Abstract
This paper examines the effects of organizational culture and national cultural distance between the headquarters and the subsidiary on the adaptation of management innovations in multinational enterprises (MNEs). Data on Total Quality Management (TQM) implementations were collected from a sample of 126 MNEs operating in Saudi Arabia and analyzed using fuzzy-set qualitative comparative analysis (fs-QCA). The findings highlight the critical roles that national and organizational cultures jointly play in the adaptation of a management innovation. The results suggest that different configurations of organizational culture and national cultural distance result in different levels of fidelity and extensiveness of the implementation when management innovations are transferred from MNE headquarters to subsidiaries. More specifically, our findings show that a greater level of national cultural distance is not necessarily a barrier to the transfer of a management innovation within an MNE and that the organizational culture can offset the effect of national cultural distance.