University of Amsterdam – Faculty of Economics and Business
MSc. in Business Studies – International Management
Institutional entrepreneurship in sustainable industries :
How MNEs influence the creation of novel institutio ns
Master Thesis
Final V ersion
Katharina Maria Thell
10999604
First Supervisor: Francesca Ciulli, MSc
Second Supervisor: Dr. Michelle Westermann-Behaylo
Statement of originality
This document is written by Katharina Maria Thell who declares to take full responsibility for the contents of this document.
I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its reference have been used in creating it.
The faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.
Acknowledgements
I would like to express my sincerest gratitude to my parents, who supported me
unconditionally throughout my studies, providing me with the strength and motivation to achieve this degree. The completion of this thesis would have never been accomplished without them.
Furthermore, I would like to thank ‘the argonauts’ – Andrea Casciaro, Filippo Benetello, Igor Petrenko and Tess Vorenkamp – for the constant support and encouragement throughout this master study as well as for the precious memories we created.
I am thankful to my supervisor, Professor Francesca Ciulli, for her guidance and expertise as well as constructive assistance and patience throughout the whole process of writing this thesis.
Table of content
Abstract……….………. 1 1. Introduction……… 2 2. Literature review……… 5 2.1 Institutional Theory………... 6 2.2 Institutional change….………...……... 8 2.3 Institutional entrepreneurship………..… 102.4 MNEs and institutional entrepreneurship……… 16
2.5 Institutions in emerging and developed countries………... 19
2.6 Sustainable industry and institutional entrepreneurship……….. 23
2.7 Theoretical framework……… 25
3. Methodology………...…. 29
3.1 Research Design………..…… 30
3.2 Case Selection………. 32
3.2.1 Sustainable energy overview……….… 32
3.2.2 Wind energy overview………..… 34
3.2.3 Enercon GmbH……….………. 37
3.3 Data Collection……… 40
3.4 Data Analysis…………...……….………..……… 42
4. Results ……...………..………… 44
5. Discussion……… 55
6. Academic and managerial implications………..……. 62
7. Conclusion………...……… 68
References……… 71
Index of tables and figures
Figure 1: Proportion of electricity generated from renewable sources per country………… 34
Figure 2: Annual development of electricity generated from renewable energy in Europe… 35 Figure 3: Global market share of wind turbine manufacturers by 2015…………...……… 36
Figure 4: Market share of wind turbine manufacturers in Germany………... 37
Table 1: Overview of the Enercon cases……….… 40
Table 2: Overview of interview partners……….……… 41
Table 3: Codes adopted for data analysis……… 43
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Abstract
Management scholars have long focused on the influence of institutions on the multinational enterprise (MNE). In line with a new stream of research in new institutionalism this paper sheds light on the opposite relationship. Based on a comparative case study of one MNE operating in four different national environments this paper examines the institutional
entrepreneurship mechanisms adopted during the institutionalization process of a sustainable industry. In particular, this study explores and compares the institutional entrepreneurship’s actions adopted by the subsidiaries of Enercon, a wind turbine manufacturing MNE, in emerging and developed countries. The findings derived from this longitudinal study, identified the application of five distinctive institutional entrepreneurship mechanisms in relation with the institutional environment. This choice of action is exceedingly effectuated by the unique peculiarities of the national institutional environment. To elaborate on this
distinctive causal relationship the observation was focused on the actions taken by one MNE operating in emerging and developed countries. This setup enables the study to obtain a comprehensive causal framework of institutional influence factors and applied institutional entrepreneurship actions.
Hence, this paper contributes to the extension of the theoretical foundation of institutional entrepreneurship theory and the diffusion of institutional entrepreneurship mechanisms as a strategic practice for MNEs within IB.
Keywords: institutional theory; institutional change; institutional entrepreneurship;
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1. Introduction
For long years, leading business scholars declared the multinational enterprise the centre of all scientific attention (Hymer, 1960; Geppert et al., 2006), discarding external institutional determinants as negligible external factors. However in recent years, international management scholars increasingly embraced the importance of institutions (Cantwell et al., 2010; Jackson & Deeg, 2008; Regnér & Edman, 2013) and their wide-ranging effects on the multinational enterprise’s (MNE) activities, strategies and practices (Meyer et al., 2009; Henisz & Delios, 2002; Kostova & Roth, 2002). This stream of research highlighted the influence of institutions on MNEs, by applying both economic and organizational institutional theory (Regnér & Edman, 2013). The impact on the organization was comprehensively, targeting all activities and behaviours (Jackson & Deeg, 2008). Firm survival was determined by the organization’s compliance with the “rationalized and institutionalized expectations of their environment” (Geppert et al., 2006).
Much less attention was dedicated to the opposite exertion of influence, how MNEs interact and shape the external business environment (Regnér & Edman, 2013).
This development highlights the changing approach of how multi-national enterprises (MNEs) and researchers deal with the business environment they come across. Over the last 50 years their attitude shifted from neglecting it, over adapting to it to finally embracing the change (Dahan et al., 2006). This institutional change, where “economic, social and political institutions are moulded, employed, and renewed” (Hoen, 2014, p.45) is necessitated by the precondition that “institutions are neither self-generating nor self-sustaining” (Hoen, 2014, p.45).
Business research failed to imply an answer and in lieu thereof retained incremental change induced by isomorphic pressures (DiMaggio and Powell, 1980) as the standard approach. However, this theory fails to explain the rapid changes made to institutional environments by
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technological advancements over the last few decades. This resulted in a strong necessity to finally shift the research focus towards the long neglected reverse way of economic influence, where multinational enterprises gained importance as agents of institutional development, creation and change (Sell, 1999; Dahan et al., 2006). As a result, the concept of institutional entrepreneurship, as the answer to modern institutional creation, emerged.
Institutional entrepreneurship is the process by which an institutional entrepreneur “leverages resources to create institutions or to transform existing ones” (Maguire et al., 2004, p.657; Fligstein, 1997; DiMaggio, 1988). The institutional entrepreneur can be an organization or a group of organizations (Greenwood et al., 2002) as well as one or more individuals (Maguire et al., 2004). Institutional entrepreneurship is nowadays considered an important element in economic development, as “institutions serve both to powerfully drive change and to shape the nature of change across levels and contexts” (Dacin et al., 2002, p.45). According to Levy and Scully (2007) institutional entrepreneurship represents a strategic action for MNEs, as it is concerned with the transformation of the prerequisites of the field it operates in, including the institutions, processes and behaviours. The degree to which an organization is able to shape the institutions towards its needs is dependent on various field factors like prevailing uncertainty, level of maturity, power of involved actors or technological development. Considering all these factors, the characteristics of emerging industries have been proven to generate the most entrepreneurial strategic postures, according to Covin and Slevin (1990).
