This paper seeks to develop a theoretical explanation of conflicts and incompatible interpretations of events between agents of multinational corporations (MNCs) and actors present in certain host countries. It aims to situate the argument in comparative economic systems as a part of a broader social system. The socio‐economic system can be modeled using institutional theory, particularly using Scott's three pillars and the concept of formal and informal institutions. Within different socio‐economic systems a dominant logic is developed, and this becomes internalized among actors and agents as behavioral scripts.
The paper uses a multi‐level and multi‐disciplinary conceptual analysis, developing a model of dominant logic and behavioral scripts with MNC agents and traditional emerging economy actors.
MNC agents and traditional emerging economy actors have difficulty comprehending the logic of the other, creating a fertile context for conflict.
An ideal type template is developed that can be used for empirical investigations focusing on situations where disagreement and conflict occur when MNCs operate in traditional emerging economies.
By integrating the authors' conceptualization into training for expatriate managers, the potential for conflict can be reduced.
This multi‐level and multi‐disciplinary model allows grounded development of understanding of conflicts or potential conflicts in the MNC agent‐traditional emerging economy actor context.
