Chance or genius?: A garbage can exploration of the institutionalisation of sustainability reporting in the Netherlands

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Chance or genius?: A garbage can exploration of the institutionalisation of sustainability reporting in the Netherlands
ETDW, June 25-26 2015

Cardiff, Wales

Work in progress, please do not cite without permission

Koen van Bommel

Department of Management & Organization

VU University, Amsterdam

De Boelaan 1105

1081 HV Amsterdam, the Netherlands

André Spicer

Cass Business School

City University, London

106 Bunhill Row

London EC1 8TZ, UK

In this article we question the dominant assumptions of institutionalisation and change being smooth and linear processes driven by a single heroic institutional entrepreneur blessed with great foresight and purpose. Instead we combine institutional theory with the theoretical lexicon of the garbage can model to offer an alternative interpretation of an institutional story, in particular fitting for pluralistic practices in a relatively emerging, uncertain and heterogeneous field. We illustrate this by drawing on the rise of Dutch sustainability reporting and examine how the oftentimes collective and serendipitous interplay between problems, solutions, decision makers and decision moments shapes social order and institutions. We argue that sustainability reporting’s development resembles a more collective form of institutional entrepreneurship as a range of actors muddled through and were involved in the enactment of historical contingencies that enabled action and change as problems, solutions, and participants were momentarily matched. Overall, rather than negating the role of human agency by strategic and intentional actors we seek to nuance and relax some dominant assumptions. By offering an alternative interpretation through a lens that specifically makes room for the role of serendipity, timing, collectiveness and context we question the relatively neat and teleological assumptions of many studies on institutionalisation and change. This trajectory of the enabling role of chancelike contingencies in relation to subsequent institutional work of a plurality of actors leading to institutional change opens up avenues for further theorisations on institutional processes in complex environments.

To study the laws of history we must completely change the subject of our observation, must leave aside kings, ministers, and generals, and study the common, infinitesimally small elements by which the masses are moved. No one can say in how far it is possible for man to advance in this way towards an understanding of the laws of history; but it is evident that only along that path does the possibility of discovering the laws of history lie”

(Excerpt from Tolstoy’s “War and Peace”, 2001: 653)

Sometimes there's a man, I won't say a hero, because what's a hero? But sometimes there’s a man. ... Sometimes there's a man who, well, he's the man for his time and place, he fits right in there”.

("The Stranger" in The Big Lebowski)

    1. Introduction

Sustainability reporting, or “reporting which covers the environmental and social aspects of an organisation’s performance as well as the economic aspects” (Hubbard, 2009: 3), has grown from being marginal in the late 1980’s (Kolk, 2004) to a current situation in which over 6000 firms disclose a broad set of non-financial information in reports, according to the reports directory of (2013), and 93% of the world’s largest 250 companies publish a report (KPMG, 2013). This rise of reporting has led some scholars to regard sustainability reporting as a case of institutionalisation (Brown, de Jong, & Lessidrenska, 2009; Etzion & Ferraro, 2010; Kolk, 2010; Larrinaga-González, 2007), i.e. it has become an increasingly normalised and taken-for-granted form of social behaviour upon which organisations routinely act (Barley, 2008; Hoffman, 1999; Jepperson, 1991). This development is interesting considering sustainability reporting’s position as a pluralistic practice that aims to bring together economic, social and environmental aspects in a relatively uncertain and fragmented field. In this paper I ask how sustainability reporting’s development amidst this complexity can be explained and thereby draw on insights from institutional theory and the garbage can model. I aim to provide an alternative interpretation of processes of institutionalisation and change that relaxes some dominant assumptions of individualism and intent prevalent in much extant work.

For some time researchers have started to puzzle over how institutions arise and change by focusing on the role of agency and actorhood (e.g. Battilana, Leca, & Boxenbaum, 2009; Dacin, Goodstein, & Scott, 2002; DiMaggio, 1988; Garud, Hardy, & Maguire, 2007; Lounsbury & Crumley, 2007; Maguire, Hardy, & Lawrence, 2004), epitomised more than anything by the stream of studies on institutional entrepreneurship (Battilana et al., 2009; Garud et al., 2007; Hardy & Maguire, 2008). This literature typically focuses on “the activities of actors who have an interest in particular institutional arrangements and who leverage resources to create new institutions or to transform existing ones” (Maguire et al., 2004: 657). This works, for instance, through creating a persuasive vision for change, assembling cultural, cognitive and material resources as well as mobilising allies and opportunities for change (see e.g. Battilana et al., 2009; Garud et al., 2007; Garud, Jain, & Kumaraswamy, 2002; Pacheco, York, Dean, & Sarasvathy, 2010). These studies would typically explain sustainability reporting’s institutionalisation by combining the interrelated assumptions that 1) a limited number of coordinated individual and organizational actors (institutional entrepreneurs) are 2) endowed with concentrated (strategic) agency and 3) characteristically aim to create or change institutions with an almost heroic foresight and purpose, thereby making institutional processes look a rather mechanistic, linear and almost teleological affair (see e.g. Blackler & Regan, 2006; Delbridge & Edwards, 2008).

