Institutional theory has explained the greater prevalence of many strategic actions by increases in their legitimacy over time, but it has not explained how firms choose among actions backed by competing institutional logics. We address this topic by linking institutional logics with the theory of organizational coalitions and power to predict how such choices are affected both by external influence (through ownership) and by internal influence (through shared decision making). In particular, we analyze how the old state socialism logic and the new market capitalism logic competed to influence Chinese firms' mergers and acquisitions. We find that these institutional logics affected M&A decisions via the coalitions committed to each logic—coalitions whose balance of power reflected the external power source of ownership and the internal power source of board representation. We also find that each coalition's strength changed as the market capitalism logic became more established during China's economic transition, and that investors viewed M&As by firms with high state ownership skeptically.