Whereas much research in the field of institutional entrepreneurship was conducted to depict the possibilities of reshaping existing institutions (Greenwood et al., 2002, David et al., 2013), their new creation by applying entrepreneurship was heavily neglected. Furthermore did existing literature barely focus on the practical approach of this topic even though research
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solely based on literature is almost incapable of catching the full extent of this complex, intangible and almost immeasurable phenomenon.
Accordingly, this paper poses the question of: How do MNEs, through institutional entrepreneurship (attempt to) institutionalize a sustainable industry in emerging and developed countries?
This paper intends to compare the opportunities and challenges of institutional entrepreneurship in developed and emerging countries to better elaborate on how varying institutional environments influence entrepreneurial actions.
The research will be performed by conducting a single embedded case study based on the observation of one single company’s institutional entrepreneurship actions under four different country settings. By applying a deductive approach, the gathered real-life data will be assessed against a framework of entrepreneurial instruments adapted from existing research done by Battilana et al. (2009).
It is the intention of this paper to close the existing research gap of MNEs institutional entrepreneurship mechanisms applied in the sustainable industries and how the actions vary between developed and emerging countries. Implications for future research in the field of International Business will be given by the extension and clarification of the entrepreneurial mechanisms. Another implication is targeted towards the context of this study, the sustainable industries. So far little research was done in this field and this study targets the identification of field characteristics, which are important for the application of institutional entrepreneurship. The gathered results should provide future business ventures, which engage in institutional entrepreneurship with practical guidelines on which mechanisms to apply to a given environment in order to shape or create new institutions.
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In the following chapters, the current status of literature on this topic will be focused on in detail, manifesting the existing gaps in business literature and leading to the elaboration of the research question and further working propositions. Subsequently the qualitative research process will be thoroughly explained before drawing attention to the selected cases in detail as well as on the given research context and the composed research framework.
The data analysis and results section will constitute the starting point of the discourse of the findings and the following discussion. Finally conclusion and future research indications will be presented to further drive research on institutional entrepreneurship.
2. Literature review
Institution are a key component of the environment, in which firms operate. Indeed, as posited by Garud et al. (2007, p.958), institutions are “fundamental to understanding organization because of the ways in which they tend to be reproduced without much reflection in practice, become taken for granted, and create path dependencies”. Institutional theory has constantly expanded its influence into various other fields of research. As Dacin et al. (2002) stated, “it is a vibrant theory that has been synthesized and contrasted with a number of other approaches” (p.45).
While multiple studies have already explored the regulatory, normative and cognitive institutional features that shape organizations and their behaviour (Scott, 2001), far less emphasis was laid on how “MNEs proactively engage with and strategize around their institutional environment” (Regnér & Edman, 2013). Subsequently, the research on the “struggles and the manner in which interested actors influence their institutional context” (Maguire et al., 2004, p.658), emerged under the name of institutional entrepreneurship.
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In the following chapters, the main concepts of institutional theory, institutional change and institutional entrepreneurship are introduced. Main emphasis is placed on MNEs application of institutional entrepreneurship in emerging and developing countries, against the background of sustainable industries, which represent the business context this study focuses on. Ultimately the relevant framework for this study will be elaborated.
2.1 Institutional theory
The literature has identified two distinct ways to define the concept of institutions. Scholars adopting a rational perspective have argued that “institutions are perceived as efficient solutions to predefined problems (Williamson, 1975)” (Holm, 1995, p.398). In other words, institutions act as means to solve problems in the context they were created for. However, this approach disregards the institutions’ their main functioning as a regulatory framework. This role of institutions was introduced by new institutionalism’s scholars who defined institutions as “socially constructed, routine-reproduced program or rule systems” (Jepperson, 1991, p.149).
The institutional framework is designated to bring the contradictory individual and collective interest in line in a defined arena where interdependent actors act independently to realise collective interests (Holm, 1995).
In order to ensure stable and prospering relationships among the various actors, institutions are designed to impose “humanly devised constraints that structure political, economic and social interaction” (North, 1991, p.97).
Scott (2014) has identified three institutional “pillars” which correspond to different types of institutions organizations may encounter. The regulative pillar depicts formal rules as imposed by authority (Scott, 2011). The normative pillar, instead, “influences behaviour by defining what is appropriate or expected in a given social situation (Wicks, 2001)” (Maguire
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& Hardy, 2009, p.149). Finally, the cognitive pillar refers to “shared conceptions that constitute the nature of social reality” (Scott, 2011, p.57).
Together these three pillars build the institutional framework that structures societies, reduces uncertainty and shapes the business environment companies operate in and limit the scope of acceptable actions (DiMaggio & Powell, 1983; North, 1991; Williamson, 2000). A firm’s actions have to be aligned with those imposed institutional boundaries to be reckoned as appropriate organizational behaviour (DiMaggio and Powell, 1983). This conferred status is called legitimacy and defined as “a generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, believes, and definitions” (Suchman, 1995, p.574). Legitimization represents a precondition for the institutionalization of organizational practices and policies (Tolbert, 1985). Therefore, an organization is considered legitimate, when its “values and actions are congruent with the other social actors’ values and expectations for action” (Deephouse, 1996, p.1025). Only an organization perceived as a legitimate player in the field is able to secure firm survival as an infringement of institutional demands will likely decrease the companies capabilities of securing power, resources and social acceptance (Meyer & Rowan, 1977; DiMaggio & Powell, 1983; Tolbert, 1985).
Hence, according to institutional theory, “a firm’s action is seen not as a choice among an unlimited array of possibilities determined by purely internal arrangements, but rather as a choice among a narrowly defined set of legitimate options determined by the group of actors composing the firm’s organizational field” (Hoffman, 1999, p.351). The organizational field, a key concept in institutional theory, has been defined as “a set of organizations that, in the aggregate, constitute a recognized area of life” (DiMaggio & Powell, 1983, p.148). Scholars have provided different and in some cases conflicting definitions of the organizational field and of its formation. According to Scott (1995, p.56) the organizational field is a community
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of organizations that partakes of a common meaning system and whose participants interact more frequently with one another than with actors outside the field.
