My interest in identity stems from my personal background. Born into a Serbo-Slovenian family in a country that fell horribly apart in the 1990s (Yugoslavia) by failing to create a supra-national identity, I grew up in Slovenia within the transitional bloc of (subsequently) new EU member states. Having lived in the U.S., China, and now in Aotearoa New Zealand, I feel more like a global nomad than a Slovenian or an EU citizen. In Aotearoa New Zealand, I fall into the European immigrant category, according to official statistics. Among the indigenous Māori, I am simply Pākehā (a white European). The latter carries a profound burden of colonial history, which is why I emphasize my East Europeanness. Born in the 1980s, I am a millennial, likely to be the first generation to live significantly worse than my single Baby boomer mother. Being gay, I am part of an invisible and often silent LGBTQIA+ minority which intersects other social categories. My Chinese partner calls me an “boiled egg” – “white” on the outside, but “yellow” on the inside. Figure 1 uses my example and illustrates some of the most common types of social categories underpinning social identity theory, which motivate my examination of social identity theory and its importance to IB research and managerial practice. In this article, I first revisit the concept of social identity and make a clear distinction between identity theory (IT) and social identity theory (SIT). I provide a bird’s eye overview of their use within the existing IB literature and follow up with some probing questions to help guide IB research, inform managerial thinking and support business practice.
Social identity theory (SIT) emerged from the European school of social psychology. It is a meta-theory of intergroup relations (determined by social categorization) and the evaluative processes of self (determined by self-categorization). It is based on various group-defining attributes, creating relevant social categories, which emerge through social interactionism within and between various types of social groups (Hogg, Abrams, Otten, & Hinkle, 2004).
Sociologists and social psychologists have been primarily interested in how people find significance and sense of belonging through social group membership, which also influences how individuals and groups behave and interact with others based on such memberships. On the contrary, the management literature and business practice have not paid too much attention to social identity - at least not much beyond organizational identification, in-group/out-group membership classifications linked to politics of power within organizations (Vaara, Tienari, & Koveshnikov, 2019) or manifested through peoples’ behavior (e.g., consumer ethnocentrism, stereotyping).
As we expand our narrow understanding of globalisation from economic and political interdependence among nations, to address a more complex interdependence in the nature, level and intensity of relationships among all social actors, a growing number of international business (IB) phenomena highlight the central role identity and various crises of identity play in our postmodern and globalised society (Fukuyama, 2019). Such phenomena, for example, range from gender equality and human rights, to the decline of the middle-class in the global west, to trade wars between leading world economies, to questions related to world order, to racism, ethnocentrism and xenophobia, to the policy and business challenges of how nations address the covid-19 global pandemic.
Sociology on (Social) Identity
Identity and social identity are not the same thing. They relate to two different, albeit related theories. Both address self-construal and its impact on normative behaviours in a social world. Table 1 compares the key points related to IT and SIT. Representing parallel theoretical universes, Identity theory (IT) is considered a micro-sociological perspective (focusing on the individual) with roots in psychology. Social identity theory (SIT) focuses on group processes and relations within/between groups with roots in social psychology and sociology (Hogg, Terry, & White, 1995). These differences are, however, more “differences in emphasis than in kind” (Stets & Burke, 2000: 224).
Both IT and SIT deal with the “social self” in relations to the “social world.” While IT addresses identity based on one’s roles (What does one do?), SIT focuses on within-group standing and in- or out-group membership (Who are we/they?). Both views are needed to understand micro, meso and macro-level social and organizational processes (Stets & Burke, 2000).
IB Literature on (Social) Identity
The application of IT and SIT within IB has been shaped by the markets-vs-hierarchies framework. From a bird’s eye view, IT has been used to address what-type questions addressing roles within two different research streams: a strategic management one focusing on organizational units and an international management one focusing on people. Both assume a strong organizational narrative, somewhat counterintuitive to the micro-sociological nature of IT. It is only recently, that greater attention has been paid to so-called micro-foundations within IB.
The strategic stream focuses on the roles played by subsidiaries within multinationals. This has led to the creation of various types of subsidiary typologies emphasizing competencies, market importance and their knowledge-related roles. Others linked the emergence of three types of dual organizational identities (DOIs) (distinct, compound, nested) with their “extreme heterogeneity” at various levels (i.e., externally, intra-organizationally and at the individual level). They showed that understanding DOIs is an integral part of managing a portfolio of dually-embedded subsidiaries within the multinational network. This has often taken place under the umbrella of the knowledge-based view of multinationals. Some questioned the assumed superiority of multinationals as organizational hierarchies over the market in terms of knowledge generation and recombination. They saw multinationals as only one type of an epistemic community and drew on the concept of identity to understand the knowledge generating roles played within such communities.
