyer, Reference Meyer, Czarniawska and Sevon1996: 245). For instance, Koç Group, which is one of the largest private business groups in Turkey, emphasized a desire to lead other Turkish companies by being a role model pioneering adoption of modern practices such as the holding structure (Özen, Reference Özen2015).
TÜSİAD grew in size over time and experienced an increasingly diverse membership. Nevertheless, its founding fathers never let go their control over this organization: majority of the leaders of this organization up to know have been either one of the founders or their successors (mostly, younger members of their family), who arguably helped with the continuation of the developmentalist imprint. Therefore, we believe it is the set of companies controlled by these people that have the strongest status concerns. In this respect, they have the most to gain from adopting imported practices earlier on. In contrast, nonelite organizations in Turkey have not acquired a missionary identity and therefore have no strong status concerns that drive early adoption of modern practices. Thus, they are less likely to be among the early adopters. However, under the normative pressure created by early adopting elite companies, they may adopt imported practices at later stages of the diffusion process. Hence, we hypothesize:
Hypothesis 1 Elite companies adopt imported practices earlier than nonelite ones.
Motivations for adoption
Diffusion literature distinguishes between social and economic motivations. The former concerns legitimacy gains from adopting a practice and the latter is about solving some organizational problem which is more technical in nature, such as improving efficiency or productivity. Literature also associates these motivations with timing. Initial formulations conceived economic motivations as preceding social ones: what is started by innovators as solutions to technical problems becomes a social imperative over time as the number of adopters grow (Tolbert & Zucker, Reference Tolbert and Zucker1983; Westphal, Gulati, & Shortell, Reference Westphal, Gulati and Shortell1997; Westphal & Zajac, Reference Westphal and Zajac1994). Though later formulations emphasized concurrent relevance of these motivations or even reversal of the initially conceived pattern (e.g., Hwang, Jang, & Park, Reference Hwang, Jang, Park, Drori, Höllerer and Walgenbach2014; Kennedy & Fiss, Reference Kennedy and Fiss2009; Lounsbury, Reference Lounsbury2007; Özen, Reference Özen2001; Zbaracki, Reference Zbaracki1998), literature considers both economic and social motivations as significant.
In contrast to received wisdom, we claim that a particular kind of social motivation characterizes the diffusion of imported practices in Turkey and that economic motivations, though important, have little explanatory power as they vary little across elite and other companies. Firstly, due to the institutional context within which diffusion of imported practices takes place, the type of motivation that meaningfully varies between adopters is arguably sociopolitical in nature. Legitimacy of an imported practice derives from the association of the practice with developmentalism: adoption is a means for serving modernization and development of Turkey. However, that tends to be a prerogative of elite companies and only weakly endorsed by nonelite ones. The elite actively promote imported practices and their companies adopt them so that they can claim having fulfilled their moral obligation and consequently legitimize themselves in the eyes of external as well as internal stakeholders. For instance, elite companies in Turkey have frequently justified their adoption of modern practices, such as the holding structure or TQM, by emphasizing that their adoption would contribute to the further development and modernization of the country (Özen, Reference Özen2015; Özen & Berkman, Reference Özen and Berkman2007). Thus, we hypothesize:
Hypothesis 2 Elite adopters are more likely to report legitimacy concerns that are sociopolitical in nature.
So, social motivations for adoption in Turkey are not based on following the example set by earlier adopters as argued in diffusion literature. In source countries, a novel practice typically lacks cognitive legitimacy, which means there is little widespread understanding of what it is or useful for. As it diffuses across organizations, it gradually becomes taken-for-granted and organizations begin adopting it without questioning whatever virtues it is believed to have. However, in Turkey, importing of a practice is coupled with intensive efforts at promotion, which probably succeed quickly not simply because the elite mobilize their resources for this purpose but also because the practice in question is already codified. Thus, cognitive legitimacy of imported practices is arguably resolved in Turkey early on, and as elite efforts at promotion are directed toward all organizations (not simply the elite controlled ones), we expect this particular type of social motivation not to vary among adopters. As such, we also do not consider early or late adoption (i.e., adoption when there were few or many prior adopters) as consequential with respect to social motivations for adoption, which is not the case for mainstream diffusion research which conceives social pressures for adoption as building up over time as the number of prior adopters increase. Based on these arguments, we hypothesize that:
Hypothesis 3 Elite adopters do not differ from nonelite ones with respect to legitimacy concerns that are cognitive in nature.