Neo-institutional theory scholars have argued that organizations in the same field become more similar over time, due to the influence of isomorphic pressures (DiMaggio & Powell, 1983). This concept of isomorphism is described as a “constraining process that forces one unit in […] to resemble other units that face the same set of environmental conditions” (Hawley, 1968). Yet, positioning isomorphism at the epicentre of institutional theory led to the widespread misconception of institutions being predominantly characterized by stability and inertness (Hoffman 1999). This view of institutions has been increasingly questioned by scholars. Research in institutional theory has indeed intensively stressed in the last decades that the field is more an area of contestation and ‘struggle’ than of collective rationality (Wooten and Hoffman, 2008).
Also, recent studies adopting institutional theory have shown that institutions are rather dynamic, exhibiting an intense interplay of influences and opinions, resulting in firm behaviour that not only attempts to interpret meaning to the changed situation, but to actively change and shape the institutional environment. In the last decades, scholars have thus increasingly focused on the investigation of the dynamism within an organizational field and of change processes to which institutions are subject.
2.2 Institutional Change
Institutional change is defined as a “direct assault on the validity of a long-standing tradition or established activity” (Oliver, 1992, p.567), which leads to “the abandonment of existing practices” (Maguire & Hardy, 2009, p.150).
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Eisenstadt (1980) stated that institutional change is a transition passage between stabilized stages. Change in society is characterized by two features: “changes to and restructuring of the major collectivities and of institutional frameworks” (Eisenstadt, 1980, p.842) and it “involved both concomitant changes in all institutional spheres – political, social, economic – and a radical break with the past” (Eisenstadt, 1980, p.841).
The institutional change process is primarily initiated by forces engaged in deinstitutionalization, a “process by which institutions weaken or disappear” (Scott, 2001, p.182). Indeed, this is the breeding ground of new norms and values and their associated practices. As argued by Dacin et al. (2002, p.48) “institutional change can proceed from the most micro interpersonal and sub-organizational levels to the most macro societal and global levels”. It can span over decades or centuries or take only a short period of time. Change might prevail incrementally or abruptly. Institutional change is also a multilayer phenomenon with numerous occurrences, due to high complexity of institutions themselves and their intricately relations with involved actors operating in the field.
Different sources of institutional change have been identified by extant literature. According to Oliver (1992) deinstitutionalization can arise from three main sources. Functional pressures originate from “perceived problems in performance levels or the perceived utility associated” (Dacin et al., 2002, p.46). Political or legal pressures are a result of changes in the distribution of political power and their decision makers. Social pressures are arising among groups, of which every single one is determined to perceive the own believes. Dacin et al. (2002) expanded this taxonomy by adding newly emerging organizational forms, such as non-profit-organizations, partnerships, etc., as another source of institutional change. Hoffman (1999) additionally highlights the role of organizations, entering or leaving an organizational field as an important driver of change. Hannigan (1995) identified another two critical triggers of change: catastrophes and what he calls “milestones”, like the Kyoto Protocol.
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All these factors, being either of functional, political or social nature (Dacin et al., 2002) put an end to institutional inertia (White, 1992; Hoffman, 1999), dismantling established boundaries, starting the process of restructuring institutionalized practices.
This time of reorganization opens the field to search for new answers and practices (Sine & David, 2003). In this context, “multiple field constituents compete over the definition of issues and the form of institutions that will guide organizational behaviour” (Hoffman, 1999, p.352). The sudden loss of legitimacy of existing institutions opens the now levelled playing field up for actors with novel solutions – the institutional entrepreneurs.
Recent research on institutions has offered valuable insights on institutional change processes and their drivers. Yet, limited attention was paid to the creation of novel institutions, as a result of purposefully applied actions and with the determination of designing an institutional environment according to one actor’s interests. Scholars have still to determine the relation of external influence factors onto the creation process as well as the relationships among actors during this development. The task is of tremendous urgency as technological advancements rapidly lead to newly created institutions.
2.3 Institutional entrepreneurship
As mentioned in the previous section, different actors may be involved in institutional processes with the purpose of changing existing institutions and/or creating new ones. These actors have been called ‘institutional entrepreneurs’ (DiMaggio, 1988).
The concept of institutional entrepreneurship is based upon the more general construct of “traditional” entrepreneurship, but refers to a clearly defined area of application (Tracey et al., 2011). Entrepreneurship has been conceptualized as “an engine of economic growth with the introduction of new technologies and the consequent potential for obsolescence serving to
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discipline firms in their struggle to survive perennial gales of creative destruction (Schumpeter, 1942)” (Garud et al., 2007, p.960,). Entrepreneurs are thus mindful individuals, who seize the opportunities created through the creative destruction (Shane & Venkataraman, 2000). Change as profound as the one initiated by entrepreneurial activities involves divergence from long-established practices and their underlying norms and values. Therefore it is of high improbability that seasoned actors are keenly surging to embrace the change before it has risen to legitimacy (Garud et al., 2007).
Drawing upon the entrepreneurship concept, institutional entrepreneurship “represents the activities of actors who have an interest in particular institutional arrangements including structure, practices and behaviours and who leverage resources to create new institutions or to transform existing ones (DiMaggio, 1988)” (Maguire et al., 2004, p.657). Institutional entrepreneurs, therefore “serve as agents of legitimacy” (Dacin et al., 2002, p.47) by promoting those institutions and practices which are needed to foster their interests. Institutional entrepreneurs are vital for the change of institutions, as “new institutions arise when organized actors with sufficient resources see in them an opportunity to realize interests that they value highly (DiMaggio, 1988, p.14). This operation presupposes the “imaginative generation … of possible future trajectories of action” (Emirbayer & Mische, 1998, p.971) as a base for solving newly emerging problems or societal needs (Perkmann & Spicer, 2007). Institutional entrepreneurship is considered a political process, formed through the interplay of power and interests. It involves a shift from the initial individual towards the collective institutional field (Zilber, 2007). The effort to replace the old institutional framework with a new one is manifested in an attempt to “infuse new beliefs, norms, and values into social structures” (Rao et al., 2000, p.204), leading to a shift in income, power and status (Holm, 1995, p.402). Key to institutional entrepreneurs’ success is, one the one hand, to “identify political opportunities, frame issues and problems, and mobilize external and internal
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constituencies” (Maguire et al., 2004, p.658). On the other hand institutional entrepreneurs have to make sure the other field constituents understand and make sense of those novel conditions (Rao et al., 2000; Zilber, 2007).
