How do subsidiaries confront institutional duality? Identity claims at Hindustan lever 1961-2009

Abstract

The concept of institutional duality informs us that the subsidiary needs to conform, simultaneously, to isomorphic pressures emanating from two distinct institutional environments: the multinational organization and the host country. However, research in international management has yet to examine how the subsidiary management confronts the strategic challenge posed by the condition of institutional duality. Reinterpreting the classic global integration-local responsiveness tension from the subsidiary perspective, we argue that the subsidiary possesses a hybrid identity, i.e., an identity framed by the synthesis of two distinct, often conflicting identities – an MNC identity and a host country identity. Further, we propose that changing subsidiary identity claims reflect the ongoing process whereby the subsidiary responds and adapts to the dynamic balance between multinational organization pressures and home country pressures. Using qualitative procedures, we examine the evolution of identity claims made over a period of nearly half a century by the subsidiary management at Hindustan Lever - the Indian subsidiary of Unilever Inc., one of the world’s leading MNCs in the fast moving consumer goods industry. Employing grounded theoretic techniques, we develop a process model that highlights how the coupling of manifest and latent aspects of subsidiary identity provide subsidiary managers the flexibility to respond to the dynamic character of institutional duality. An important implication for practice lies in the revival of the country manager and the possibility of subsidiary identity management becoming central to the role of the country manager.