No.228 Perceived Home and Host Country Institutional Environment Pressures by Bilateral Development Cooperation Agency's Constituents

Neo-institutional theorists assert that institutional environments control organisational behaviour. They have extensively researched private multinational corporations (MNCs) but have scarcely touched public sector organisations. Prior studies have also tended to overlook the heterogeneity of constituents. The current study examines how four distinct groups of bilateral development cooperation agency (BDCA) staff (Headquarters [HQ] management, HQ non-management, overseas offices [OOs] management, and OOs non-management) perceive institutional environment pressures from home and host countries.

For this, the author developed six hypotheses and then statistically tested them. Data were obtained through an online survey primarily using a five-point Likert scale (strongly disagree=1, disagree=2, neutral=3, agree=4, strongly agree=5). 131 valid responses were analysed by the Mann–Whitney U test. The results showed no statistically significant differences between the horizontally distant groups in perceived institutional environment pressures. Both the HQ and the OOs staff felt an identically powerful home country accountability pressure (Md=5 for both). Host country government and technical cooperation project counterpart expectation and demand pressures were modest for both the HQ (Md=3 and Md=3) and the OOs staff (Md=3.5 and Md=3). Meanwhile, significant differences were identified in perceived home country accountability pressure by the HQ management and the HQ non-management staff (p<.01) and in perceived host country government expectation and demand pressures by the OOs management and the OOs non-management staff (p<.05). The OOs staff, both management and non-management, perceived a dual institutional environment pressure or what Kostova and Roth (2002) call 'institutional duality' (Md=4). The perceived level of institutional duality marginally differed between the OOs management and the OOs non-management staff (p=.11).

These findings, seen through the lens of a neo-institutionalist perspective, suggest that OOs prioritise legitimacy to the home country’s accountability pressures over host countries’ requirements and demand pressures. Powerful institutional environment pressures perceived by management staff may even strengthen the OOs’ legitimacy-driven behaviour towards their home country.

Keywords: Institutional duality, perceived institutional environment pressures, accountability, neo-institutionalism, international development, global projects, development agencies, management and non-management, public sector organisations