We also argue that economic motivations will have limited variance across elite controlled and other adopters in Turkey for two reasons. Firstly, as elite companies are more strongly driven by sociopolitical concerns, they will tend to adopt the practice without questioning its economic benefits or without experimenting with it to see in what form it actually contributes to solving problems that are technical in nature. Thus, adoption by the elite may be accompanied with economic benefits as well as their absence. Secondly, as imported practices are well codified and promoted by the elite, knowledge regarding their economic benefits may be more taken-for-granted (as preached in the books) than actually calculated or experienced. Thus, being subjected to the same discourse regarding the practice, both elite companies and others may report equally strong economic motivations. Thus, we hypothesize:
Hypothesis 4 Elite and nonelite adopters report similar levels of economic motivations.
Self-promotion as the model organization
Primacy of social motivations is especially apparent when organizational involvement in imported practices goes beyond implementation to include what is called institutional work (Lawrence, Suddaby, & Leca, Reference Lawrence, Suddaby and Leca2009). Research on Turkey reveals that elite companies in Turkey may act like social movement organizations (Erçek & İşeri-Say, Reference Erçek and İşeri-Say2009; Özen & Berkman, Reference Özen and Berkman2007) to promote imported practices. This serves attaining symbolic goals (Voronov & Vince, Reference Voronov and Vince2012), such as affirming the elite project as well as presenting the organization as a general model (Meyer, Reference Meyer, Czarniawska and Sevon1996) to others, which assists attaining status. As a way of presenting themselves as ‘the model’ organization, elite companies in Turkey have often publicized their TQM implementation through the mass-media, and frequently participated in national or international quality contests, which is usually not the case for other adopters (Özen, Reference Özen2001). Therefore, we hypothesize that:
Hypothesis 5 Elite companies are more likely than nonelite ones to capitalize on the opportunity to present themselves as model organizations.
Methodology
Sample and data
In order to test these hypotheses, we analyze the diffusion of TQM across Turkish business organizations. We use questionnaire data as well as data from archival sources. The questionnaire was sent in 1999 to all companies listed in the so-called ISO 500 list published in that year. ISO 500 is an annually updated list maintained by Istanbul Chamber of Industry (Istanbul Sanayi Odası – ISO), providing information about the largest 500 industrial enterprises in Turkey. The list is based on the ranking of companies with respect to their sales. Slightly above a third of these companies responded, resulting in data from 176 organizations. A variety of industries are represented in our sample, which contains publicly owned companies (about 10%) as well as private ones; companies with foreign shareholders (about 30%) as well as those owned by local shareholders only; elite companies (15%) as well as nonelite ones.
By 1999, TQM had become a well-known imported management practice in Turkey, with a history slightly longer than a decade. About 61% of the companies in our sample reported that they were either planning for or already engaged in its implementation as of 1999. Thus, our observation period is especially conducive for capturing early-stage forces and their outcomes that we address in our hypotheses. Companies responded to our survey items regarding their organizational characteristics and engagement with TQM. The latter group comprises questions as to when the company initiated its engagement with TQM, as well its motivations and implementation patterns.
