It is of strategic importance to MNEs that their subsidiaries achieve consistently high CSR performance levels that reflect the aspirations of the headquarters, as this helps minimize reputation risks that could adversely affect the MNE as a whole. However, subsidiaries’ CSR performance in practice can and does diverge significantly from that of headquarters. Research on headquarters-subsidiary relationships typically explains divergent performance outcomes in terms of headquarters’ ability to exercise power. Yet this perspective may be insufficient for complex, multifaceted and context-specific strategy domains like CSR, where headquarters must rely on subsidiary managers’ perceptions and interpretations in order to implement strategy effectively. To address this gap, we integrate arguments from institutional logics and social identification to theorize about the role of headquarters’ CSR logic and the moderating effects of subsidiary managers’ social identification. Analysis of a global sample of 74 MNE-subsidiary dyads over 12 years shows that subsidiaries’ CSR performance convergence is a function of the strength of the headquarters’ CSR logic, and that this relationship is amplified by the subsidiary manager’s identification with the MNE, but attenuated by identification with the MNE’s home country and the CEO. Our findings contribute to research on global strategy, institutional logics, and international CSR.
