Practice Adoption in MNCS: A Multi-level Interactionist Model of Trait Activation

Abstract

Research Summary: Sharing knowledge through organizational practices is an important source of advantage for multinational corporations (MNCs). While prior research on practice adoption by subsidiaries of MNCs has identified several individual and organizational factors, this study examines their inter-play in the context of HQ-mandated practices. Drawing on trait-activation theory and zooming in on the complex and nested HQ-subsidiary relationships, we propose that recipient-unit managers' core self-evaluations (CSE) interact with situational features at different levels—the recipient-unit, the practice, and the country levels—to shape adoption of HQ-mandated practices in MNCs. Using a sample of 130 recipient-unit managers in a European MNC, our findings support most theoretical predictions but also reveal variation in situational influences across levels of analysis. With this multi-level interactionist model of trait activation, we advance a relational perspective on practice adoption in MNCs and contribute to the microfoundations perspective in international strategy. Managerial Summary: Corporate headquarters (HQ) in multinational corporations can share knowledge by rolling out practices to subsidiaries to achieve synergies, efficiencies, and compliance. Yet the adoption of these practices by subsidiaries can vary substantially. This study shows that recipient-unit managers' personality traits influence practice adoption across different contextual situations. Recipient-unit managers with stronger personality traits—such as higher self-confidence and proactiveness—have a positive effect on practice adoption. More importantly, however, the situational context shapes this effect: While formal rules (structural coordination) may suppress it, informal means (relational coordination), the types of knowledge involved, and greater distance between HQ and subsidiaries can enhance it. Accordingly, the study suggests that competent managers matter, but that their role in practice adoption is shaped by the specific context.