Industry Identity in an Oligopolistic Market and Firms’ Responses to Institutional Pressures

Abstract

This study sought to explain the puzzle of firm noncompliance under conditions of highly salient and coercive institutional pressures from stakeholders. Based on a qualitative study of the Canadian banking industry’s responses to institutional pressures from government, clients, and the media for higher-quality banking service to small and medium-size enterprises (SMEs), results revealed that oligopoly power could not account exclusively for firms’ dismissiveness of salient stakeholder expectations. We introduce the concept of industry identity to explain how market power interacted with industry identity to predict firms’ nonconformity to institutional pressures and their willingness to maintain identity–image misalignment. Our study contributes new insights into theories of institutional conformity, identity, and oligopoly behavior.

Field or Fields? Building the Scaffolding for Cumulation of Research on Institutional Fields

“…Within exchange fields, populations, rather than the full set of field members, are more likely to share practices and norms, common meaning systems and references to a common identity (Dhalla & Oliver, 2013). Mimetic forces apply to populations within exchange fields because the relatively homogenous actors in populations share environmental vulnerabilities and demands for legitimacy from the same regulators, similar customers, suppliers, demand conditions, etc.…”

A Micro-institutional Inquiry into Resistance to Environmental Pressures

“…Second, a reinvigorated commitment to explaining variations in resistance to adopting organizational practices (e.g., Dhalla & Oliver, 2013;Pache & Santos, 2010) is warranted for both practical and theoretical reasons. From a practical perspective, whether isomorphic templates for organizing are adopted by an organization can have major implications not only for that organization's social evaluation but also for its technical efficacy and differentiation from competition, with deviating organizations often outperforming conformers in terms of profitability (Barreto & Baden-Fuller, 2006;Meyer & Rowan, 1977;Zucker, 1987).…”

Resistance strategies through the CEO communications in the media

“…Although the management of legitimacy is an ongoing process (Oliver 1991, Suchman 1995, little attention has been paid to the defence of organisational legitimacy following controversial issues (Lamin and Zaheer 2012). In addition, we have limited insight concerning how companies in oligopoly markets, taking into account their considerable economic power, respond to institutional constituents (Dhalla and Oliver 2013). In practical terms, this study intends to be useful to researchers and accounting professionals, auditors and regulators.…”

“…For the CEO of EDP, the issue of excessive rents was a false problem, in accordance with Marcus and Goodman (1991), Elsbach (1994), and Dhalla and Oliver (2013). Before the incommensurability of the interests of the main actorsshareholders, the government and society in generaland their differential influence, supporting the argument of Neu et al (1998) and Bozzolan et al (2015), EDP chose at the first moment to challenge and reject the demands of both the government and society in order to attend those of shareholders.…”