Stickiness And The Adaptation Of Organizational Practices In Cross-Border Knowledge Transfers.
Introduction
The effective deployment of products, technology, and knowledge in multiple locations has long been identified as a critical success factor of MNCs (Buckley and Casson, 1976; Hymer, 1976; Dunning, 1977; Kogut and Zander, 1993; Zaheer, 1995). Substantial attention has been devoted to prescribing adaptation as a necessary component in transfers of firm-specific assets (Prahalad and Doz, 1987; Bartlett and Ghoshal, 1989). For example, it is often argued that consumer products, advertising campaigns, or distribution policies are more likely to function effectively when they are modified to reflect local market dynamics. Existing normative advice focuses on isolating criteria that should guide such adaptation, with criteria including differences in culture (Lemak and Arunthanes, 1997), consumer preferences and needs (Cui and Liu, 2001), and labor practices (Rosenzweig and Nohria, 1994).
More recently, a broader and more stylized perspective on adaptation has been developed by scholars of institutional theory. An institutional perspective suggests that legitimation is the main purpose and beneficiary of adaptation. In essence, adaptation is argued to increase both cognitive and normative legitimacy, resulting in increased recipient motivation and ability to accept and utilize a transferred asset (Kostova, 1999; Kostova and Zaheer, 1999; Kostova and Roth, 2002).
In addition, institutional scholars offer the criterion of institutional distance as a factor moderating the influence of adaptation. Specifically, they suggest that legitimacy, both cognitive and normative, is directly related to institutional distance, with such distance reducing the legitimacy of a transferred asset (Kostova and Zaheer, 1999). Given that adaptation increases legitimacy by altering the asset to isomorphically fit the local environment, it follows that, as institutional distance increases, the benefit of adaptation is also likely to...
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