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Adoption of Practices by Subsidiaries and Institutional Interaction within Internationalised Small- and Medium-Sized Enterprises

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  • Hsiang-Lin Cheng

    (National Chung-Cheng University)

  • C.-M. J. Yu

    (National Cheng-Chi University)

Abstract

This study examines the “intra-organisational dynamics” of the adoption of internal practices by subsidiaries of internationalised small- and medium-sized enterprises (SMEs) from the perspective of institutional theory. Based on a survey of 149 foreign subsidiaries of Taiwanese SMEs, the findings show that parent-firm executives of SMEs who are deeply involved in subsidiary operations will assess strong pressure from their home-country institution to adopt internal standard practices within a subsidiary. However, subsidiary executives of SMEs who assess heavy pressure from the host-country institution will resist this adoption. When executives of SME parent firms and subsidiaries concurrently assess high pressure but from opposing sources, creating a case of “institutional interaction” within SMEs, the subsidiary will either partially adopt a limited but sufficient level of all internal practices or only adopt internal managerial practices while forgoing internal production practices.

Suggested Citation

  • Hsiang-Lin Cheng & C.-M. J. Yu, 2012. "Adoption of Practices by Subsidiaries and Institutional Interaction within Internationalised Small- and Medium-Sized Enterprises," Management International Review, Springer, vol. 52(1), pages 81-105, February.
    • Handle: RePEc:spr:manint:v:52:y:2012:i:1:d:10.1007_s11575-011-0117-9
    DOI: 10.1007/s11575-011-0117-9
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