Strictly Limited Choice or Agency? Institutional Duality, Legitimacy, and Subsidiaries’ Political Strategies

24 Pages Posted: 17 Apr 2014

See all articles by Phillip C. Nell

Phillip C. Nell

Vienna University of Economics and Business - Department of Global Business and Trade; Copenhagen Business School - Department of Strategy and Innovation

Jonas Puck

Vienna University of Economics and Business

Stefan Heidenreich

Vienna University of Economics and Business

Date Written: April 15, 2014

Abstract

This article analyzes political strategies of MNC subsidiaries in emerging markets. We find that institutional pressures from public and private non-market actors in the emerging market lead to increased political activism. Furthermore, we find that these relationships become stronger, when the external pressures are joined by strong firm-internal pressures. Our findings contribute to the scarce literature on firms’ political strategies in emerging markets. They also support recent criticism of institutional theory’s strong focus on isomorphism as the most important legitimacy-conveying mechanism. We argue that the isomorphism-based either-or logic gives way to stronger agency of the subsidiary and to a logic of active negotiation and social construction of the subsidiary’s legitimacy in the emerging market. Our findings show support for this idea as political activism is one such way how the subsidiary’s legitimacy can be built and nurtured.

Keywords: Political strategies, institutional theory, emerging markets, MNC subsidiaries

Suggested Citation

Nell, Phillip C. and Puck, Jonas and Heidenreich, Stefan, Strictly Limited Choice or Agency? Institutional Duality, Legitimacy, and Subsidiaries’ Political Strategies (April 15, 2014). Available at SSRN: https://ssrn.com/abstract=2425212 or http://dx.doi.org/10.2139/ssrn.2425212

Phillip C. Nell (Contact Author)

Vienna University of Economics and Business - Department of Global Business and Trade ( email )

Welthandelsplatz 1
Building D1
Vienna, 1020
Austria

Copenhagen Business School - Department of Strategy and Innovation ( email )

Kilevej 14
Frederiksberg, 2000
Denmark

HOME PAGE: http://www.cbs.dk/

Jonas Puck

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
1020

Stefan Heidenreich

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, Wien 1020
Austria

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