The Interplay of Conflicting and Complementing Institutional Logics in Sustainability Practices.

Date01 Junio 2023
AuthorMilosevic, Ivana

1 Introduction

The international business literature has recognized the important role institutions play in cross-country variation of sustainability practices (Aragon-Correa et al., 2020; Doh & Guay, 2006; Fransen, 2013; Marano & Kostova, 2016). For example, Ioannou and Serafeim (2012) highlighted that variation in national-level institutions significantly impacts an organization's sustainability performance, while Tashman and et al., (2019) found that more developed host countries impose greater pressures on organizations to adopt sustainability practices. This line of research views institutions as higher-order structures (Zilber, 2016) that drive isomorphism among organizations (i.e., organizations within a particular institutional environment adopt similar sustainability practices, Martinez-Ferrero & Garcia-Sanchez, 2017) or investigates how organizations decouple from these pressures (i.e., organizations engage in sustainability ceremoniously (Bromley & Powell, 2012).

In relying on a neoinstitutional lens (DiMaggio & Powell, 1983; Meyer & Rowan, 1977), the current literature tends to overemphasize firms' choices and related practices while underestimating the significance of the institutions themselves as well as how they shape sustainability practices at the individual level. This is an important omission as the institutional logics literature suggests that institutional environments consist of multiple, complex, only sometimes complementary, often conflicting, and sticky logics (Durand & Thornton, 2018; Reay & Hinings, 2005; Thornton, 2002), requiring individuals to navigate them through hybridization (Jay, 2013), segmenting, bridging, and demarcating (Smets et al., 2015); and resisting (Reay & Hinings, 2005) among others. Despite this insight, how these multiple complex institutional logics distinctly shape individual sustainability practices across countries remains undertheorized (Fransen, 2013; Silva & Figueiredo, 2017).

Our study aims to address this gap by developing a multilevel model that illustrates how institutional logics distinctly shape sustainability practices at the individual level. To do so, we conducted a comparative case study of two energy producers (high-hazard organizations) in two national contexts: a developed economy (Canada) and an economy in transition (The Republic of Serbia, Serbia). We specifically focused on energy producers for two reasons. First, energy producers are high-hazard organizations due to both their dependence on natural resources for operations (i.e., hydrocarbons/freshwater) as well as their potential to create hazardous events in surrounding communities (Demers & Gond, 2020; Leveson et al., 2009; Milosevic et al., 2018). Given this, sustainability concerns are highly visible in this context, allowing a more nuanced understanding of how sustainability is practiced (Demers & Gond, 2020; Frynas, 2010). Second, by exploring our research question in two energy producers in two countries with a similar focus on sustainability but differing cultural contexts, we were positioned to uncover the interplay of multiple logics and how that interplay distinctly shapes sustainability practices at the individual level.

In doing so, we offer two main contributions. First, our findings contribute to the international business literature by illustrating how (and when) logics complement and conflict and, as a result, how individuals comprehend sustain-ability practices. We empirically demonstrate that individuals disaggregate elements of multiple logics (Lounsbury et al., 2021; McPherson & Sauder, 2013), pulling down some elements while discarding others to construct meso-level logics relevant to their sustainability practices. We also illustrate how this process differs across countries. In doing so, our findings also point to the "stickiness" of logics (Kroezen & Heugens, 2019; Waeger & Weber, 2019), where the relevance of the logic endures long after it has been replaced. This elicits suspicion of the current institutional environment, and individuals construct alternative logics to reconcile experienced conflicts among logics.

Second, in venturing deeper into this process, our findings contribute to the sustainability literature by illustrating how sustainability operates inside the organization (Hengst et al., 2020; Silva & Figueiredo, 2017). We show that individuals embed different elements of institutional logics within sustainability practices, rendering them comprehendible (Martin, 2011) via two mechanisms: aligning and relating. Aligning entails comprehending sustainability practices through congruence between sustainability meanings and meanings imposed through relevant institutional logics--the community logic in Serbia and the professional logic in Canada. Relating entails embedding the elements of high-hazard organizational logics into sustainability practices, thus comprehending them as appropriate to lessen the impact of potential hazards. In doing so, our findings provide insight into how sustainability is practiced at the individual level in the face of imminent hazards. The result of our work is a general model and a country-specific model depicting how individuals embed multiple institutional logics into their sustainability practices. We discuss the relevant theoretical background next.

