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Business Research for Business Leaders
18 Sep 2014Working Paper Summaries

Institutional Strategies in Emerging Markets

by Christopher Marquis and Mia Raynard
In an increasingly complex and integrated global economy, a significant challenge for organizations is navigating institutionally diverse contexts—each posing a different set of opportunities and challenges. To help provide guidance, this paper brings together diverse streams of research under the conceptual umbrella of "institutional strategies." Institutional strategy means the comprehensive set of plans and actions directed at leveraging and shaping the sociopolitical and cultural institutions within an organization's external environment. This article maps the field of research on institutional strategies, and highlights potential avenues for future research. As the review shows, there has been a biased selection and focus in current research—namely, a disproportionate emphasis on developed markets. This raises some concern regarding the applicability of current models and theoretical toolkits in the context of emerging markets. To address this concern, the authors offer up a comprehensive framework of institutional strategies that not only provides a more realistic account of the diverse institutional conditions that organizations confront, but also highlights the importance of expanding the current focus from developed markets to a more global perspective. Key concepts include:
  • Research in emerging economies should feature more prominently in organizational studies as we move forward.
  • This review aims to encourage scholars to challenge and test existing theories, and to engage in more fruitful cross-disciplinary dialogue.

Author Abstract

We review and integrate a wide range of literature that has examined the strategies by which organizations navigate institutionally diverse settings and capture rents outside of the marketplace. We synthesize this body of research under the umbrella term institutional strategies, which we define as the comprehensive set of plans and actions directed at strategically leveraging and shaping the socio-political and cultural institutions within an organization's external environment. Our review of institutional strategies is focused on emerging market contexts, settings that are characterized by weak capital market and regulatory infrastructures and fast-paced turbulent change. Under such challenging conditions, strategies aimed at shaping the institutional environment may be especially critical to an organization's performance and long-term survival. Our review reveals that organizations engage in three specific and identifiable sets of institutional strategies, which we term relational, infrastructure-building, and socio-cultural bridging. We conclude by highlighting fruitful avenues for cross-disciplinary dialogue in the hope of promoting future research on emerging markets and defining the next frontier of institutional theory in organizational analysis.

Paper Information

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