Abstract

Multinational enterprises (MNEs) must often address moral conflicts given their responsibilities to meet conflicting demands from diverse stakeholders in transnational operations. Thus, this study constructs a comprehensive theoretical framework to understand the co-evolution between MNEs’ ambidexterity strategies and moral conflicts by incorporating studies on institutional theory and strategic management. Through a longitudinal case study, we find that the balance of three dimensions of ambidexterity strategies influences the content and intensity of MNEs’ moral conflicts by shaping the dual structure of stakeholders from home and host countries. Further, moral conflicts reshape the balance of ambidexterity strategies by the pressure of legitimacy and performance. Hence, to achieve better performance in transnational operations, MNEs must not only pay attention to the contingent ambidexterity strategies in dynamic environments, but also leverage the fitness among different dimensions of ambidexterity strategies. The findings provide implications for MNEs’ transnational operations in the increasingly complex global business.