How Multinational Banks in India Gain Legitimacy: Organisational Practices and Resources Required for Implementation

Paul Caussat, Nathalie Prime, Robert Wilken

Research output: Contribution to journalArticlepeer-review


Liability of foreignness (LOF) refers to the difficulties and additional costs that mul- tinational enterprises face when they operate in a foreign market. Rooted in institu- tional theory, extant literature has discussed isomorphism, transference, and socio- political activism as legitimation strategies to counteract LOF. This view relates to the macro level of firm and society, assumes passivity of subsidiaries, and neglects implementation of these strategies. Consequently, this paper aims at complementing this restrictive view through a qualitative study to explore how French multinational banks respond to LOF challenges in India, an adverse institutional environment typi- cal of emerging markets but also unique due to strong economic nationalism and cul- tural traditions. As such, the present article contributes to the institutional research stream by (1) presenting an empirical investigation at the micro level of subsidi- ary organisational practices to operationalise legitimation strategies in managerial terms; (2) revealing rhetoric proactive strategies beyond the passive or reactive paths identified previously; and (3) discussing the internal implications of implementing legitimation strategies directed at external recipients within the intraorganisational network of multinational banks, using the resource-based view.
Original languageEnglish
Pages (from-to)561-591
Number of pages31
JournalManagement International Review
Issue number4
Early online date27 Jun 2019
Publication statusPublished - Aug 2019


  • Legitimacy
  • Liability of foreignness
  • Organisational practices
  • Multinational corporations
  • India
  • Rhetoric strategies

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