Diffusion and translation: Business groups in the new Israeli corporate law

Diffusion is one of the most broadly studied topics in the social science; yet, this concept is under-theorized because studies ignore what happens when institutional principles and practices that originated elsewhere arrive at an organization or society. Translation is the most important mechanism involved, and theorizing translation requires understanding to institutional conditions and the actors involved: their motivation and interests and the relationships among them. This article focuses on corporate law reform in Israel, specifically questioning why the new corporate law does not refer to business groups, which form a salient part of the Israeli big-business economy. This article suggests that the Americanization of the Israeli legal culture was materialized via local actors who imported U.S. ideas while adapting them to existing legal culture. However, this process was not the result of a non-conflicting diffusion of ideas; rather, it was caused by manifest conflicts with non-state actors over desirable legal arrangements and economic and political interests.