Purpose - The purpose of this paper is to critically review and explore how organizations knowledgeably respond to unfavorable institutional environments that exert institutional pressures and thereby limit their decision-making and eventually their actual behavior.
Design/methodology/approach - Based on a thorough structuration and analysis of the literature in management and related fields, the authors present a comprehensive synthesis of organizational knowledgeable responses to institutional pressures.
Findings - Based on the review, the authors categorize organizational knowledgeable responses into three major types - passively responding to avoid non-conformity, reactively mitigating institutional pressures and proactively developing institutional environments toward less interfering setups.
Research limitations/implications - The authors discuss the enabling conditions for the categorized organizational knowledgeable responses as well as limitations to their application. They identify research gaps and formulate research questions to offer promising avenues for future work. The authors expect this detailed synthesis to lay the framework for investigating how the knowledge-based view of the organization influences its knowledgeable response to institutional pressure.
Practical implications - The authors elaborate on distinct passive, reactive and proactive strategies, which firms can apply to cope with institutional pressures. The contribution of this study will be of relevance to practitioners managing organizations in the face of unfavorable institutional setups, as well as to policymakers engaged in the development of institutions and interacting with affected organizations.
Originality/value - This study provides a valuable overview on developments in institutional theory, particularly on contributions to the "nascent literature" that examines heterogeneous organizational knowledgeable responses to institutional pressures.
- Literature review
- Institutional theory
- Institutional pressures
- Organization knowledgeable responses
- Paradox of embedded agency