Strategic Responses of MNCs to Institutional Changes A Case Study of Volvo Group and the Make in India Initiative

Sammanfattning

This study examines how Volvo Group, a multinational with a long history in India, understood and responded to the Make in India initiative, a governmental policy aiming at boosting domestic manufacturing and attracting foreign investments. The study is based on a qualitative case study of Volvo Group’s response to the initiative and makes use of interviews and secondary sources like policy papers and publicly available information about the firm. Using Oliver’s (1991) framework of strategic responses, the study aims to understand how multinational firms perceive and respond to institutional pressures caused by changes in their institutional environment. The findings reveal that the initiative was perceived as a positive support framework that enhanced India’s credibility and attractiveness for multinationals to invest and expand. On the response side, the firm proceeded in expanding their operations in multiple verticals, gradually increasing their localization and exports and engaging more actively with local stakeholders. This combination of responses reflects what Oliver’s (1991) framework defines as acquiescence and compromise. The study provides insights into how MNCs are shaping their strategies when responding to institutional changes, while accounting for both direct policy shifts and changes in the wider environment into which they operate.