Organizational sustainability, legitimacy, and multinational companies

Abstract

The aim of this book chapter is to anlayze how internationalization of multinational companies affect organiational sustainability. Organizational sustainability has a contrasting perspective with respect to the dual effects of internationalization on sustainability strengths (being good) and sustainability concerns (being bad). On one side, it is discussed that internationalization improves organizational sustainability strengths as multinational enterpreises, which are mainly dependent on foreign sales, are highly motivated to adopt organizational sustainability as a global business norm. Such norm‐conformity overcomes the liability of origin and legitimacy challenge in foreign markets. On the other hand, it is contended that internationalization also increases organizational sustainability concerns because subsidiaries of multinationals are susceptible to being decoupled from the headquarters' organizational sustainability policy.