Institutional approach to strategic management

Abstract

The idea of an institution-based view (IBV) as a third perspective in strategic analysis (the first two being the industry-based and resource-based views) has been recently addressed by several strategy scholars. Institutions are both the medium for and the result of social action: they enable and constrain what firms and other agents wish to accomplish “directly determining what arrows a firm has in its quiver as it struggles to formulate and implement strategy and to create a competitive advantage” (Ingram and Silverman [“Introduction: The new institutionalism in strategic management.” Emerald, Bingley, 20, 2002]). This serves to underline that given the influence of institutions on firm behavior, any strategic choice is inherently affected by the formal and informal constraints of a given institutional framework. Our contribution focuses on a review of the role of institutions in strategic analysis drawing from literature on institutionalism and on the recently developed stream of the institution-based view.