Session 151

Coevolution of Institutions and Firm Strategy

Track A

Date: Tuesday, October 9, 2012


Time: 11:00 – 12:15


Room: Dressing Room 221

Session Chair:

  • Taco Reus, Erasmus University-Rotterdam

Title: Architectural Resonance and Structural Absorption: Exploring the Mechanisms of Industry Transition


  • Brian Philip Massey, Trinity College Dublin
  • James Quinn, Trinity College Dublin

Abstract: Change has always been linked to strategy. For the strategist, the changing conditions of context form the canvas upon which a strategy must be painted. In particular the nature of industry evolution and architectural transition has perplexed scholars. Traditional evolutionary approaches have drawn from economics and ecology, though mechanisms of change have not been forthcoming. In response to this, we develop a model of industry change using a physical theory of evolution. We identify four evolutionary mechanisms at work: resonance, shift, absorption and entropy. Refining the definition of architecture with an institutional perspective, the interaction of the mechanisms is discussed for firm and industry levels. It is hoped that this framework will allow for further work on architecture, competition and industry evolution as a result.

Title: Becoming a Brazilian Superstar: A Process Perspective on Institutional Capability Development


  • Aline Gatignon, University of Pennsylvania
  • Laurence Capron, INSEAD

Abstract: As part of a broader movement to integrate an institutional perspective to strategy research, scholars have identified a new source of competitive advantage in resources and capabilities that organizations develop in response to their institutional environment. These “institutional capabilities” comprise the organization’s ability to design and implement a coherent response to challenges arising from its institutional environment. However, we still need better answers to these questions: What do institutional capabilities consist of? How do they emerge and evolve? How do they relate to market-based capabilities and provide enduring advantage? We draw on a case study analysis of cosmetic firms and retail banks in Brazil to model institutional capability development as three intertwined stages leading to sustainable competitive advantage: institutional awareness; strategic response; and resource accumulation.

Title: Contested Institutional Change: External Goals versus Internal Performance Feedback


  • Tim Rowley, University of Toronto
  • Andrew Shipilov, INSEAD
  • Henrich R. Greve, INSEAD

Abstract: Institutional entrepreneurs often facilitate the spread of desired practices by advocating new performance goals for organizations, yet little is known about how organizations respond to these goals—especially when the institutional logic underlying the goals is contested. We combine insights from institutional logics and the behavioral theory of the firm to develop a model that addresses how organizations react to such contested goals and also to noncontested profitability goals. We show that Canadian firms either adopted or resisted practices consistent with the logic of board reform as a function of gaps between firms’ aspirations and performance. These outcomes are evaluated in terms of profitability and of a corporate governance performance score devised by institutional entrepreneurs.

Title: Differentiation or Integration: Which Structural Mechanism Supports Which Type of Ambidexterity?


  • Sebastian Kortmann, University of Amsterdam
  • Carsten Zimmermann, University of San Diego
  • Johan Perols, University of San Diego

Abstract: Prior literature emphasizes differentiation and integration as important structural antecedents to organizational ambidexterity. However, empirical research on the relationship between this trade-off and different types of ambidexterity is scarce. Using a survey of 202 top-executives in the United States, we empirically examine the relationships among structural differentiation, cross-functional integration, and different types of ambidexterity. Our structural equation model supports the trade-off between structural differentiation and cross-functional integration as well as their dissimilar influence on organizational ambidexterity. Whereas cross-functional integration facilitates both contextual and innovative ambidexterity, structural differentiation is negatively associated with contextual ambidexterity and positively associated with innovative ambidexterity. Thus, our study confirms the constituting role of structural differentiation in explicating different types of ambidexterity and the positive influence of cross-functional integration on ambidexterity.

All Sessions in Track A...

Mon: 08:00 – 09:15
Session 147: Emerging Market Firms and Complex Institutional Environments
Mon: 09:30 – 10:45
Session 220: Political Strategies in Transition Contexts
Mon: 13:30 – 14:45
Session 221: National Institutions and Firm Behavior
Mon: 16:30 – 17:45
Session 154: Embeddedness, Networks and Non-Market Strategies
Tue: 08:00 – 09:15
Session 153: Cognition, Bounded Rationality and Strategy
Tue: 11:00 – 12:15
Session 151: Coevolution of Institutions and Firm Strategy
Session 152: Institutional Change and Innovation
Tue: 14:15 – 15:30
Session 155: Institutional Transitions and Internationalization Strategies
Tue: 15:45 – 17:00
Session 219: Strategic Responses to Institutional Change
Tue: 17:30 – 18:45
Session 150: Legitimacy, Liabilities and Institutions

Strategic Management Society