A number of studies have analysed how multinational enterprises (MNEs) develop appropriate strategies for managing the institutionally different contexts of various markets. However, we still know rather little about how MNEs manage different institutional pressures when they operate in emerging markets. These markets have a higher level of uncertainty as their values and structures undergo change. This paper investigates the microfoundations and routines that can be part of developing a firm's capability to achieve a legitimate and environmentally sustainable position in emerging markets. We focus upon the microfoundations and routines for managing regulative, normative, and cultural–cognitive pressures. The paper utilizes an extensive qualitative case study approach. It reports a study at corporate and subsidiary levels of 3 Swedish MNEs in the in 4 markets: Brazil, Russia, India and China. The study identifies a set of routines for managing each of the 3 institutional forces and supporting microfoundations at individual, interactive, and structural levels. We are thus able to offer new insights on how the institutional context interacts with MNE strategies and identify more generic routines and microfoundations behind the capability for developing a sustainable market position.
- Institutional theory
- emerging markets