These assumptions may indeed hold as long as issues are not too complex and take place in fields that are not very fragmented and at least moderately institutionalised (see e.g. Dorado, 2005). Sustainability practices such as sustainability reporting, however, are salient examples where this is normally not the case (Whiteman, Walker, & Perego, 2013) as these are typically more pluralistic practices linked to complex social problems in relatively emerging, uncertain and heterogeneous fields where cause-effect relations remain unclear. Extant work often offers too simplified a picture for such cases making them hard to adequately explain (Czarniawska, 2009; Dorado, 2005; Greenwood, Raynard, Kodeih, Micelotta, & Lounsbury, 2011; Wijen & Ansari, 2007). Some recent work has therefore started to problematise the assumption of concentrated agency of single actors and shown how it undermines the collective work undertaken by distributed actors (see e.g. Czarniawska, 2009; Delbridge & Edwards, 2008; Dorado, 2005; Wijen & Ansari, 2007). This work focuses on the “process of overcoming collective inaction and achieving sustained collaboration among numerous dispersed actors to create new institutions or transform existing ones” (Wijen & Ansari, 2007: 1079). Despite relaxing the assumptions of the intentionally strategic individual entrepreneur, most studies still maintain an unrealistic “heroic”, teleological and visionary flavour though that warrants further problematisation (see e.g. Aldrich, 2011; Czarniawska, 2009; Lounsbury & Crumley, 2007).

Cziarniawska (2009: 438) in this respect coined the analogy of portraying institutions as ‘anthills’. She notes that an “anthill is not a building erected according to a plan; it is a practice of long standing, taken for granted by the ants ... and can be built only in specific places where specific materials are available, and at specific times”. In short, historical contingencies, or the oftentimes arbitrary but forgotten, neglected or silenced historical events that have a constraining effect on institutional trajectories, are flagged up in addition to the obvious collectivity of ants. She interestingly hints at the garbage can model (Cohen, March, & Olsen, 1972; March & Olsen, 1976) as a lens that “purposefully dramatized” these more serendipitous aspects. This model views “organizational life as highly contextual, driven primarily by timing and coincidence” (Olsen, 2001: 193). It has at its core a concern for behaviour in a complex and uncertain environment where social order or institutions emerge through an unstructured, loosely-coupled and serendipitous interplay between problems, solutions, decision makers and decision moments. An institutional interpretation along these lines rests in its potential that it allows for a compromise between “simple renderings of history that are inconsistent with reality and complex renderings that are inconsistent with human capacities for comprehension” (March & Olsen, 1998: 969).

In this study I empirically analyse the historical trajectory of sustainability reporting in the Netherlands and its gradual institutionalisation. As the institutional environment in today’s global organisational landscape is increasingly characterised by complexity and pluralism (e.g. Bromley & Powell, 2012; Greenwood et al., 2011), combining institutional theory and the garbage can model can help to explain how institutionalisation and change function in such circumstances. Based on 94 interviews and secondary data sources I qualitatively explore how against a background of historical contingencies a plurality of dispersed actors muddled through in the institutionalisation of sustainability reporting. I reveal that in addition to the purposive work that certainly took place, the institutional processes contained many similarities with more uncertain and ambiguous garbage can processes which help us to better understand institutionalisation and change in a less teleological and more realistic light.

With this study I make the following two broad contributions. First, I build on existing work on the process of institutional entrepreneurship and change (e.g. Battilana et al., 2009; Greenwood, Suddaby, & Hinings, 2002). In particular by relying on the garbage can model I consider the importance of historical contingencies as possible enabling factors of institutional change. I thereby also relax the dominant assumptions of intentionality and purpose (see Aldrich, 2011; Blackler & Regan, 2006; Czarniawska, 2009) and question the portrayal of institutional entrepreneurship as a teleological deterministic process. Second, I empirically extend the few existing accounts of the role of distributed agency in institutional change (e.g. Delbridge & Edwards, 2008; Dorado, 2005; Lounsbury & Crumley, 2007; Quack, 2007; Wijen & Ansari, 2007), thereby challenging the dominant notion of the heroic individual institutional entrepreneur. More precisely, the garbage can lexicon of problems, solutions and participants floating in a system and getting temporarily fixed around choices helps to explain how collective institutional action takes shape. It highlights, again, the importance of oftentimes serendipitous events and shows how actors muddle through, sometimes more and at other times less strategically and intentionally and together assemble a meaningful collage that matches chancelike events with the needs of the moment.

The outline of this paper is as follows. First, I will discuss aspects of the literature on the role of agency in institutional change and in particular extant work on institutional entrepreneurship and more collective forms of this through distributed agency. I subsequently examine the oftentimes purposive and structured depiction of institutionalisation and change and the relative absence of its inevitable serendipitous and historically contingent facets. I consider how insights from the garbage can model can add to our understanding of institutional change. Next, I will discuss my empirical case and methods of data collection and analysis used. After presenting my findings I will discuss their implications for the institutional literature and propose possible areas for future research.

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