Leveraging the common and outsourcing the distinct: institutional difference and multinational company identity in emerging economies

Abstract

This paper explores the challenges of outsidership faced by multinational companies (MNCs) accessing emerging economies. The paper departs from popular conceptualisations of culture drawing instead on social identity theory as part of an institutions-based view, to explain how employing a singularities approach can allow the identification of commonalities of Indianness and Australianness that can be leveraged to ameliorate negative socially embedded business norms that pose a challenge to MNC success in emerging economies. This study shows that despite recognised formal (regulatory) and informal (cultural) differences, managers of Australian MNCs operating in India were able to innovatively identify and exploit cultural commonalties/singularities to ease cultural adjustment and mitigate intergroup conflict, allowing them to achieve an innovative institutional fit. The paper discusses how, using this approach, sole-venture MNCs can access many of the benefits provided by collaborative entry modes while preserving MNC identity. We further propose that the singularities approach can provide a valuable starting point to develop culturally appropriate competence training initiatives.