The Effect of Institutional Context, Distance, and Routine Complexity on the Transfer of Routines Across Borders

Transferring routines and practices within Multinational Enterprises (MNEs) is a prevalent and, at times, tedious process. New institutional context imposes forces for local adaptation, which disrupts the stability of the routine - stability due to the interplay between ostensive (the codified and/or abstract version of the routine) and performative (the practiced version) aspects of the routine. Change in routines is then needed to ensure local adaptation and the routine reaches a new state of stability. Our study focuses on the micro-processes of the transfer process and the pertinent states of stability and change in the focal routines and practices. We use simulation experiments and examine the effect of intuitional pressures for local adaptation. The local adaptation speed of ostensive routine is shown to matter. Slow enactment of the revised version of the ostensive routine (i.e. implementation of the locally adapted routine) at the subsidiary level can disrupt the stability of the routine.