Response Strategies: A Challenge and Further Development of Oliver's (1991) Model About Strategic Responses to Institutional Processes

Amanda Nissen Sandager

Student thesis: Master thesis

Abstract

Organisations are under constant pressure, from both internal and external stakeholders. How organisations work with and respond to these pressures is a debated topic in the academic world. A conceptual contribution to this discussion is Christine Oliver's article, Strategic Responses to Institutional Processes (1991). In this article, Oliver develops a model for the response strategies and tactics organisations use, when experiencing institutional pressure. These strategies vary from passive adaptation to active resistance. Organisations face increasing pressure in relation to their sustainability efforts. To a great extent, this pressure stems from the global work for sustainable development and the UN Sustainable Development Goals (hereinafter “SDGs”). These SDGs do not represent direct guidelines for how organisations should act. Instead, the rather broad, vague and universal nature of the goals aims to encourage organisations to define their own sustainability efforts towards reaching these common goals. This thesis argues that Oliver’s model does not fully capture how organisations can work with the increasing sustainability pressure. By analysing the exemplary case company’s - Grundfos - response to and work with the SDGs and the sustainability pressure, it has been possible to identify the deficiencies of the model. The results show that Grundfos is attempting to obtain a leading position in the discussions about corporate responsibility, and hereby influence the requirements and expectations for itself and its peers. Grundfos’ strategic response to institutional pressure was thus neither active resistance nor passive adaptation to the pressure. This thesis defines Grundfos’ strategic response as an ownership strategy in which the company attemptsto take ownership of the institutional pressure, thus increasing the pressure on all companies within the industry to the advantage of the company. This way of constructively developing the pressure was not included in Oliver’s model. Therefore, this thesis argues that Oliver's model has shortcomings in terms of her views on companies and their opportunities to constructively influence the pressure placed on them. It is argued that companies have both the opportunity to resist pressure or actively develop pressure. How companies work with institutional pressure depends on several factors including the organisation’s size and how it organises the environmental changes. Consequently, it is argued that Oliver’s model does not lack a single response, but a continuum of strategic responses, of how companies can actively and constructively work with pressure. By adding a new dimension to Oliver's model, the model now includes the ownership strategy used by Grundfos, but also proposes other forms of constructive strategic responses based on companies’ organization of the institutional pressure.

EducationsMSc in Business Administration and Organizational Communication, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2020
Number of pages86
SupervisorsLars Thøger Christensen