MNC Strategic Responses to Ethical Pressure: An Institutional Logic Perspective
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- Tan, J. & Wang, L. J Bus Ethics (2011) 98: 373. doi:10.1007/s10551-010-0553-7
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In this study, we aim to investigate how multinational corporations (MNCs) balance ethical pressures from both the home and host countries. Drawing on theories from institutional theory, international business, and business ethics, we build a theoretical framework to explain the ethical behavior of MNCs. We apply the institutional logic concept to examine how MNCs with established logics and principles that have grown in the home country respond to local ethical expectations in the host country. We differentiate the core values from the peripheral components of a MNC’s institutional logic and propose that a MNC will pursue distinctive ethical strategies under different scenarios and choose the “right” configuration of core values and peripheral components that align with institutional environment in host countries.