Peer Conformity, Attention, and Heterogeneous Implementation of Practices in MNEs

Journal of International Business Studies, Forthcoming

HEC Paris Research Paper No. SPE-2015-1098

46 Pages Posted: 2 Aug 2015 Last revised: 5 Sep 2015

Rodolphe Durand

HEC Paris - Strategy & Business Policy

Anne Jacqueminet

HEC Paris - Strategy & Business Policy

Multiple version iconThere are 2 versions of this paper

Date Written: July 1, 2015

Abstract

How do subsidiaries respond to normative demands from both their headquarters and local external constituents? We propose that subsidiaries pay varying levels of attention to either demands depending on their peers’ norm-conforming behavior, resulting in heterogeneous practice implementation. We study the implementation of 25 practices, associated with three corporate social responsibility (CSR) issues in 101 worldwide subsidiaries of a multinational enterprise (MNE). Consistent with the idea that attention is limited and therefore selective, we find that external peers' conformity to the CSR norm directs subsidiaries’ attention toward the CSR-related demands of external constituents at the expense of the demands from the headquarters. However, internal peers’ conformity increases attention to both external and headquarters’ demands related to CSR. As higher attention levels result in higher practice implementation, internal and external peers' conformity drives the heterogeneity of practice implementation in the MNE. Our results suggest the need to rethink the influence of peers’ conformity on subsidiaries’ implementation of practices, as it not only triggers mimicry based on legitimacy but also and simultaneously a more strategic response based on internal and external competitive threats and attention allocation.

Suggested Citation

Durand, Rodolphe and Jacqueminet, Anne, Peer Conformity, Attention, and Heterogeneous Implementation of Practices in MNEs (July 1, 2015). Journal of International Business Studies, Forthcoming; HEC Paris Research Paper No. SPE-2015-1098. Available at SSRN: https://ssrn.com/abstract=2638422

Rodolphe Durand (Contact Author)

HEC Paris - Strategy & Business Policy ( email )

Jouy-en-Josas Cedex, 78351
France

Anne Jacqueminet

HEC Paris - Strategy & Business Policy ( email )

Jouy-en-Josas Cedex, 78351
France

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