Cultural Characteristics as Institutional Environment Shift Parameters: A Study of Governance Modes in CBAs

Abstract

Recent, influential research in international business has given a new fillip to the institution-based view by proposing that it is evolving from a theoretical lens towards an integrative paradigm for the field (Cantwell, 2016; Meyer & Peng, 2016). The recipients of the 2015 JIBS Decade Award, Klaus Meyer and Mike Peng attribute variations in business context to be of critical importance for the explanation of business phenomena around the world, and propose that the institution-based view integrates perspectives from both developed and emerging economies into its fold. Such research has highlighted the importance of both formal and informal institutions, and their interactions (Ang, Benischke, & Doh, 2015). Informal institutions often tend to be more persistent than formal institutions, but in different contexts they have been found to substitute, accommodate or even replace the formal institutions (Estrin & Prevezer, 2011); and during economic transitions, they also compete with and undermine the effectiveness of existing formal institutions (Peng, 2003). The bulk of the studies have focused on studying the influence of home country informal institutions or the differences/distance between home and host country institutions (Meyer & Peng, 2016). Little attention has been devoted to the exclusive impact of the host country informal institutions. The few studies that do so, examine it indirectly through phenomena such as social adaptation of MNCs (Zhao, Park, & Zhou, 2014), or as broader studies extending the influence of cultural distance (Beugelsdijk, Slangen, Maseland, & Onrust, 2014; Brouthers 2002, Slangen & Beugelsdijk, 2010). Although recognized as an enduring topic of interest to international business and management (Caprar, Devinney, Kirkman & Caligiuri, 2015), the informal institution of host country national culture in particular has not received adequate attention, either empirically or theoretically (Harzing, 2003; Morschett, Klein & Swoboda, 2010).