Pan-Pacific Conference XXXIV. Designing New Business Models in Developing Economies

In addition, firms’ responses to institutional pressures
were not only compliance or non-compliance. The
meeting between different institutional logics
produced a wide range of firms’ responses [22][30] to
deal with complexity. Institutional logics referred to
“the socially constructed, historical patterns of
cultural symbols and material practices, including
assumptions, values, and beliefs, by which
individuals and organizations provide meaning to
their daily activity, organize time and space, and
reproduce their lives and experiences” [30, p. 1]. In
that regard, firms’ institutional logics of efficiency,
innovation [25], and prevention [8] sustained firm’
responses to coercive institutional pressures that
encompassed different practices, including
environmental [11] and proactive ones.
Consequently, legitimacy seeking and institutional
logics supported the relationship between regulation
and incentives, and environmental management
Furthermore, the neo-institutional theory propounded
that institutional pressures manifest themselves in
organizations’ internal spheres through their members
[24]. Consequently, microfoundations of the neoinstitutional
theory [4][26] supported the relationship
between coercive institutional pressures and
managers’ environmental attitudes and, specifically,
the concept of sense-making 3 . Sense-making referred
to a social process that allow people “to understand
situations, notions of appropriate action, and even
themselves by articulation them with others” [26, p.
88].
Second, the resource-based theory predicted firms’
environmental responses based on firms’ resources
and capabilities [5]. These resources and capabilities
were the foundation of firms’ competitive advantage
[5][17]. This theory conceived environmental
management as a proactive firms’ practice or strategy
[3][8][21] and dynamic capability [3][10]. As a
dynamic capability, the proactive environmental
management depended on the integration of other
firms’ capabilities [10] such as managerial dynamic
capabilities [1][18]. In this context, the concept of
managerial dynamic capabilities [1][18] supported
the relationship between managers’ environmental
attitudes and environmental management. The
microfoundations of the resource-based theory
remarked the relevance of managerial cognition in
relation to capabilities and resources development
[18]. Specifically, the study of the micro foundations
of this theory included the managers’ role and human
capital [5] and highlighted the relevance of managers’
3 The dynamic capabilities approach of the resourcebased
view theory also mentioned process of sensemaking
and the relevance of organizational
ecosystem [29]. Nevertheless, the framework of this
theory was focused on “gathering and filtering
technological, market, and competitive information
from both inside and out-side the enterprise, making
sense of it, and figuring out implications for action”
[29, p. 1326].
dynamic capabilities [1] [18]. This approach
encompassed three main concepts: (a) managerial
cognition, (b) managerial social capital, and (c)
human capital [18]. The concept of managerial
cognition considered that differences in managers’
cognition and interpretations explained the
heterogeneity in firms’ responses [18]. Moreover, this
approach suggested that managers’ interpretations
and beliefs [18] influenced the adoption of firms’
practices. Not only did individuals give sense to
environmental opportunities and threats, but also they
sized opportunities and configured organizational
responses [29]. Individuals with positive
interpretations and beliefs [18] developed firms’
proactive environmental responses [28] aiming to
gain firms’ competitive advantages [5] [17].
Concerning to that, dynamic managerial capabilities
referred to “the capabilities with which managers
build, integrate, and reconfigure organizational
resources and competences” [1, p.1012]
CONCLUSION
The theoretical framework supported by neoinstitutional
and resource-based theories, and their
connectedness, propounds the existence of direct and
indirect influence of regulation and incentive on
firms’ environmental management. Managers’
environmental attitudes partially mediate this
relationship. Concepts of legitimacy seeking, sensemaking,
institutional logicsfrom the neoinstitutional
theory, and dynamic managerial
capabilitiesfrom the neo-institutional theory
offer sustenance to the theoretical framework. This
framework could guide empirical researches in
developing countries with institutional weaknesses,
such as Peru.
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