Institutional Plurality and U.S. Corporate Climate Change Strategies

• This paper contributes to the literature on institutional plurality by examining how domestic and foreign institutions interact to shape corporate strategies. Our argument suggests that institutional plurality lead to both complementarities that encourage firms to pay attention to an issue and develop soft strategies such as management incentives, and fragmentation which makes firms more likely to avoid or postpone the adoption of hard strategies that require higher levels of commitment like formal plans. The hypotheses are tested in an empirical analysis of the influences of domestic and foreign institutions on the likelihood that U.S. corporations use soft and hard climate change strategies. While institutions in general increase the likelihood that firms engage in both forms of climate change strategies, we find that firms with experience from both state-level emission targets and the EU Emission Trading Scheme are less likely to develop formal plans than firms with sole experience from one of the two institutional contexts. This finding stresses the value of a contextualized theory of institutional influences which takes into consideration the spatial distribution of institutional pressures and the level of organizational commitment required by different strategic responses. We demonstrate that organizational passivity can be an unintended consequence of situations governed by multiple regulatory initiatives, which each seeks to increase the level of organizational action.

Subject headings

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Företagsekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Business Administration (hsv//eng)

Keyword

Institutional plurality

corporate strategy

climate change

Business studies

Företagsekonomi

Publication and Content Type

vet (subject category)

kon (subject category)