Research on the practices though which institutional entrepreneurs initiate and carry out change is still very scattered in management literature. Two studies (Perkmann & Spicer, 2007; Battilana et al., 2009) have developed relevant categorizations of actions and mechanisms institutional entrepreneurs can or need to adopt in order to drive institutional change. In particular, Perkmann and Spicer (2007) identified three different types of ‘projects’ institutional entrepreneurs can develop. First, interactional projects involve: “coalition building, bargaining and incentivizing other actors to get support for their projects (DiMaggio, 1998; Dorado, 2005)” (p.1103). The second category concerns technical projects, consisting of the determination and theorization of “abstract categories and the formulation of patterned relationships such as chains of cause and effect” (Strang & Mayer, 1993, p.492). The third type are cultural projects, where predominant actors frame institutions to please wider groups of society (Rao, 1998).
Independently from the type of project and the mean to accomplish it, the main target is to uniform the actors’ interest in the organizational field. This task is difficult to accomplish as the organizational field usually features a limited number of actors (Foucault, 1972), as a result excluding players from the operation. Moreover the participating actors need consent and collaborate to generate the formal bureaucratic and informal social structures of the institution (Maguire et al., 2004).
In order not to solely initiate change but to realize and succeed in the institutional shift, the institutional entrepreneur requires more than the idea and the resources to change institutions. For those envisioned changes to be put into practice, the organizational field and involved institutions have to reach mutual consent on the legitimacy of the new order.
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Attaining change the underlying norms and values and gaining cooperation requires various skills. Building on the work of Perkmann and Spicer (2007), Eisenstadt (1980) and Montiel and Husted (2009), features needed by institutional entrepreneurs, to successfully change, transform and restructure institutions, can be divided into two main categories.
On the one hand, “the degree of availability of ‘free’ resources or activities not entirely embedded in ascriptive units, such as families, communities, and guilds” (Eisenstadt, 1980, p.850) constitute crucial inputs for entrepreneurial actions. Those resources can be either tangible assets, such as financial means, or intangible assets, like lobbying or political activity (Cantwell et al., 2010). A MNEs expansion results in a greater awareness of the variety of applicable resources that can support institutional change. “A firm with international ties compared to solely domestically operating companies will be exposed to new ways of doing business and thus have a greater propensity to become an institutional entrepreneur” (Montiel & Husted, 2009, p.354).
On the other hand, a variety of intangible skills are required by the institutional entrepreneur to perform actions of change. Firstly, Garud et al. (2002) identified the importance of political skills consisting of the ability to establish networks, bargain and mediate diverse interests. Secondly, analytical skills are crucial for institutional entrepreneurs. This involves the ability to conceptualize an altered reality and the necessary means to implement it (Beckert, 1999). Thirdly, institutional entrepreneurs are required to possess cultural skills, consisting in the capability to elaborate on complex issues crated through deeply rooted norms, values and believes of a society (Ansell, 1997).
Even though skills are carried by individuals, they can also be “collectively represented within special organizations, professions or communities of practice” (Perkmann & Spicer, 2007, p.1104). Therefore the term institutional entrepreneur not only applies to an individual
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human actor, but also to organizations carrying and executing the main idea of institutional entrepreneurship.
Battilana et al. (2009) have identified a set of mechanisms institutional entrepreneurs need to adopt to create and shape institutions.
The first key action identified by Battilana et al. (2009, p.79) is “creating a vision for divergent change”. This first step, crucial for the institutional entrepreneurship project, consists in forming the idea and adjusting it to the given business circumstances in order to generate as the biggest possible support. In the course of this process “institutional defenders” benefiting from the current institutional status quo will heavily vindicate existing practices (DiMaggio, 1988). Drawing on the social movement literature, Markowitz (2007) identified three dimensions creating the vision. (1) Diagnostic framing aims to highlight the malfunction and problems of existing institutions (Suddaby & Greenwood, 2005). (2) Prognostic framing consists of the de-legitimization of existing institutions (Creed et al., 2002; Suddaby & Greenwood, 2005) and the obtainment of legitimization through potential allies for the new vision (Déjean et al., 2004) by incorporating their values and interests (Fligstein, 2001; Suddaby & Greenwood, 2005). (3) Motivational framing targets support for the new vision through the provision of convincing justifications (Misangyi et al., 2008). Social skills and the ability to manoeuvre and negotiate within institutional field are prerequisites (Fligstein, 2001).
The second major action, identified by Battilana et al. (2009, p.81) for an institutional entrepreneur is “mobilizing allies”. As the implementation of change, or the creation of new institutions is a laborious and challenging task, its implementation can barely be conducted on a stand-alone basis (Greenwood et al., 2002). Coalition building, through alliances, partnerships or co-operations, is therefore an essential task for the success of the institutional change (Lawrence et al., 2002). The definition and redefinition of the protagonists, antagonists and other players is critical for the development of long-lasting, sustainable
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alliances (Rao et al., 2000). The entrepreneur’s goal is to “coalesce allies and reduce inherent contradictions in the coalition, and at the same time exacerbate contradictions among opponents” (Battilana et al., 2009, p.81; Holm, 1995, Suddaby & Greenwood, 2005). The third key to a successful institutional entrepreneur strategy is the “use of discourse” (Battilana et al., 2009, p.81). A very important point in the implementation of new institutions is convincing different constituencies and policy makers. This requires outstanding communication skills (Battilana et al., 2009) and rhetorical strategies (Suddaby & Greenwood, 2005) to initiate the rethinking of current institutions and spark acceptance and willingness for new practices.
“Resource mobilization” is the fourth key aspect identified by Battilana et al. (2009). Even though resources, especially financial resources, are essential and very helpful throughout the course of the entrepreneurial venture, they can play a key role particularly in endorsing and advancing the implementation of change. However, financial resources are not the only assets useful to the institutional entrepreneur. Phillips et al. (2000) identified formal authority as another key resource. Indeed, authority obtained through the institutional entrepreneur’s legitimate position within a field gives it the right to introduce change, advances its ideas for change (Maguire et al., 2004) and increases acceptance and support (Phillips et al., 2004). Also social capital relating to the entrepreneur’s informal relationships, is a relevant resource because it allows to gather information, obtain political support and create leverage on various other stakeholders and actors (Battilana et al., 2009).