Due to limitations posed by the cross-sectional and retrospective nature of data generated by questionnaire administration, we also used archival sources (mainly, annual editions of ISO 500 listings) to code additional information about companies in our sample. Use of archival sources was guided mainly by our analyses regarding the timing of adoption. According to questionnaire responses, the earliest TQM adoption took place in 1985. Thus, we assumed that the practice was first introduced to Turkey in 1985 and all companies in our sample were considered to be at risk of adoption from that year onwards (those established after 1985 were considered at risk of adoption from the year of their founding onwards). All companies were observed annually, until the year they adopted TQM or the year of questionnaire administration, if they did not adopt TQM during the observation window. Thus, we used archival sources to code information about companies in our sample through the years when they were at risk of adoption. We made use of this longitudinal data set with 1,792 observations in order to test our first and fifth hypotheses. The other hypotheses were tested using cross-sectional data on 108 companies that adopted TQM.
Variables
The dependent variable used for testing Hypothesis 1 is the hazard of TQM adoption (i.e., probability of adoption in a year given adoption did not take place earlier). This rate pertains to how early adoption of TQM took place. The exact point in time when this event took place was reported by our informants as they responded to the questionnaire. For each company in our sample, we kept a record of time and event status (whether TQM adoption took place) for all the years when the company was at risk of TQM adoption. A similar hazard rate serves as the dependent variable for the test of Hypothesis 5. This time, the event of interest is TQM adoption that eventually culminated in an application to the quality prize contest hosted by KALDER, an association for promoting quality initiatives. KALDER was established in 1990 by quality professionals and top executives of elite companies and backed by TÜSİAD in order to disseminate TQM in Turkey (Erçek & İşeri-Say, Reference Erçek and İşeri-Say2009; Özen & Berkman, Reference Özen and Berkman2007).
In order to test Hypotheses 2–4, we use scores from multi-item self-report scales measuring sociopolitically driven social motivations, cognitively-driven social motivations, and economic motivations, respectively (see Appendix for the scales). Sociopolitical legitimacy concerns were captured using three items that measure the extent to which national development was emphasized in explaining TQM adoption to employees of the company, the extent to which image of the company was considered, and the extent to which elite associations' (such as TÜSİAD's) guidance was influential. Thus, this scale measures the extent to which the adopter was motivated by sociopolitical legitimacy vis-à-vis internal and external stakeholders. We averaged scores from the three items of this formative scale to arrive at a composite measure of sociopolitically driven social motivations. Social motivations that were more cognitive in nature were measured using another three-item formative scale. Items of this scale measured the extent to which consulting firms, earlier adoptions, and the knowledge that TQM is associated with organizational success were influential in the adoption decision. Once again, we averaged scores from these items to arrive at a composite measure of cognitively driven social motivations. Finally, our measure of economic motivations is a four-item formative scale, capturing the extent to which efficiency, product quality, labor productivity, and cost reduction were concerns during adoption. An average of these four items serves as our economic motivation variable in analyses. We used a 4-point response scale for all items, whose scores range between zero and three, higher scores indicating stronger motivations. As our motivation scales are formative (their items form the scale rather than reflecting a common theme and are not interchangeable) we do not make or test any assumptions regarding the patterns of intercorrelation between their items (see Coltman, Devinney, Midgley, & Venaik, Reference Coltman, Devinney, Midgley and Venaik2008).
Our independent variable is elite status, which is a binary coded variable capturing whether the company is controlled by one of the founders of TÜSİAD or descendants of this person. We also use a common set of control variables in all analyses. One of these variables measures the total number of prior adoptions, which also captures the timing of adoption (i.e., we consider an adoption that took place when there were few adopters as early adoption and the one that took place when there were many adopters as late adoption). In tests of Hypotheses 1 and 5, this is a time-variant variable that counts the number of prior adoptions in the year in which the company was at risk of adoption. In others, it counts the number of prior adoptions as of the time of adoption. We also include its squared term (which is rescaled by dividing it by 100) in analyses to account for a potentially curvilinear relationship between this variable and the dependent variables. We include this variable to make sure we do not confound elite companies' status concerns with bandwagon effects (i.e., to ascertain these companies were not simply reacting to earlier adopters). We measure several pertinent company characteristics, namely company age, sales (in million Turkish liras, corrected for inflation), exports (in thousand US dollars), all of which are naturally logged. We also use return on assets, public and foreign ownership ratios, whether the company is using assembly technology (a dummy coded ‘1’ for those using assembly technology), and the ratio of sales to the number of employees as control variables. In longitudinal (survival) analyses, time-variant control variables (i.e., all other than assembly dummy) were lagged 1 year. In other analyses, control variables were measured in the year preceding adoption of TQM.
