Contributions published at Foundations of Business Administration and Theories of the Firm (Andreas Scherer)

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Based on an in-depth, qualitative case study about a conflict between governmental authorities from the United States and Switzerland over the regulation of Swiss banks, we introduce indirect compellence as a novel triadic and indirect mechanism through which coercion leads to institutional change. Hostage-taking being a prototypical example, indirect compellence is typified by a coercive actor who takes a third party hostage to gain influence over a targeted actor. In our case, it meant that U.S. authorities (coercers) compelled Swiss policy makers (targets) to erode the famed Swiss banking secrecy rules by threatening the targets to otherwise enforce U.S. law extraterritorially against Swiss banks and bankers (hostages). Our constructivist and target-centered perspective explains this type of coercive pressure in detail, and it also suggests that targeted policy makers judge and respond to it contingent on their political ideologies. Our study contributes to research on power and influence in institutional environments and to research on global business regulation and transnational governance. Most generally, it also expands scholarly understanding of triadic relationships. In contrast to Simmelian perspectives’ focus on triads in which the third party is in a powerful brokerage position and frequently benefits as a tertius gaudens, our study suggests that the third party can also become a rather powerless tertius miserabilis who suffers rather than benefits from others’ conflict.

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We conducted a longitudinal case study about the United States (U.S.) electronic vehicle manufacturer Tesla and its spokesperson Elon Musk to investigate how organizations can maintain organizational legitimacy through organizational impression management among a heterogeneous audience, as exemplified by the ideologically polarized U.S. media landscape. We uncovered that Tesla’s spokesperson, Elon Musk, mobilized two different types of what we refer to as ‘robust organizational impression management’ (i.e., chameleon and diplomacy strategies). The ‘chameleon strategy’ portrays Tesla as ideologically open and appeals to different, highly polarized audience demands, while the ‘diplomacy stratgy’ places Tesla in a diplomatic role that serves to de-polarize how the audience views the organization. Together, these strategies enabled Musk to both retain Tesla’s good relations with the leftwing media and to simultaneously reduce its illegitimacy among the rightwing media outlets. In this way, Tesla maintained its legitimacy among a highly heterogeneous audience. Our study contributes to the literatures on organizational legitimation, organizational impression management, robust action, and political ideology.

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