The final mechanism identified by Battilana et al. (2009) is the “influence of field characteristics”. The easiness to implement change depends on the influences of field characteristics, especially institutionalization and fragmentation (Battilana et al., 2009). Indeed, highly institutionalized fields require the powerful players’ interests and values to be considered in the new rules (Suddaby & Greenwood, 2005), whereas high field fragmentation requires extensive exertion of discourse and compromising on reaching an agreement.
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In accordance with the scope of research conducted on institutional change, institutional entrepreneurship was mainly investigated in combination with change of existing institutions (Regnér & Edman, 2013; Maguire & Hards, 2009; Holm, 1995). Even though traditional entrepreneurship, associated with the creation of novel ideas from scratch, is well documented in the literature, the creation of novel institutions by institutional entrepreneurs has been heavily neglected by scholars so far.
Despite the newness of the concept of institutional entrepreneurship, literature in this field has already focussed intensively on the research of practical application in existing organizational fields. However, scholars neglected to focus research on the causal relationship of external influence factors on the choice of institutional entrepreneurship mechanism during the process of creation of novel institutions. Therefore this paper intends to investigate under which external conditions institutional entrepreneurship actions are selected and applied by MNEs when striving to institutionalize an emerging industry in emerging and developed countries.
2.4 MNEs and institutional entrepreneurship
Regnér and Edman (2014) pointed out, that “while regulatory, normative and cultural-cognitive institutions arguably shape the operating conditions faced by any firm, scholars have suggested MNEs may be particularly exposed to these effects because they span multiple contexts and national boundaries” (p.277).
Indeed, MNEs acquire home country endowments, such as practices, routines and values as a result of the influence of their institutional environment. However, in order to enter and expand in other countries, they need to address their institutions, which might conflict with the ones of the home country. International Business (IB) scholars so far focused their research of the relation between MNEs and institutions in three different areas (Jackson &
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Deeg, 2006). First, the transaction cost approach generally understands institutions as a source of additional costs for MNEs when setting up businesses abroad (Brouthers, 2002), due to a lack of familiarity with the host country’s unique institutional features. On a more detailed level, institutions have direct influence on MNEs’ entry mode decisions. According to Henisz (2000) full equity ownership is more likely to appear under weak institutional environments, whereas Peng (2003) believes low institutional stability rather fosters joint ventures. The second stream of IB research on institutions considers them as valuable assets influencing the “strategic development of firm-specific resources and the likelihood of success of different corporate strategies” (Jackson & Deeg, 2008, p.543). Wan (2005) as well as Jackson and Deeg (2008) posit that country-specific institutional resources constitute an opportunity of creating an advantage over competitors. The third approach on institutions is distance, which refers to Barkema and Vermeulen (1997) who captured the effect on performance that arise due to the unfamiliarity and inexperience with the cultural peculiarities in the host country. This cultural difference between the home and the host country environment leads to higher costs of doing information and hindrances for business operations.
These three streams of IB literature on the relation between MNEs and the institutional environment share the common view of institutions as stable constructs resistant to excessive change and MNEs as the dynamic counterparts morphing into appropriate structures. Yet, the view of MNEs facing and adapting to a coherent and stable institutional field was put in question by leading business scholars (Kostova et al., 2008; Cantwell et al., 2010). Indeed, MNEs, in reality, are not only driven to adapt to the host country institutional environment, but, as emphasized by Cantwell et al. (2010), they are subject to “a greater variety of stimuli to encourage them to engage in institutional entrepreneurship” (p.572). The emergence of this
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perspective in IB research has driven an increasing interest in MNEs’ active agency (Kostova et al., 2008; Cantwell et al., 2010).
Contrary to the above mentioned views on institutions as important inputs in the conception and execution of a MNE’s strategy, Kwok and Tadesse (2006) were among the first to reverse the relation of interference: the MNEs influencing host institutions. This research was the starting point in observing the relationship between MNEs and institutional environments as reciprocal and cooperative constructs.
Cantwell et al. (2010) initiated a new stream of research focus on institutions and MNEs, by regarding the relation as a vibrant process of co-evolution where there is no more clear distinction between external cause and reciprocal internal effects (Cantwell et al., 2010). This co-evolution assumes an endogenous environment, in which sheer adaption is not enough for the MNE (Cantwell et al., 2010). Co-evolution of the MNE and the institutional environment can take on a variety of forms, ranging from the “introduction of new organizational routines”, “transmission of home-country institutional practices” to affecting “institutional change at the supra-national level” (Cantwell et al., 2010, p.577). The next evolvement of this new stream of research was developed by Saka-Helmhout and Geppert (2011) who push the idea of institutional entrepreneurship one step further by clearly identifying advantages for MNEs who actively respond and interact with institutions.
On the one hand, these new approaches of co-evolution and active response give foundation to why institutional entrepreneurship has to be considered a legitimate driver of institutional change opposing the ancient approach of incremental institutional evolution. On the other hand, the complexity of institutional arrangements, differing heavily among countries, underlines the variable application of the appropriate institutional entrepreneurship
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mechanisms executed by MNEs. The institutional context is specifically critical for MNEs, as their business spans multiple countries and therefore multiple institutional fields.
Although the studies previously reviewed have addressed MNEs’ institutional entrepreneurship, scholarly attention to this topic is rather limited and it overlooks the actions adopted over time by MNEs to drive institutional change in heterogeneous institutional environments. This paper thus aims to address this gap in extant literature by exploring, with a longitudinal perspective, a MNE’s actions to change institutions in multiple countries
2.5 Institutions in emerging and developed countries
Research agrees that institutional entrepreneurs have to seize the chances for change, which occur within their organizational field by utilizing their resources. But numerous exogenous factors influence the possibility for change and the organization’s ability to execute it. Those variables are highly country specific and form a unique business environment organizations have to address in order to succeed.
National institutional systems developed incrementally over hundreds of years consistently with society’s evolution. Although institutions as “rules of the game” are made up of formal and informal structures (North, 1990), the underlying driving force in both cases are culturally embedded norms and values, anthropologically developed by a specific society. Williamson (2000) introduced New Institutional Economics to illustrate how culture affects institutions at different levels of impact. The first level of “embeddedness” refers to those slow changing informal rules that structure society, like customs, norms, traditions or believes. This level has direct influence on the embodiment of level 2, the institutional environment. Formal rules, as represented by the judiciary and bureaucracy, retain the main believes of a society on the normative level. Together level 1 and 2 shape levels 3 and 4, which are considered the organizational or internal governance levels. Organizations can
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solely be formed, maintained and governed within the formally and informally established boundaries.
