The joint effects of institutional logic multiplicity and distance on within-MNE CSR performance differences

Abstract

In strategic domains characterized by high public scrutiny, such as corporate social responsibility (CSR), multinational enterprises (MNEs) typically strive to maintain consistent performance levels across their subsidiary networks to cope with institutional pressures and minimize reputation damage and legitimacy risks. However, extant research has thus far focused on the influence of institutional pressures on the CSR performance of either the MNE as a whole or individual subsidiaries, revealing little about CSR performance differences within the MNE. We adopt an institutional logics lens to argue that within-MNE CSR performance differences are a function of home- and host-country logic multiplicity, because logic multiplicity causes ambiguity about the prioritization of CSR. Further, we argue that these effects are amplified by institutional distance. Analysis of 122 headquarter-subsidiary dyads over 12 years shows that home- and host-country logic multiplicity are associated with greater subsidiary CSR underperformance relative to headquarters, and that institutional distance between the home and host country amplifies the direct effect of host-country logic multiplicity. This study generates important implications for research on international strategy, institutional logics, and international CSR.