The social embeddedness of multinational companies: a literature review

Multinational companies (MNCs) combine the advantages of global strategies with embeddedness in heterogeneous social, and especially national, contexts. This embeddedness contributes to the innovativeness of MNCs by facilitating access to external resources and competences as well as coordination with internal and external actors. After a theoretical introduction to the embeddedness concept, highlighting its multidimensionality and dynamics as well as the role of agency, the contribution of International Business (IB) studies and economic sociology to clarifying the embeddedness concept will be discussed. In four strands of IB literature, the environments of MNCs are characterized by assets, contingencies, resources and rules. Sociological approaches focus on the influence of the broader institutional environment on MNCs, on the micro-political and cognitive-cultural dimensions of agency and on interdependency between transnational and other social spaces. These two fields of study contribute to a better understanding of the challenges faced by MNCs in dealing with heterogeneous social contexts.