Abstract
This paper aims to analyze and clarify an entrepreneurship process in foreign subsidiaries from the viewpoint of the institutional theory. As an analytical framework, the paper focuses on multiple interactions between a subsidiary manager’s behavior and dual institutional contexts (multinational corporation and local market) while subsidiary initiatives are underway. A case study of a new business development initiative in Daikin Europe revealed that subsidiary managers faced “legitimacy crises” triggered by inconformity, conflict, and different interpretations involving interests, norms, and beliefs of multiple stakeholders. To overcome such crises, subsidiary managers took different actions (selective mobilization of collaborators, reframing of stakeholder relationship) and proactively gained understanding and support of stakeholders. The findings show that a subsidiary manager’s strategic behavior could influence existing institutional contexts and provide the practical implications for effective subsidiary management.
