Dual Embeddedness: A Sociological approach of Transnational Firms

The transnational restructuring of economic activities following the economic crises of the 1970s (often referred to as economic globalization) was accompanied by the restructuring of their governance structures, both on the transnational and the national level. One of the most salient developments in this regard is the increasingly dominant role of private businesses. Given the variety of domains affected - economy, politics, civil society -, this development calls for an interdisciplinary debate on the models used to study these corporate actors. The present-day literature on transnational firms primarily consists of political and economic approaches, but both suffer from various shortcomings and do not provide a convincing overarching framework that does justice to the complexity of these firms and the multiple environments in which they operate. Based on field theory and the notions of embeddedness and interdependence, the author contributes to a sociological approach of transnational firms that does justice to the political and cultural character of these firms and the environments in which they operate. Transnational firms are embedded in both national economic fields and the transnational economic field, and they need to adapt their corporate policies to the conditions of these fields in order to obtain and sustain a dominant position and assure their continuity, which is their ultimate goal. The significance of the various fields varies across domains (finance, labor, production, etc), but, in general, it can be argued that in recent decades, firms experienced an increasing transnational and a decreasing national dependence, and were, therefore, forced to adapt their corporate policies to the conditions of the transnational economic field. The transnational and national economic fields consist of corporate actors, but also of any non-corporate actor with an interest in the field, such as regulating bodies, trade unions, universities, research centers, and financial institutions.