Non-market strategies within conflicting institutional pressures: The case of western multinationals in a post-socialist context

This chapter investigates how multinational subsidiaries develop political strategies within the conflicting pressures of the host country’s institutional context and the MNE’s parent strategies in a high-risk, emerging market context. The chapter links the literatures on institutional duality and corporate political activity (CPA)corporate political activity (CPA) and makes three distinct theoretical contributions. First, the chapter transfers the analysis of non-market strategies from the institutional to the firm level, by opening the black box of how subsidiaries develop host country strategies. Second, by focusing on the process of how subsidiaries turn external and internal resources into political capabilities, it argues that institutional duality should be viewed as an endogenous aspect of the institutional framework, which equips firms with political capabilities, rather than an exogenous factor that constrains them in the host environment. Third, it contributes to the theory of MNE parent-subsidiary management literature by extending our knowledge on how parent strategies affect the development of subsidiary’s political strategies.