Pressure applied: coercive isomorphism and strategic decision-making process in MNC

Abstract

Achieving and maintaining legitimacy is a structured process for multinational companies because of the unclarity of the process, the complexity of the business and the complex legitimate environments within which the subsidiaries operate. Coercive isomorphism can be seen as a means of achieving legitimacy for multinational subsidiaries. In this paper, the authors explored the embodiment of coercive isomorphism for strategic decision making in MNCs (Multinational Companies). The starting point was that business activity of MNCs is unique and specific and that the adopted theoretical postulates of particular emergent forms of institutional isomorphism are focused solely on coercive isomorphism while achieving legitimacy (of subsidiaries). In this paper, the authors focused solely on the study of the influence of formal pressures in the context of coercive isomorphism, that is the ultimate source of coercive isomorphism, while informal pressures, although significant, serves the purpose of creating the intensity of the coercive isomorphism. The results of quantitative and qualitative analysis are presented in this article. The theoretical part of the paper summarizes the key ideas of coercive isomorphism, while the empirical part of the paper consists of quantitative and qualitative research. The relationship between the form of forced isomorphism and the decision-making process was examined by multiple regression cross sections.