Tri-Space Framework for Understanding MNC Behaviour and Strategies: An Institutionalism and Business System Perspective

‘How do firms behave?’ has been a common question in strategic management (Rumelt et al., 1994), the answer to which leads to understanding firm strategies. Answering this question in international management (IM) is not as simple as it can be for domestic firms whose activities confine mostly in domestic context. Understanding MNC behaviour is complex because its behaviour is not shaped by the internal decisions of an MNC’s subsidiaries alone but also by external institutional factors and the MNC’s organizational network in which its headquarters (HQ) play dominant roles (Morgan et al., 2001; Collinson and Morgan 2009). The question ‘How do MNCs behave?’ is related to ‘What influences MNC behaviour?’ ‘How is this influence exerted?’ and ‘Where those factors lie?’ The third question — ‘Where those factors lie?’ — is important to understand in MNC strategy research, because an MNC has a complex organizational structure that extends across national boundaries and there is a multifaceted relationship between MNC organization and multiple exogenous factors from multiple spaces. Its HQ is located in one institutional space, while it operates in multiple institutional spaces, that is, across national borders and, it is even linked with and influenced by global institutional actors who lie at a global space, a space that is at least not located in a national institutional space. Thus, I want to present a framework using three different concepts that indicate three different spaces (a) institutionalism and business system (b) civil society (CS) and (c) transnational community (TC).