Abstract
AbstractIn this paper, we leverage the concept of organizational field, currently under‐explored in international business literature, to understand how multinational enterprises (MNEs) from developed markets (DMs) strategically manage their institutional context in emerging markets (EMs). To develop theoretical arguments, we focus on institutional strategies and theorize how and to what extent MNEs in central, peripheral, and intermediate field positions engage with host country institutions in EMs. Using an international business perspective, organizational theory, and illustrations from EMs, we develop a dynamic view of field positions to identify how MNEs' intermediate repositioning trajectories in between the field's center and the periphery, driven by environmental and corporate factors, lead to the associated changes in the form and scope of institutional strategies deployed in EMs. In doing so, we offer testable propositions for future research.
Highlights
Institutions, or “multifaceted, durable social structures, made up of symbolic elements, social activities, and material resources” (Scott, 2001, p. 49), define the social context in which organizations are embedded and shape organizational actions (DiMaggio & Powell, 1983)
We propose that this strategic advantage of multinationality (Regnér & Edman, 2014) can be tempered by multinational enterprises (MNEs) field position, which dictates the choice and scope of institutional strategies available to MNEs
By integrating arguments from international business (IB) and organization theory, we argue that these strategies are not available to all MNEs, nor do they uniformly lead to firms achieving their desired outcomes in the host market
Summary
Institutions, or “multifaceted, durable social structures, made up of symbolic elements, social activities, and material resources” (Scott, 2001, p. 49), define the social context in which organizations are embedded and shape organizational actions (DiMaggio & Powell, 1983). Yildiz & Fey (2012), on the other hand, proposed that in transition economies, where institutional demands are in flux, MNEs might adopt alternative strategies to secure legitimacy from local audiences: reducing local reliance through global procurement strategies, leveraging positive stereotypes against ethnocentrism and using favorability toward foreign direct investment (FDI) to reduce pressures for external isomorphism. Useful, these strategies are passive as they do not entail active engagement with institutions that create challenges for MNEs in the first place. We close with a discussion of contributions and implications for future research
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