Unravelling the interplay between institutional logics, organizational identity, and the embeddedness of MNE subsidiaries in host countries

Abstract

Amid growing scholarly interest in institutional perspectives on MNE subsidiary embeddedness, this study develops a theoretical framework to explain how longstanding MNE subsidiaries navigate competing institutional logics by constructing organizational identities to develop embeddedness strategies in host-country contexts. Drawing on a qualitative case study of a Chinese MNE subsidiary in Ghana, we identify three embeddedness strategies – active engagement, pronounced resistance, and deliberate avoidance – that reflect subsidiaries' ability, willingness and constraints in responding to competing institutional logics. The study contributes to current literature by highlighting how organizational identity serves as a strategic lens for aligning or preserving selected organizational identities and shaping the strategic choices of embeddedness pathways. In particular, we highlight the agentic capabilities of subsidiary managers who, by acknowledging the inevitability of institutional constraints arising from competing institutional logics, adaptively mobilize alternative embeddedness strategies to mitigate and bypass potential institutional frictions.