Working for a multinational corporation that failed—especially if you worked in the unit or physical location of the organization deemed responsible for the failure—has been shown to result in a loss of legitimacy.

Now, a new study published in Global Strategy Journal takes a look at another side of the equation: What does it mean to hire these workers? And could it be part of a global corporation’s human resources strategy?

The research team—Kristina Vaarst Andersen of the Technical University of Denmark, Mark Lorenzen of Copenhagen Business School, and Agnieszka Nowinska of Aalborg University Business School—explores how globally mobile workers with highly specialized skills can still be desirable candidates even if their legitimacy was harmed. They use a case study of traders laid off by a bankruptcy in the global bunker industry (OW Bunker), offering a theoretical analysis of worker mobility between multinational organizations.

“The fact that the traders left unemployed by the failure of OW Bunker were in high demand was of course interesting, but our main interest was in how organizational and geographical variations influenced the social evaluation,” Vaarst Andersen says. “This is interesting from an academic perspective, but also holds practical implications: Potential employers may use the effects of geographical location and organizational unit on the social evaluation of employees in strategic hiring efforts.”

They found that, yes, laid-off workers experienced comparatively high legitimacy loss if they worked in the unit or geographical location where other workers were suspected of being responsible for the corporation’s failure. But they still had the in-demand skills—vital technical or external knowledge, cultural experience, or social relations, for example—that could boost a company’s competitive advantage.

Typically, competition to hire such workers is high, so scooping up laid-off workers whose legitimacy has taken a hit presents a rare opportunity. These individuals’ bargaining power for above-average wages or promotions is reduced by the situation. But if they’re not assigned to a position involving trade, communication, or negotiation with others in the industry—where reduced legitimacy could be a hindrance—then the hiring company has the upper hand in negotiating with such highly specialized workers.

Granted, spectacular failures of market leaders with a global geographical presence are rare, Vaarst Andersen says, but cases of how social evaluations negatively influence career prospects are far too common.

“With the changing geopolitical situation, we also begin to see examples in academia of scientists who find it harder to get accepted to positions or attract funding based on affiliations with specific universities and research communities,” she says. “As in our study, such social evaluations may be based on assumption rather than knowledge of the individual.”

When you consider a global company like WeWork, so impactful that its name is synonymous with coworking spaces, are all of its employees marred from the company’s fall from grace and recent bankruptcy filing in the U.S.? Some of those individuals—especially those with specialized skills—could be a strategic boon to your business, even if a company listed on their resume raises eyebrows.

Published Date
18 December 2023

Article Type
Article Press Release, Article Summary/Abstract, Journals News


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