Through the interplay of formal and informal rules with distinctive cultural attributes and varying historical developments of countries, every national business system and its adherent institutional environment encompass uniquely elaborated traits. This draws a clear picture of why national culture is the main driver of institutional differences and why it is of utmost importance for companies to acknowledge and embrace those distinctive attributes to become an accepted, legitimate and successful player in the specific organizational field and institutional environment.
National culture and the cross-cultural difference between two countries are crucial determinants for a company’s performance in a market abroad. The uncertainty and difficulty to form, set up and pursue business in an unknown foreign environment has been named “cross-national distance” (Hofstede, 1980).
Berry et al. (2010) further argue that IB scholars have claimed cross national-differences increasing incertitude by “preventing information or knowledge to flow between countries, thus increasing the costs of doing business across borders” (p.1461). These costs can be defined as the “costs of doing business abroad”, firstly defined by Hymer (1960) as the key determinant shaping an organization’s internationalization providing the foreign firm with disadvantages compared to host country firms. This concept was later further extended by Zaheer (1995) renaming it “liability of foreignness” (LOF), depicting additional costs incurring to foreign companies due to their unfamiliarity with the local business environment and discrimination. In order to overcome the LOF researchers focused on two alternative approaches. Even though Rosenzweig and Nohria (1994) identified isomorphic techniques as a mean to overcome LOF, the causality between isomorphism and performance is not undoubtedly proven. An efficient transfer and implementation of the competitive advantage
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inducing assets (Zaheer, 1991) as well as the engagement in institutional co-evolution (Cantwell et al., 2010) is regarded as a better way for MNEs to reduce the LOF.
Thus, it becomes obvious, that the institutional context, made up of a unique embodiment of political, social and legal components (DiMaggio & Powell, 1983), MNEs operate in is of tremendous importance and has to be considered as much more than just a background condition, because a MNE’s strategy is not only based upon economic rationality but also upon the institutional environment (Wang et al., 2012).
Institutional difference has been argued to be particularly significant between emerging and developed countries (Cavusgil et al., 2010). Developed countries provide organizations with high stability due to stable governmental regimes, sophisticated jurisdiction, powerful enforcement measures and well operating financial markets. The institutional environment is sophisticatedly designed and reduces uncertainty for all actors working within the affected organizational fields.
Emerging countries have been defined as countries that “have achieved substantial industrialization, modernization and rapid economic growth” (Cavusgil et al., 2010, p.288) by opening up to the world economy and globalization forces. Even though emerging markets like the BRIC-countries (Brazil, Russia, India and China) are highly diverse based on their country traits, their economic features are immensely similar. Characterized by tremendously strong economic growth, increasing incomes, ameliorations in education, infrastructure and political stability, they exhibit strong business potential which has led to increasing FDI (foreign direct investment) rates in the last decades.
Nevertheless, companies operating in emerging countries have various obstacles to overcome, especially as far as the institutional environment is concerned. The lack of stable socio-political structures, essential for working markets, such as law enforcement mechanisms and structures for perfect market conditions, are among the predominant challenges (Khanna
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& Palepu, 1997). Furthermore, emerging economies are characterized by under-developed capital markets, inefficient intermediaries and frequent state interference (Bruton & Ahlstrom, 2003). Those institutional voids are market mechanism imperfections caused by the absence of working institutions such as legal and regulatory frameworks (Khanna & Palepu, 1997; Santangelo & Meyer, 2011). Emerging markets further suffer from the lack and the instability of stable regulatory forces; this so called institutional uncertainty constitutes a critical challenge for foreign investors as the occurrence of unexpected regulatory change hinder MNEs from predicting the environment and successfully implementing long-term strategies (Dikova et al., 2010; Henisz, 2002)
Due to these lacking stabilizing forces, emerging markets are considered less efficient (Khanna & Palepu, 1997), hard to predict (Delios & Henisz, 2003) and requiring a more flexible strategy implementation (Santangelo & Meyer, 2011). All these factors influence the institutional macro level and constitute complex obstacles for MNEs in their foreign business activities (Oliver, 1997). In order to successfully overcome the institutional weaknesses of emerging countries, MNEs are urged to devote more financial and social assets into information search (Meyer & Peng, 2005) as well as into the environmental adjustment in the pre-entry phase (Santangelo & Meyer, 2011).
Zhao et al. (2014) developed an adjusted framework of institutional complexity. The concept of “institutional sophistication” consists of two components: “the top-down maturation of the regulatory system that standardizes firm behaviour and the bottom-up diversification and intensification of initiatives that redefine stakeholder membership” (p.656). Emerging countries are currently on the verge of institutional sophistication of their laws and markets, determinant to trigger the full potential as developed countries. In this context MNEs are considered legitimate when contributing to the transformational process (Cantwell et al., 2010), which is currently moving emerging market environments towards a more stable state.
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Institutional entrepreneurs take a leading role in this sophistication process, as they are driven by the same forces in order to push their ideas towards standardization and legitimization (Lawrence, 1999).
Cantwell et al. (2010) pointed out that institutional entrepreneurship is more likely to occur in dynamic environments, as depicted by emerging markets, and in innovative sectors, of which the wind industry, examined in this study, is an example.
2.6 Sustainable industry and institutional entrepreneurship
Apart from the peculiarity of the institutional environment and the country-specific market characteristics, the industry an organization operates in plays a major role in the occurrence of institutional entrepreneurship, because “MNEs’ response to extraordinary institutions often lies at the industry or business-specific level” (Regnér & Edman, 2014, p.277).
Mature and emerging fields demonstrate fundamental differences in the arrangement of institutional patterns crucial for MNEs.
In the former, “roles and relationships are relatively stable and have a long history; power relations and coalitions are sharply defined” (David et al., 2013, p.358). Priorities among competitors are steadily put into place, because institutions are already highly legitimated, even if only for a limited time (Hoffman, 1999).
