Interorganizational Supply Linkages and Firm Performance among Multinationals in Thailand:
An Empirical Exploration of Institutional Theory


Stephen J. Appold
Department of Sociology
National University of Singapore
11 Arts Link
Singapore 117570
Sununta Siengthai
School of Management
Asian Institute of Technology
Klong Luang, Rangsit, 
Pathumthani 12120, Thailand
John D. Kasarda
Kenan-Flagler Business School
University of North Carolina
Chapel Hill, NC  27599-3440

New institutional theory provides an attractive explanation for national variations in the pattern of organizing by positing the existence of cognitively institutionalized behaviors.  Some aspects of those patterns, such as cooperative behaviors, may be important for organizational performance.  Yet the theory lacks adequate empirical support.  We utilize a unique research situation, multinational firms sharing a common dynamic operating environment but originating in countries with very different management traditions, to test key aspects of the new institutional theory of organization as applied to network forms of organization.  Using original survey data on 126 U.S.-based, Japan-based, and domestic companies in Thailand, we measure the effect of firm national background on the use of a network form of organization in supply linkages and the effect of linkage characteristics on organizational performance.  We find rather subtle national differences in interfirm linkages and no performance effects to embedded relationships.  These results do not confirm new institutional theory predictions and we speculate on alternate theories that might have greater explanatory power.

 

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