Adoption of an Organizational Practice by Subsidiaries of Multinational Corporations: Institutional and Relational Effects

Abstract

We examine the adoption of an organizational practice by subsidiaries of a multinational corporation (MNC) under conditions of “institutional duality.” Drawing on institutional theory, we identify two factors influencing the adoption of a practice: the institutional profile of the host country and the relational context within the MNC. We also specify conditions leading to “ceremonial adoption.” General support is found for the model based on data from 534 managers and 3,238 nonmanagerial employees in 104 subsidiary locations from ten countries.