Managing Production in a Foreign Environment: An exemplifying study of the managerial practices adopted in FDIs, and their encounter with the customs prevailing in the local institutional environment

Abstract: At the same time as the prevailing outsourcing trend implies loss of control over operations, companies are increasingly held responsible for demeanours throughout their supply chain due to the rising focus on CSR. Vietnam is one of the fastest growing countries in the world and an attractive location for production. Utilising two exemplifying foreign-owned textile factories in Ho Chi Minh City, we depart in an institutional economics perspective and examine the interrelations between the local institutional environment and unaccommodated managerial practises. By mapping local common-practise in terms of six identified instiutional and environmental aspects, we compare the factories' individual conducts with focus on deviations and their effects. We deduce that corporate strategy is the key determinant of optimal conduct and thus complement preceding research by providing an actively prescriptive framework for adaptation of managerial practises based on the local institutional environment.