Analyses and estimation
Because about two-thirds of the companies that made it into ISO 500 list published in 1999 did not respond, we first ran a binary logistic regression analysis with a dummy-coded dependent variable (coded ‘1’ for those that responded to the survey and zero for others), and elite status, sales, shareholder equity, assets, net profit, exports, number of employees, public share, and foreign share as predictors. Predictor variables other than elite status are all available in ISO 500 1999 listing. We used the findings from this analysis to gauge if respondents differed significantly from nonrespondents. In order to test Hypotheses 1 and 5, we use parametric survival models with exponential survival distribution. We test other hypotheses by using seemingly unrelated regression (we test a single model in which the same set of predictors are associated with multiple dependent variables). Social and economic motivations may be correlated, and therefore, it may be more appropriate to obtain coefficients for their predictors by including these variables in the same system of equations (in which errors of regression equations are allowed to correlate) rather than in separate equations. This also decreases the number of regressions we run to predict different dependent variables with the same set of predictors.
Results
Our initial (binary logistic regression) analysis to uncover whether responding companies were different from others on several observed characteristics yielded no significant coefficients and an insignificant model (results not reported here). Though these companies may be different with respect to unobserved characteristics, we have evidence suggesting minimal sampling bias due to self-selection based on observed ones. Table 1 presents correlations between predictors. Values below the diagonal report correlations from longitudinal data, whereas those above report correlations from cross-sectional data.
Table 1. Correlations between predictor variables
Table 2 presents findings from survival analysis testing Hypothesis 1. Model 1 contains the control variables including the number of prior adopters to account for possible bandwagon effects. Findings from this model reveal that as the number of prior adopters increased, the rate of adoption also increased (β = .063, p < .001), although the impact of one-unit increase in the number of prior adopters was smaller when they were already more numerous, as indicated by the negative coefficient for the squared term (β = −.044, p < .001). Model 2 additionally incorporates elite status as the independent variable and tests Hypothesis 1. The coefficient for this variable (β = .594, p < .05) indicates that elite companies adopted TQM earlier. The hazard of TQM adoption was on average about 81% (e 594–1 = .809) higher for the elite companies, lending support to Hypothesis 1. As we have only one variable capturing between-industry difference (i.e., whether the organization is using an assembly technology), we rerun Model 3 as what is called a shared frailty model (results not reported here), allowing for a random parameter that controls for unobserved variability between the 10 two-digit industries in our sample. This model turned out a nonsignificant value for the shared frailty variable and parameter estimates were practically unchanged.
Table 2. Survival (exponential regression) analysis of TQM adoption
Note: Numbers in parentheses are standard errors.
*p < .05; **p < .001; ***p < .001.
Table 3 presents findings from seemingly unrelated regression analyses of social and economic motivations. We tested two models, one with control variables only (Model 3) and another with the independent variable as well (Model 4). Both models contain all three motivational dependent variables (namely, sociopolitical legitimacy, cognitive legitimacy, and economic motivations) and therefore there are three columns for each model in Table 3, organized with respect to dependent variables for ease of interpretation. Results from Model 3 show that the total number of prior adopters is not significantly related to any of the self-reported motivations. Thus, the timing of adoption itself does not seem to be related to social or economic motivations. However, estimates from Model 4 suggest a significantly positive relationship between elite status and sociopolitical legitimacy concerns (β = .461, p < .05), supporting Hypothesis 2. Social motivation score for the elite companies was .461 higher than the average for others. Considering the average social motivation reported by all adopters (the unconditional mean) is 1.346, our empirical finding indicates a substantial difference between elite companies and the rest (1.686 vs. 1.282, with elite companies reporting approximately 32% stronger motivation). Estimates from Model 4 suggest no relationship between elite status and cognitive legitimacy concerns or economic motivations, supporting H3 and H4, respectively. We would like to reiterate that these findings do not mean cognitive legitimacy or economic concerns were not important. They just show that they did not vary across elite and nonelite companies.
