The double-edged sword effect of adaptation strategy on performance: The mediation of legitimacy and synergy

Abstract

This study aims to advance theoretical development regarding the double-edged sword effect of adaptation strategy on performance from the institutional theory and organizational learning theory perspectives. In particular, we examine the intermediate role of legitimacy and synergy to explain the different paths from marketing adaptation strategy to performance contingent on the environmental conditions of cultural distance. Data from a survey of 202 Chinese multinational corporations located in 24 different host countries are analyzed, and the results reveal that the effect of adaptation strategy on performance is positively mediated by legitimacy but negatively mediated by synergy. Meanwhile, the indirect effect of adaptation strategy on performance via legitimacy and synergy is also moderated by cultural distance such that both indirect effects are stronger in host countries with a high cultural distance. This study provides theoretical and managerial implications for adaptation strategy research.