Organizational Responses to Institutional Complexity: The Case of Beverage Industry and Obesity

With operating environments becoming more complex, companies increasingly face multiple demands by various stakeholders. Institutional complexity (IC) arising out of potentially competing demands not only poses a legitimacy threat but also provides interpretive opportunities for organizations trying to balance these demands. Taking a discursive approach and drawing on organizational discourse, the purpose of this dissertation is to understand the ways in which organizations respond to IC and potential consequences of such responses. The phenomenon is explored in the context of corporate social responsibility (CSR), which is understood to increase IC in general. More specifically, the focus is on organizations whose core business is perceived to be directly associated with a CSR problem, which can be understood to increase IC in particular. The American beverage industry responding to the issue of obesity was chosen as the empirical case to represent this context. The empirical case is studied from different theoretical perspectives in four essays. Essay 1 combines the approach of CSR as sensemaking and sensegiving activity with the concept of narcissistic organization to examine the rhetorical strategies of the industry trade association. Essays 2 to 4 focus on the leading organization of the industry. Essay 2 adopts a paradox perspective to the management of IC and examines the dynamics of a defensive response to conflicting demands. Essay 3 uses the concept of institutional logics to explore how the community logic can be leveraged as a strategic and flexible resource in attending to new external demands. Essay 4 draws on the (de)legitimation literature to examine how the public perceives the organizational attempts to maintain legitimacy in responding to IC. This dissertation contributes to our understanding of how organizations skillfully utilize their interpretative capabilities in symbolically managing IC. This is done by opening up the discursive practices, narrative constructions and rhetocical strategies organizations use to fend off threatening demands and defend legitimacy. This dissertation also expands our knowledge of the implications of these responses for both stakeholders and organization-stakeholder relationships, not just for organizational practices and structures. This is done by showing how symbolic management of external demands can imply new goals, practices and roles for stakeholders and seek to (re)define relationships between different stakeholders. Furthermore, this dissertation examines the implications of organizational responses for organizational legitimacy. This is done by demonstrating how organizational attempts to maintain legitimacy can lead to an unintended consequence of delegitimation and highlighting the multidimensionality of this (de)legitimation extending beyond the issue in question.