Rethinking institutional distance: Using neo-institutional theory to inform international management

Abstract

The concept of institutional distance has proved useful in highlighting the challenges faced by MNCs stemming from the differences between the institutional contexts of their home and host countries. In this article, we use three ideas from neo-institutional theory to expand and clarify this important concept: institutional uncertainty, organizational field, and institutional entrepreneur. The concept of institutional uncertainty highlights the fact that it is not just differences in the institutional arrangements that affect international business, but also the fact that some institutional contexts are not deeply institutionalized. The concept of an organizational field highlights the fact ..