Table 3. Seemingly unrelated regression analysis of social and economic motivations
Note: Numbers in parentheses are standard errors.
*p < .05; **p < .001; ***p < .001.
Table 4 presents findings from survival analysis of TQM adoption that eventually culminated in an application to KALDER's award program. In this analysis, adoptions of TQM that did not result in an application for KALDER's award were disregarded as events, decreasing the event count from 81 to 13. Model 5 shows that timing of adoption (the cumulative number of adopters) is not a statistically significant predictor of the hazard of application for this award. However, findings from Model 6 show that elite status is a significant predictor of adoption for showcasing purposes (β = 1.520, p < .05). Elite companies were about 360% more likely (e 1.520–1 = 3.573) to engage in TQM that was exhibited in a contest for prestige. This finding provides support for Hypothesis 5. Once again, a shared frailty model (results not reported here) allowing for between-industry unobserved heterogeneity produced almost the same results.
Table 4. Survival (exponential regression) analysis of TQM adoption that culminated in KALDER application
Note: Numbers in parentheses are standard errors.
*p < .05; **p < .001; ***p < .001.
As to our control variables, all of which are at the company level, it is interesting to note that they rarely figure as significant predictors of our dependent variables. Thus, at least with regards to the adoption of TQM in Turkey and the motivations for doing so, company characteristics generally seem to be weak antecedents. Exceptions are assembly technology predicting the timing of adoption (companies using this technology adopted TQM earlier than others) and public ownership predicting social motivations that are cognitive in nature, and economic motivations (as public ownership ratio increased, the former increased and the latter decreased). We consider this as further evidence that technical explanations referencing company needs or strategies are perhaps less relevant for our case.
Discussion
Our study contributes to diffusion research guided by the new institutional approach in two respects: (1) we expand existing models that address diffusion of a practice across organizations in the source country and consequently may have limited applicability to diffusion in a late-industrializing recipient like Turkey; (2) we reveal that legitimacy concerns underlying adoption of imported practices may be more sociopolitical in nature rather than being driven by earlier adoption decisions by peers as suggested by arguments based on new institutionalism.
Firstly, this paper highlights three important forces underlying the diffusion of imported practices across organizations in Turkey. As the constellation of these forces may be more characteristic of this country as well as some other late-industrializing recipients, models describing diffusion in these contexts should diverge from those addressing source countries, and perhaps also recipients that are early-industrialized countries. We argue that dependence coupled with elite engagement and advanced codification generates significant sociopolitical legitimacy for imported practices in Turkey. Therefore, adoption or implementation is less a matter of whether these practices actually solve any practical organizational problems or have beneficial financial consequences. It is also less a matter of whether there is a fit between organizational characteristics and the imported practice (cf. Ansari, Fiss, and Zajac, Reference Ansari, Fiss and Zajac2010). For instance, findings from empirical analyses reported in this paper usually indicate no relationship between organizational characteristics and adoption patterns. But what systematically appears as the underlying mechanism is the strength of normative pressure felt for adoption, or showcasing adoption. Our empirical findings reveal that elite companies in Turkey that are more likely to feel adoption as moral imperative, as documented in earlier qualitative work (e.g., Özen and Berkman, Reference Özen and Berkman2007), were more likely to adopt early on, and showcase adoption.
