2024

Nakpodia, Franklin; Ashiru, Folajimi Yesir; Adegbite, Emmanuel Afolabi; Koporcic, Nikolina

The international business (IB) literature offers valuable insights into the significance of institutional environments for multinational enterprises (MNEs) operating in different markets. However, less is known about the practical institutional challenges confronting mature MNE subsidiaries in weak institutional contexts, such as those in Africa, and how corporate governance mechanisms are deployed to address these challenges. Relying on institutional theorising and qualitative evidence from 34 interviews with executives of mature MNE subsidiaries in Nigeria, this paper documents three less-researched institutional challenges encountered by MNEs, i.e., the organisational identity conundrum (‘us vs them’), limited attention to social capital, and ‘word vs action’ contradictions. The study also frames three corporate governance-related themes that MNEs can use to manage institutional difficulties in Nigeria: enhanced local stakeholder engagement, accountability drivers, and use of innovation and technology. The study advances the IB literature as it sheds theoretical as well as practical insights into how mature MNE subsidiaries operating in a weak institutional context can overcome institutional challenges.