Conversely, emerging fields exhibit powerful contestations of rivalling characteristics brought forward by numerous firms competing to enforce their particular interest or normative believes (Greenwood et al., 2011). As stated by Pacheco et al. (2014) emerging industries are “industries that are still in the growth phase and have not stabilized in sales or firm numbers (Aldrich and Ruef, 2006; Klepper & Graddy, 1990), face the liability of
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newness (Stinchcombe, 1965) and encounter challenges in gaining critical resources and legitimacy for their practices (Zimmerman & Zeitz, 2002; Zott & Huy, 2007)” (p.1610). “New industries emerge when entrepreneurs succeed in mobilising resources in response to perceived opportunities” (Aldrich & Fiol, 1994, p.647). Over the last decade, new industries have appeared on the global competitive landscape. Many of those, called sustainable industries, reveal powerful social and institutional forces towards sustainable development and environmentalism. Russo (2003) identified two main defining features of sustainable industries. First, the industry clearly reflects the social urge for environmental issues by actively pushing towards sustainability. Second, organizations include socially and environmentally oriented goals in their company vision. Based on those underlying assumptions he modified Starik and Rands (1995) definition of sustainable industry as follows: “An ecologically sustainable industry is a collection of organizations, with a commitment to economic and environmental goals, whose members can exist and flourish for lengthy time-frames, in such a manner that the existing and flourishing of other collectivities of entities is permitted at related levels and in related systems” (Russo, 2003, p.319).
Most of the industries nowadays considered as sustainable industries have been emerging over the last couple of years. Due to their young age and novelty to the international business environment, shaping of the organizational field and determining institutional details is still under process.
Organizations normally act according to an established order, dependent on the institutional environment, competitors, suppliers, customers, etc. All these factors shape a company’s identity, but without a given order to hold onto, the organization must establish a framework for itself. As Déjean et al. (2004) noted, “if the industry is to succeed, somebody has to act to legitimize new activity and to establish patterns of behaviour. These people and organizations act as institutional entrepreneurs” (p.743). Therefore, the features of sustainable industries
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have major implications for research on institutional entrepreneurship. First, “uncertainty in the institutional order provides considerable scope for institutional entrepreneurs to be strategic and opportunistic (DiMaggio, 1988)” (Maguire et al., 2004 p.659). Second, successful entrepreneurs can anticipate powerful advantages in case their practices are legitimized (Garud et al., 2002; Maguire et al., 2004). Third, the new field creates various challenges, like the absence of isomorphic forces or diffused power distribution (Maguire et al., 2004).
Due to the novelty of research on institutional entrepreneurship as well as the only recent appearance of sustainable industries as a field of research, this study will finally combine those two areas. Likewise Russo (2003) the wind energy industry was chosen as the sustainable industry, as it clearly adheres to the two defining characteristics of a sustainable industry and additionally has faced a major wave of internationalization over the last couple of years.
2.7 Theoretical framework
Institutional literature in the field of international business, whether it approaches institutions from the organizational, sociological or economic point of view, has focused primarily on change and adaption of the institutional environment within mature environments characterized by isomorphic pressures. Under these circumstances MNEs were only adapting to the given institutional environment. Until recently change effectuated other than by the incremental development of the institutional development was neglected or disregarded. Therefore IB-literature failed answer to pressing issues concerning the emergence of new institutional fields.
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The limited research on MNE’s institutional entrepreneurship mainly focused on settled industries and mature organizational fields. Solely Regnér and Edman (2013) focused on MNEs actively engaging in and shaping the institutional environment, whereas other IB-studies neglected the MNEs’ abilities to strongly drive the emergence of new fields of business and the connected institutional environment. MNEs hold financial and intangible assets, such as big business networks and bargaining power as well as the necessary capabilities involving extensive international business knowledge and negotiation expertise, which can be transformed into institutional entrepreneurship actions (Perkman & Spicer, 2007; Battilana et al., 2009).
With regard to institutional entrepreneurship, solely few researchers have put the issue of MNE’s entrepreneurial actions into the context of emerging countries, even though this environment offers good breeding ground for institutional change (Cantwell et al., 2010). As a result of the meagre attention paid to MNEs inducing institutional change through institutional entrepreneurship in emerging markets, no study to the author’s knowledge has yet focused on comparing a MNE’s institutional entrepreneurial actions in emerging versus developed countries, which has illustrated previously present critical institutional differences.
Another field of research, the sustainable industries, represent a major new field for research on institutional entrepreneurship, as the settlement of the field and the institutions did not yet occur, due to the immaturity of the industries. Therefore these conditions provide MNEs with the perfect possibility to shape the institutional environment according to their interests. It is this paper’s intention to fill those existing gaps in IB and management literature and provide an institutional entrepreneurship insight that can elevate the theory towards being included into strategic management approaches. In particular, this study will combine the phenomenon of institutional entrepreneurship conducted by MNEs with the construct of
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sustainable industries and with the institutional heterogeneity between emerging and developed countries.
The aim is to examine institutional entrepreneurship conducted by MNEs in sustainable industries. The main emphasis will be laid on how institutional entrepreneurship can act as a strategic tool for foreign companies when entering a not yet existing or very young unsettled foreign market.
This research focus leads to the formulation of the following research question:
How do MNEs, through institutional entrepreneurship (attempt to) institutionalize a sustainable industry in emerging and developed countries?
Existing theory on institutional entrepreneurship suggests that a variety of entrepreneurial actions available to the organization are utilized in response to varying degrees of institutionalization as prevalent in emerging to developed markets. This paper intends to provide research with the practically founded proof needed to legitimize this theory.
Drawing on Battilana et al. (2009) this study will explore MNEs and their adoption of specific mechanisms of institutional entrepreneurship (i.e. framing the vision, coalition building, discourse and resource mobilization) in different institutional contexts. As explained in section 2.3, these mechanisms provide MNEs the useful tools in shaping and creating the institutional environment. In particular the following six working propositions were developed.
Drawing on Cantwell et al. (2010) who expect a higher degree of co-evolution in emerging than in developed markets, leading to more alliance building, the first proposition is:
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Proposition 1: MNEs as institutional entrepreneurs will be more likely to use coalition building in emerging countries, due to the high institutional uncertainty and the involved country risk, than in developed countries.
As illustrated in section 2.5, Zhao et al. (2014) argued, that developed countries are characterized by high “institutional sophistication”, exemplified by maturation of the institutional environment and extensive standardization of behaviour. Cantwell et al. (2010) illustrated that, in this context, the legitimation of MNEs is dependent on their contribution to the transformation process. Therefore the second proposition is:
Proposition 2: MNEs as institutional entrepreneurs will be more likely to use discourse in developed countries, due to the very stable institutional environments, than in emerging countries.