2 Theoretical Background

Sustainability in organizations has become an increasingly important global concern receiving attention within management studies (Ferraro et al., 2015; Reinecke et al., 2012), international business (Kolk & Van Tulder, 2010; Strike et al., 2006), and business ethics (Kok et al., 2019; Van Marrewijk & Werre, 2003), among other disciplines. Given its diffuse nature across multiple fields of inquiry, sustainability has numerous definitions, but all are oriented toward organizations attending inter-dependently to financial, social, and environmental objectives (Kok et al., 2019). Indeed, Valente (2012, p. 568) calls for "the integrity of multiple social and ecological systems [as] embedded equitably and interdependently," and Montiel (2008, p. 259) suggests that "the economic, social, and environmental pillars are interconnected." To this end, the literature has focused on the drivers of sustainability or why organizations engage in sustainable practices (Ioannou & Serafeim, 2012; Tashman et al., 2019).

Relevant to this study, scholars have pointed to the important impact of the institutional environment on organizations' sustainability practices either by driving isomorphism among organizations within the same country (Ioannou & Serafeim, 2012; Matten & Moon, 2008; Tashman, 2021) or facilitating decoupling processes (Bromley & Powell, 2012; Fransen, 2013; Hengst et al., 2020). For example, Ioannou and Serafeim (2012) find that institutional variation in a country's political, cultural, labor and education systems impacts an organization's sustainability practices. Conversely, studies have suggested that organizations decouple from these pressures, resulting in variations in sustainability practices (Haack & Schoeneborn, 2015). Decoupling occurs when the organization embraces sustainability to gain legitimacy from stakeholders but does so in largely symbolic ways, separate from their dominant strategic pursuits (Bromley & Powell, 2012; Crilly et al., 2016). Despite these insights, how multiple institutional prescriptions inform the comprehension of sustainability practices at the individual level across contexts remains undertheorized. This is highly important for the continuous advancement of sustainability objectives because, as Silva and Figueiredo (2017, p. 1-2) point out, "sustainability relies on the practice of the agents in daily life, in the regular course of operations" rather than on structures imposed by organizations and governments.

To understand how different institutions shape sustainability practices at the individual level, we borrow from institutional logics literature which has provided important insight into how field-level processes shape individual-level actions (Durand & Thornton, 2018; Friedland & Alford, 1991; Lounsbury et al., 2021; Thornton et al, 2012). This perspective provides a framework for analyzing "the interrelationships among individuals, organizations, and institutions in social systems" (Durand & Thornton, 2018, p. 632) and thus is an appropriate lens to examine how multiple logics, and in particular, changes in logics and their interconnections, shape sustainability practices as observed in our study. We discuss this next.

Institutional logics form the underlying, taken-for-granted assumptions that actors within a particular institutional context share and, in doing so, provide templates individuals use to organize their activities and interpret material and symbolic cues for appropriate behaviors (Kyratsis et al., 2017; Lounsbury et al., 2021; Thornton et al., 2012). More specifically, they define "the appropriateness of organizational practices in given settings" (Greenwood et al., 2010, p. 522), which enables individuals to alter the boundaries and requirements of their practices by connecting them to relevant logics (Abdelnour et al., 2017). In this way, institutional logics may provide needed guidelines to individuals on how to perform their work in a way that enhances its positive social and environmental impacts (Wrzesniewski & Dutton, 2001).

Central to this argument is that logics may enable agency in individual actions by not just rendering them "intelligible and appropriate" but also by clearly fitting them "into sequences of action that make sense in the context of performing a given set of practices" (Lounsbury et al., 2021, p. 270). More specifically, each institutional logic embodies principles that provide individuals with the necessary vocabularies to elaborate on and use to their advantage (Friedland & Alford, 1991; Kyratsis et al., 2017; Steele, 2021; Thornton & Ocasio, 2008)...

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