Informal, formal or hybrid – how expatriates in European MNC subsidiaries in South Korea manage hierarchy to enhance organizational agility

Sven Horak, Cuiling Jiang and Marion Festing

International Journal of Manpower, 2025, vol. 46, issue 6, 1023-1048

Abstract: PurposeWe examine managerial practices in South Korean subsidiaries of European Multinational Companies (MNCs) to understand how they navigate hierarchical structures during organizational transitions. Using an institutional lens, we explore the nature of hierarchy and how various types of hierarchy interplay in fostering agile organizational structures.Design/methodology/approachThis study employs a qualitative research design based on 32 in-depth interviews with expatriates in top- and middle-management positions in European subsidiaries in South Korea.FindingsOur results suggest that organizational hierarchy should not be conceptualized solely as a formal structure. Instead, organizational hierarchy, as part of an institution, can simultaneously encompass both formal and informal elements. These hierarchies interact dynamically, with hybridization occurring across a continuum. Hence, we propose classifying organizational hierarchy as a hybrid institution.Originality/valueResearch has highlighted a knowledge gap in understanding informal institutions and their interaction with formal institutions in organizational hierarchies. Our study reveals that informal institutions may reinforce hierarchies aligned with societal norms while destabilizing those that diverge from them, leading to both functional and dysfunctional outcomes.

Keywords: Organizational hierarchy; Change management; Social hierarchy; Cross-cultural management; Formal institution; Informal institution; Hybrid institution; Agile organization; MNC subsidiary (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijmpps:ijm-03-2024-0155

DOI: 10.1108/IJM-03-2024-0155

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