Foreignness, multinationality and inter-organizational relationships

Abstract

This article examines how being foreign and part of a multinational organization is likely to affect the costs and benefits of inter-organizational relationships and the ability to establish them. Applying theories of inter-organizational relationships to the context of the MNE, the article advances hypotheses that outline the direction of this impact, and test them on data on 554 advertising agencies in the US. Foreignness negatively affects the propensity to form inter-organizational relationships, and the impact of being part of a multinational organization is mixed, revealing complex relationships between inter- and intra-organizational interactions. The findings show the merit of the distinction between foreignness and multinationality, as two defining attributes of MNEs that differently shape their inter-organizational relationships. They suggest that the propensity of MNEs to form inter-organizational relationships differs from that of non-MNEs and requires its own theorizing. © The Author(s) 2010.