Acting Globally but Thinking Locally? The Enduring Influence of Local Communities on Organizations

We develop an institutionally oriented theory of how and why local communities continue to matter for organizations in a global age. Since globalization has taken center stage in both practitioner and academic circles, research has shifted away from understanding effects of local factors. Our approach runs counter to the idea that globalization is a homogeneity-producing process, and to the view that society is moving from particularism to universalism. We argue that with globalization, not only has the local remained important, but in many ways local particularities have become more visible and salient. We unpack the market, regulative, social, and cultural mechanisms that result in this enduring community influence while reviewing classic and contemporary research from organizational theory, sociology, and economics that have focused on geographic influences on organizations. In this paper, our aim is to redirect theoretical and empirical attention back to understanding the determinants and importance of local influences. We suggest that because organizations are simultaneously embedded in geographic communities and organizational fields, by accounting for both of these areas, researchers will better understand isomorphism and change dynamics.