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This paper aims to explore subsidiaries’ behavioural responses to volatile institutional pressures in the local context of the emerging Nigerian market.

The authors built on institutional and contingency theory to analyse previous literature on developed markets and apply it to African contexts. The authors used a context-specific volatile local context model to show how porous formal and strong informal institutions constitute international business (IB) as a contested terrain in the host country. The authors also used a qualitative methodology, involving multiple actors, to investigate this phenomenon in practice.

The findings indicated different types of institutional pressures shaping volatile local contexts, which together or separately impact subsidiaries, depending on their degree of exposure. Subsidiaries behaviourally respond to cope with these pressures through inclusive negotiations involving their home and host countries’ networks.

Previous research has imposed developed markets’ norms on emerging African markets, regardless of their volatility. As subsidiaries’ responses to local contexts in emerging African markets are poorly understood, the authors developed a volatile local context model, showing how IB becomes a contested terrain in host countries and the authors proposed a model that differentiates between informal institutions. The authors highlighted the impact of contextual pressures on subsidiaries, according to their levels of exposure to the local context. The authors concluded that committed alignment with a local context is necessary for presenting an effective contingent response to its volatilities.

To illustrate how threats of institutional duality (ID) incidence subsidiaries confront are converted to opportunities, by conceptualizing how subsidiaries attain operational legitimacy at both their headquarters (HQs) and host countries.

Using a systematic literature review, the authors build on institutional theories by analyzing the ID literature along its structure, main processes and outcomes. The authors configure frameworks of both HQ control systems and host countries' institutional threats, showing how subsidiaries contingently navigate across them using configuration, differentiation and avoidance strategies.

The authors’ findings show that “foresighted” subsidiaries attain operational legitimacy through configuration, differentiation and avoidance of threats incidental to ID, by strategizing along certain formal and informal institutional variables including legal, sociocultural and technical factors.

The authors propose “structural configuration of ID incidence” and “subsidiary path to legitimacy” frameworks. The former configures how the interaction between HQ and host countries' variables constitute ID incidence threats. The latter highlights how “foresighted” subsidiaries use configuration, differentiation and avoidance strategies to attain operational legitimacy.

The purpose of this paper is to improve the understanding of the dilemma of institutional duality (ID) confronting multinational corporations and to propose a workable solution for this problem.

The author has searched the literature using several terms directly related to the dilemma of ID and multinational firms.

The findings reveal that to attain “legitimacy”, subsidiaries strive to balance institutional pressures stemming from external environments in the host country and their parent organizations. Understanding institutional theories of multinational corporations enables the subsidiaries to manage external pressures. ID impact varies among subsidiaries, depending on institutional contexts and internal strategies of subsidiaries.

An “institutional duality incidence model” portraying how dual institutions make “legitimacy” problematic for subsidiaries is proposed. A framework for identifying factors generating ID dilemma and their management approach is also proposed. It is concluded that a multinational corporation that recognizes ID as a central concern is more likely to achieve and maintain a higher level of harmony with its subsidiaries and host countries.

The purpose of this paper is to advance understanding of why subsidiary initiative opportunities face constant opposition, despite being essential to the competitiveness of international organizations. The paper also develops a detailed theoretical framework to showcase the conflicts and opportunities created by subsidiary initiatives, as most research in this field is descriptive and comparative.

The paper draws substantially on entrepreneurship, agency, contingency and institutional theories, and focuses on the conflict generated by subsidiary initiatives in the context of headquarters–subsidiaries relationships, including the impact of developed and emerging markets. Based on a thorough analysis of the literature, the paper’s conceptual approach aims to develop models of how MNC networks deal with subsidiary initiatives.

The findings indicate that subsidiary initiative opportunities face opposition from both the organization and its environment.

The paper builds conceptual models showing the network of opportunities and conflicts created by subsidiary initiatives.

The research was governed by the following questions: 1. What opportunities and conflicts do subsidiary initiatives create in HQ-subsidiary relationships? 2. How does the MNC subsidiary network stifle or oppose subsidiary initiatives, and what role does HQ play in this process? 3. Does the subsidiary’s operating environment generate obstacles to new initiatives? 4. What factors moderate subsidiary initiative conflict in the MNC network?

The authors reviewed publications focusing on subsidiary initiatives from four leading databases – JSTOR, EBSCO, Google Scholar and Science Direct. They chose 52 papers for analysis of HQ-subsidiary issues. They chose an additional 62 publications that related to local environmental pressures that hindered subsidiaries. They narrowed their focus to emerging markets such as Nigeria

For subsidiary initiatives to do well, it’s essential to attract the “attention or interest” of HQ. But HQ pays attention only if it sees how the local plans will contribute to the corporation's overall interests. The corporate immune system (CIS) may become a major obstacle. It usually arises when CIS conflict triggers intra-firm competition over similar products between rival subsidiaries. However, if HQ perceives a subsidiary as having superior strategy it will be supportive of its initiatives.

Previous studies had focused on internal issues at the multinationals, whereas the authors wanted to study also the environmental obstacles to subsidiary initiatives