The managerial stream has less explicitly emphasized identity. Research on expatriates has come closest to this. Research focusing on expatriates has come a long way from addressing the various roles performed by expatriates to more recent issues surrounding their identity. SIT has been also applied in culture, marketing and consumer-related studies, as well as organizational behaviour studies. In all cases, it was applied to address identity construal of a particular social group (i.e., global citizenship, multi-culturalism, transnational cultures), to understand social categorization (i.e., attitudes, perceptions, stereotypes) and/or to address in-/out-group membership (i.e., acculturation, various types of faultlines) and corresponding normative behaviour (i.e., stereotyping, consumer ethnocentrism, managerial decision making, cultural intelligence, talent management, international HRM issues). Within the culture stream, the use of SIT seems to be growing fast, as issues related to within-vs-between-country variability increase and the methodological problems underlying existing national culture typologies become apparent.
What about Managerial Practice?
Managers need to become increasingly aware of the various roles assumed by their employees, business partners and/or customers, as do policy makers. For example, being working parents or busy single professionals is not just something “ones does privately”. It is something one is all the time! People might identify with different genders beyond the male-female dichotomy, or need to suppress who they are when showing up at work and expected to perform. This does not only become a question of equity and justice. Such identity-based roles profoundly shape values, schemas and peoples’ well-being. In a recent interview, for example, Taylor Swift commented how completely different language is employed to discuss success of women (i.e., calculative, cunning) versus men (e.g., strategic, smart). Research on linguistic gender marking within IB (e.g., Shoham, 2019) shows how language is used in organisational politics of power to ensure gender performativity. At a much grander scale, many politicians have become masters of harnessing the power of identity politics, misusing issues related to immigration, international trade or the environment by playing on identity roles.
As social actors, people are also members of social classes (i.e., middle-income class, working class), ethnic groups, citizens of countries and members of specific generations. For example, it is becoming increasingly apparent that a large part of the growing anti-globalisation sentiment in the “global West” can be explained by growing inequality and the so-called elephant curve. It shows that changes in real income since the 1980s have been substantially larger for the middle class in emerging markets like China and India, while the middle class in developed western markets has seen their real income actually shrink (Lakner & Milanovic, 2016). While our parents’ generation wanted to be vegetarian for the animals’ sake, the millennial generation is doing it to save the environment. For all the economic reasons behind the US-China trade war, there is a lot to be said about America’s perception of itself as a leader of the free world, or the various types of moral disengagement mechanisms being employed by parts of its society. An important force behind the recent political turmoil in Hong Kong has strong generational root causes. All these issues have not been part of managerial thinking enough until recently. However, they are becoming increasingly relevant, as much of the external environment risk has become endogenous “system risk” overnight.
How Can IB Scholars and Managers Get More out of (Social) Identity Theory?
A fundamental shift is needed within the IB literature and beyond to address ontological and epistemological boundaries which have long remained unquestioned. This has increasingly limited the support which we the IB discipline can provide to managers, policy makers and the general public.
At the discipline level, IT can guide IB scholars to reflect more on the specific role IB as a discipline should play in today’s world, where many of our existing types of boundaries matter increasingly less and the traditional types of global-local dualism are vanishing. Instead of asking ourselves who we are as a discipline, our quest for legitimacy and identity should be more informed. First, it should be informed by greater sensitivity to ontology, not just epistemology. Second, it should be informed by being mindful of the emergence, functions and transformation of IB actors, as social actors, in their various roles in the real world.
Focusing on specific themes and areas of research within the IB discipline, (S)IT can stimulate relevant questions for advancing the IB discipline, supporting managers and helping inform policy making. Table 2 finishes with some suggestions of research questions for IB and managerial tips in four major areas: Multinationals, Culture, Consumers/Marketing, and Global Business Environment.
About the Author
Matevz (Matt) Raskovic (email@example.com) is a Senior lecturer in international business at Victoria University of Wellington, New Zealand where he is also the Director of Learning & Teaching at the School of Marketing and International Business. He is further a visiting professor at Zhejiang University in China and was the 2017 Fulbright Fellow at Harvard University, FAS Sociology. His research intersects international business, economic sociology and consumer culture theory. Matt is a Senior editor at the European Journal of International Management.