Informal, formal or hybrid – how expatriates in European MNC subsidiaries in South Korea manage hierarchy to enhance organizational agility

Purpose We examine managerial practices in South Korean subsidiaries of European Multinational Companies (MNCs) to understand how they navigate hierarchical structures during organizational transitions. Using an institutional lens, we explore the nature of hierarchy and how various types of hierarchy interplay in fostering agile organizational structures. Design/methodology/approach This study employs a qualitative research design based on 32 in-depth interviews with expatriates in top- and middle-management positions in European subsidiaries in South Korea. Findings Our results suggest that organizational hierarchy should not be conceptualized solely as a formal structure. Instead, organizational hierarchy, as part of an institution, can simultaneously encompass both formal and informal elements. These hierarchies interact dynamically, with hybridization occurring across a continuum. Hence, we propose classifying organizational hierarchy as a hybrid institution. Originality/value Research has highlighted a knowledge gap in understanding informal institutions and their interaction with formal institutions in organizational hierarchies. Our study reveals that informal institutions may reinforce hierarchies aligned with societal norms while destabilizing those that diverge from them, leading to both functional and dysfunctional outcomes.