Resource Dependence And Practice Standardization In Cross-Border Alliances

Abstract

This study examines the relationship between power dependence and practice standardization, which remains largely unexplored in the standardization-adaptation literature. Existing studies have focused largely on the power advantage of MNCs, but ignored that of local firms. Drawing on resource dependence theory, we argue that the power dependence relationship of multinational corporations (MNCs) and local firms in their respective dyads affect MNCs’ cross-border practice standardization. The results show that MNC ownership and the importance of MNC’s resource to the local firm in formed alliances both drive MNCs’ practice standardization. In contrast, local firms with established relationships with multiple other MNCs in the home country are able to maintain their autonomy and accordingly MNCs may adapt their practices.