Journal Press India^®

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Institutional theory is an important framework for various research fields. It gives a general frame of reference as to what constitutes an institution and what are the factors that affect it. However, the theory requires more than a general frame of reference because in today’s world the characteristics of the organizations are changing with the change in factors related as well as unrelated to the processes of organization. In this background, the paper attempts to provide a brief historical overview of institutions, institutionalisation, differences among institutions and institutional environment to unveil the development of institutional theory. It also looks at the application of institutional theory in the context of multinational enterprises. The findings indicate that emphasis of institutional theory has shifted from generalized system of social belief to appropriate means to become legitimate with the pressures. ​

Keywords

Institutional theory; Institutional environment; Institutional mechanism; Multinational enterprises

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