As discussed in section 2.6, the number of firms in the organizational field of emerging industries is not yet settled, as shown by Aldrich and Ruef (2006) and Klepper and Graddy (1990). As a result the third proposition is:
Proposition 3: Coalition building will be a less used entrepreneurial action of MNEs operating in sustainable industries in emerging markets, due to a lack of adequate allies, than in developed markets.
DiMaggio (1988) has defined the process of institutional entrepreneurship as the leveraging of resources in order to imply change in an organizational field. As elaborated in section 2.6, Aldrich and Fiol (1994) concluded that new industries are a result of successful resources mobilization in response to business opportunities. As this underlying prerequisite is equally applicable to countries independently from the embodiment of the existing institutional environment, the fourth proposition is:
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Proposition 4: The process of creating new institutions in emerging and developed countries will be executed by using resource mobilization.
Based on the conclusions of Zimmerman and Zeitz (2002) in section 2.6, underlining that the challenges of MNEs in emerging countries involve a struggle for practices’ legitimacy especially at the beginning of an operation. As persuasion of the new practices can be more effective realized by using intangible resources, the fifth proposition is:
Proposition 5: MNEs as institutional entrepreneurs in sustainable industries are more likely to use monetary resource mobilization in emerging markets, than formal authority and social capital.
New industries emerge due to the resource mobilization in order to respond to opportunities, as depicted by Aldrich and Fiol (1994). As emerging markets require more flexible strategies (Santangelo and Meyer, 2011), overcoming the institutional weakness can be achieved by dedicating social assets, as highlighted by Meyer and Peng (2005) in section 2.5. As this leads to higher degrees of available information (Meyer and Peng, 2005), the sixth proposition is:
Proposition 6: MNEs as institutional entrepreneurs are more likely to use intangible resource mobilization, like interpersonal relations and networks, in emerging countries than in developed countries.
3. Methodology
This paper adopts a qualitative approach with a single embedded Case Study on the adoption of institutional entrepreneurship mechanisms by the German wind turbine manufacturer Enercon GmbH during its internationalization process in developed and emerging countries. The study will focus on Enercon’s expansion in in Austria, Portugal, as developed countries,
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and Brazil and India, as emerging countries, and will analyse and compare the institutional entrepreneurship mechanisms adopted by the MNE across the four countries
This paper does not intend to solely identify managers’ perceived input and opinion to shape institutions, but to observe and analyse the extent to which organizations in sustainable industries de facto interact with institutions and to identify the actions and mechanisms they adopt in different institutional environments. The aim is, through the case of Enercon, to answer the research question and address the propositions formulated in the previous section
3.1 Research Design
Given the exploratory nature of this research and the difficulties associated with the evaluation of institutional entrepreneurship mechanisms, due to the immeasurable nature of the data and the relative novelty of the industry, a qualitative research approach was chosen (Regnér & Edman, 2014). Qualitative analysis offers the possibility to ”emphasizes description of complex organizational processes” (Shaffer, 1995, p.510) and is essential in this context since institutions “as phenomenological constructs necessitate using interpretive research tools” (Suddaby et al., 2010, p.1239).
Lee (1999) identified four preconditions to apply qualitative research: (1) “contextualization”, (2) “vivid description”, (3) “dynamic structuring of the organizational member’s socially constructed world” and (4) “the worldviews of people under study” (p.43). All four of those features are applicable to the characteristics of the conducted research. Those context-specific characteristics are a prerequisite to conduct an in-depth research of interpretative nature, as applied to this study of institutional entrepreneurship (Garud et al., 2002).
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appropriate method to investigate MNEs’ institutional entrepreneurship in sustainable industries.
Simon (2009) defined case study as an “in-depth exploration from multiple perspectives of the complexity and uniqueness of a particular project, policy, institution, program or system in a ‘real life’ context” (p.21).
In this study, the research design is a single embedded case study, as the research subject is one single company, Enercon GmbH, but the focus is on their business operations in four different countries.
Solely the case study approach provides the researcher with the possibility to observe a “practical unity, the subject” together with an “analytical or theoretic frame, the object” (Thomas, 2011, p.513). According to Thomas (2011) the subject is chosen because it is “an interesting or unusual or revealing example through which the lineaments of the object can be refracted” (p.514). The selection of Enercon GmbH as the subject for this case study was based on its “key case” (Thomas, 2011, p.514) status, as it perfectly exemplifies “the analytical object of the inquiry” (Thomas, 2011, p.514) and enables the obtainment of “exemplary knowledge” (Thomas, 2011, p.514). Therefore the case selection conforms to Yin (2013), who suggests a “representative or typical” (p.48) sample is best to conduct a deductive approach.
Another reason why this research design was selected is due to the novelty of the topic and a so far non-establishment of a testable qualitative theory. According to Eisenhardt (1989) those prerequisites of the research topic make the case study approach even more appropriate. A case study is determined to explain the dynamic nature of the observed unit of analysis (Eisenhardt, 1989; Thomas, 2011). More specifically a heuristic case study was selected as it is targeted towards exploration of novel problems (Eckstein, 1975) and identification of new causal relationships (George & Bennett, 2005). As it will be explain more in detail, this single
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embedded case study follows the rational for enabling literal as well as theoretical replication, leading to a higher degree of generalizability (Yin, 2013).
As institutional entrepreneurship is to be considered a process rather than a terminated action, a long-term perspective is applied to this study. Therefore this research will be performed as a longitudinal Case Study as this approach enables to “description of the evolution and variation in strategies” (Shaffer, 1995, p.510).
To conclude, the aim of this research is to perform a longitudinal single embedded case study on the institutional entrepreneurship mechanisms adopted by Enercon GmbH in four diverse institutional environments when confronted with the task of creating new institutions. This set up of research shall provide the researcher with the necessary detailed information to assess the applied actions according to the previously mentioned mechanisms identified by Battilana et al. (2009) and to confirm or refute the propositions formulated in section 2.7.
3.2 Case Selection
The institutional entrepreneurship conducted in sustainable industries is examined by focusing on one of the world’s fastest growing industries – the sustainable energy industry, and more specifically the wind energy sector. This choice rests upon the field’s characterisation of relatively new or still even absent institutions in the newly entered markets, a small number of competitors and relatively big technological changes.
3.2.1 Sustainable energy
The sustainable energy industry has been on the rise for a couple of decades, but the development has always been damped by the overwhelming power and influence of the oil, coal, gas and nuclear energy industries. Nevertheless, recent nuclear disasters and growing
