An extended view of institutional domains and implications for the multinational enterprise

In this chapter, we examine and expand institutional theory. While acknowledging that actors and organizations interrelate in an institutional (legal, political and socio-economic) framework and that this interaction between them shapes economic activities (North, 1990; Scott, 1995), we argue that the boundaries of today's institutional environments have significantly evolved. They encompass not only the traditional domains of micro (individual/organization) and macro (nation-state) levels as well as of a co-located physical environment captured by received institutional theory but also an added dimension that transcends physical space. This new dimension includes a dispersed, borderless environment that invisibly cuts across nation-states. We discuss the implications of this extended view of institutional domains for theory and practice.