How Multinational Banks in India Gain Legitimacy: Organisational Practices and Resources Required for Implementation

Paul Caussat (), Nathalie Prime and Robert Wilken
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Paul Caussat: Royal Holloway University of London
Nathalie Prime: ESCP Europe
Robert Wilken: ESCP Europe

Management International Review, 2019, vol. 59, issue 4, No 4, 591 pages

Abstract: Abstract Liability of foreignness (LOF) refers to the difficulties and additional costs that multinational enterprises face when they operate in a foreign market. Rooted in institutional theory, extant literature has discussed isomorphism, transference, and sociopolitical activism as legitimation strategies to counteract LOF. This view relates to the macro level of firm and society, assumes passivity of subsidiaries, and neglects implementation of these strategies. Consequently, this paper aims at complementing this restrictive view through a qualitative study to explore how French multinational banks respond to LOF challenges in India, an adverse institutional environment typical of emerging markets but also unique due to strong economic nationalism and cultural traditions. As such, the present article contributes to the institutional research stream by (1) presenting an empirical investigation at the micro level of subsidiary organisational practices to operationalise legitimation strategies in managerial terms; (2) revealing rhetoric proactive strategies beyond the passive or reactive paths identified previously; and (3) discussing the internal implications of implementing legitimation strategies directed at external recipients within the intraorganisational network of multinational banks, using the resource-based view.

Keywords: Legitimation by isomorphism; Legitimation by transference; Liability of foreignness; Organisational practices; Rhetoric legitimation strategy (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (11)

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DOI: 10.1007/s11575-019-00387-6

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