Perhaps, due to primacy of normative pressures facilitating adoption, resistance to importing of foreign practices in late-industrializing countries that Turkey exemplifies will be weaker compared to that in early-industrialized recipients, to which our arguments in this paper may not generalize. Developed recipients are more likely to have indigenous or autochthonous institutions (Höllerer, Reference Höllerer2013) guarded by their elites. This means, they are less likely to experience dependence, have weaker tendencies toward perceiving others as superior, and weaker reasons for emulating them. Rather, as the elite's power stems from the constellation of indigenous institutions, they will be jealously guarded and imported practices will be resisted. So, these countries may be more likely to observe the opposite pattern, that is, elite expressing discontent with imported practices from the very beginning of the diffusion process onwards (e.g., Höllerer, Reference Höllerer2013).
Thus, this paper suggests that the macro-political or economic structure should be considered while examining how practices are imported from other countries and how they diffuse in recipient contexts, with an eye on differences between early- and late-industrialized recipients. Extant cross-national diffusion research (e.g., Jack & Westwood, Reference Jack and Westwood2009; Kipping, Engwall, & Üsdiken, Reference Kipping, Engwall and Üsdiken2009; Zeitlin & Herrigel, Reference Zeitlin and Herrigel2000) often alludes to concepts such as cross-national dependence, emulation, and center-periphery borrowed from world society (Krücken & Drori, Reference Krücken and Drori2009) and world systems (Wallerstein, Reference Wallerstein1974) perspectives. However, these studies do not focus on how these macro-structural factors shape the diffusion of imported practices across organizations in recipient countries. The Turkish case is informative in that respect. This late-industrializing country characterized by the legacy of developmentalism and modernizing ideology is enlightening with respect to relative social positions of organizational actors (i.e., elite status), their identities (i.e., missionary and nonmissionary), and the meanings they attach to the practice imported from abroad. It is this duality and associated identities that make emulation of modern practices and elite engagement influential factors, which in turn result in strong initial sociopolitical support for the adoption of imported practices, which shapes motivations for adoption. Above all, the Turkish case implies that in such a late-industrializing country where mimicry of the developed world is perceived as a prerequisite for modernization and development, importing a managerial practice from the early-industrialized world itself has symbolic value, regardless of its technical value (see Özen, Reference Özen2015). In other words, it is itself an institutionalized, that is, logically and morally appropriate behavior, which endows imported practices with categorical legitimacy, and enhances the status of elite organizations that tend to be early adopters.
Secondly, this paper highlights sociopolitical legitimacy as a driver and status as an outcome of practice adoption. Extant diffusion literature usually focuses on cognitive legitimacy forcing late-adopters to become isomorphic with early-adopters. However, the Turkish case indicates that elite organizations adopt imported practices earlier in order to enhance their status by becoming distinct from other organizations, that is, by fulfilling their moral obligation to modernize the nation. Hence the empirical findings that consistently point to divergence in the timing of and motivations for adoption across elite and nonelite companies. This implies that for early adopters within the recipient country, legitimacy derives primarily from factors exogenous to diffusion (i.e., elite identity), whereas it is endogenous to diffusion in the source context (i.e., driven by prior adoptions). Thus, the utility of the distinction between early- and late-adopters that guides research in source contexts may have limited relevance in countries like Turkey. In the latter context, time of adoption is not in and of itself a driver of underlying mechanisms such as pressures for mimicking peers or learning from the experiences of others. Rather, both the timing of adoption and the status concerns are driven by the same factor, namely elite status.
