Our concern here is to develop a model and testable hypotheses concerning the interorganizational decision making process involving the multinational firm and the nation state. This objective evolves from our work in a neonate field of the applied behavioral sciences we call social architecture, defined as the art, discipline, and science of building and/or renewing society's indispensable institutions which are both viable and legitimate from the view of the institution's various claimants.1 The multinational corporation is a fascinating new setting for the testing of a theory of the social architecture of worldwide institutions. 2
A number of observers have suggested that as multinational firms grow in size and influence, they will be perceived by the host nation states as threatening and intrusive. 3 Even though the managerial and technological capabilities of multinational firms might be attractive for host countries, the domain in which this kind of firm is growing could be construed as belonging to the "sovereign nation state." Since the decisions of a multinational corporation involve the host country's physical and human resources, political decision makers are aware of their dependence on a foreign firm's decision makers. The social architectural issue thus becomes: How do multinational firms legitimize the use of a nation state's resources? The joint decision making process between multinational firm and nation state is of central importance.