A processual view of organizational stigmatization in foreign market entry: The failure of Guggenheim Helsinki

Abstract

Multinational organizations increasingly face strong resistance to their marketentry by some local audiences, reflecting growing ideological divisions andpopulism in societies. We turned to the organizational stigma literature for theconceptual tools and vocabulary to uncover why multinationals cansimultaneously be praised by some audiences and tainted by others.Drawing on a longitudinal explanatory case study of an unsuccessful marketentry, we develop a process model of organizational stigmatization in aforeign market entry. Our model explains how and why some local audiencesmay taint the core attributes of an entry-seeking organization and its marketentry process, while others may embrace the foreign entrant. We alsointroduce the notion of cross-border stigma translation where negativeaudience evaluations are amplified across geographic contexts. A focus oncompeting local audiences is important for understanding the generativemechanisms of the liability of foreignness and liability of origin and how tomanage them. Our study grounds a conversation on the processes andmechanisms of organizational stigmatization that may cause permanentliabilities to foreign organizations