Conclusion
As our concluding remarks, we would like to surmise generalizability of our arguments to other recipient countries or to practices other than TQM. We believe our framework generalizes particularly to late-industrializing recipients rather than early-industrialized ones. However, ‘late-industrializing’ is a broad category with many countries that differ with respect to their polities, social structures, and relations with the Western world, all of which are also dynamic. Therefore, we think that our framework would have more explanatory power for those late-industrializing countries with a similar institutional context underlying diffusion, most importantly dominance of developmentalist ideology, feelings of dependence, and engagement of an elite uniformly endorsing the developmentalist mandate. Based on available studies, South Korea seems to be the most obvious example to which our framework can be applicable due to its state-organized business system, elite structure, and the state–business relations (Buğra & Üsdiken, Reference Buğra and Üsdiken1995; Whitley, Reference Whitley1992). May be due to these similarities, findings regarding the diffusion of ISO standards among Korean companies (Hwang, Jang, & Park, Reference Hwang, Jang, Park, Drori, Höllerer and Walgenbach2014) are similar to what Özen (Reference Özen2002) and Erçek (Reference Erçek2014) report regarding the diffusion of TQM in Turkey. Hwang, Jang, and Park (Reference Hwang, Jang, Park, Drori, Höllerer and Walgenbach2014) show that elite Korean companies affiliated with chaebols were early adopters of ISO certificate. Through adoption, they were willing to signal their position in society and were motivated primarily by social concerns. Similarly, Bae, Chen, and Rowley (Reference Bae, Chen and Rowley2011) report strong emulation of the US type HRM, which was perceived as an embodiment of universally acceptable norms, as well as elite engagement in its diffusion in South Korea and Taiwan.
As to generalizability of our arguments to imported practices other than TQM, we do not argue that all imported policies or practices would be unquestioningly welcome by actors in these countries. For example, Halliday and Carruthers (Reference Halliday and Carruthers2009) report that national policymakers in China, Indonesia, and Korea contested and negotiated against norms of corporate bankruptcy law developed by global actors such as the IMF, World Bank, the UN, and international professional associations. Korean chaebols further intensified family control despite governmental and international pressures to relinquish family control and corporate rule for more professionalization of their management (Tsui-Auch & Lee, Reference Tsui-Auch and Lee2003). A similar resistance to the professionalization of boards by increasing the ratio of ‘outsider’ members was also observed among Turkish family business groups despite the lip service they paid to corporate governance under the normative pressures by TÜSİAD circle and the Capital Markets Board of Turkey (Üsdiken & Yıldırım-Öktem, Reference Üsdiken and Yıldırım-Öktem2008). Moreover, centralized family control is also a stable characteristic of business groups in Turkey independent from organizational size and age, implying that it resists political and economic changes toward a more liberal system (Gökşen & Üsdiken, Reference Gökşen and Üsdiken2001). These observations perhaps highlight that when imported practices challenge the interests of dominant social groups such as business elites, they are more likely to be contested or rejected. Whether and to what extent imported practices are filtered by local political and power constellations (Fiss & Zajac, Reference Fiss and Zajac2004) need to be incorporated into explanatory models like ours. Relatedly, although elite engagement in cross-national transfer of management practices is often acknowledged (Djelic, Reference Djelic2004; Fiss & Zajac, Reference Fiss and Zajac2004; Hwang, Jang, & Park, Reference Hwang, Jang, Park, Drori, Höllerer and Walgenbach2014), conceptual or empirical work usually glosses over when legitimation or delegitimation by the elite is more likely, whether elite size, structure, and cohesiveness matter for adoption.
Şükrü Özen is a Professor of Organization Theory at the Management Department, Izmir University of Economics, Izmir. His main research interests are new institutional theory, cross-national diffusion and translation of management knowledge, environmental conflicts, and discursive action. His articles have appeared on the journals Organization Studies, Organization, Journal of Business Ethics, Organization & Environment, Socio-Economic Review, and Journal of Management Studies.
Çetin Önder is a Professor of Management and Organizations at the Management Department, Social Sciences University of Ankara, Ankara. He is currently interested in how institutional change shapes organizational collectivities or professional actors, focusing on the interaction between institutional mandates and local circumstances of actors. His research has been published in journals like Leadership Quarterly, Industry and Innovation, Higher Education, and Scientometrics.
Appendix
Sociopolitically-driven Social Motivations Scale
Cognitively-driven Social Motivations Scale
Economic Motivations Scale
