Abstract
As green purchasing is the very first step of green supply chain, it is argued that successful green purchasing adoption can effectively help firms become greener along the line and gain sustainable competitiveness from doing green practices. Though green purchasing at firm level has been studied intensively in the last decade, green purchasing in subsidiaries of multinational companies (MNCs) has never been investigated before. It is found in industry that while parent companies initiate a green purchasing policy, and plan to transmit it worldwide, subsidiaries vary tremendously in their green purchasing level. There exists different level of local resistance in subsidiaries due to effort of changing localized working patterns, needs of extra resources, and involvement of risks and uncertainties. Therefore, subsidiaries are in tension between powers from parent companies that mandate to adopt a practice on the one hand, and forces from local environment, on the other hand. Drawing upon “institutional duality” in institutional theory, we develop an integrative model to explain the adoption of green purchasing by subsidiaries of a multinational corporation. Data from 141 purchasing staffs in 39 countries from an European-based MNC is collected to test our proposed model and hypotheses. Our analysis found that: (1) Different from previous firm level studies, neither drivers from parent company nor those from local environment (Institutional duality) have direct impacts on subsidiaries’ green purchasing level. Instead, how subsidiaries respond to the duality and then spend tailoring efforts plays a significant mediating role that decides their green purchasing level. (2) Institutional duality formulates the phenomena of local resistance. Subsidiaries require resources, time and efforts to respond to change requests and to tailor their internal processes. The better subsidiaries tailor themselves, the higher green purchasing level will they achieve. Our study contributes theoretically on extending the view point of institutional theory, while in practice, we suggest that auditing and competitiveness are two more influential schemes that parent companies can choose to effectively influence subsidiaries’ green behavior.