That's (not) the way we do things: Integrating neoinstitutional and sensemaking perspectives to explain strategic responses to global climate change

This comparative case study examines the strategic responses of two oil companies, BP and Exxon Mobil, to institutional pressures related to global climate change. BP has supported institutional change while Exxon Mobil generally has resisted it. This difference is notable because it appears not to be due to differences in the expected impact on shareholder value of climate change policies, nor to differences in institutional pressures faced by the two companies.; I find that differences in BP's and Exxon Mobil's climate change-related actions are a function of differences in top managers' environmental management logics, which are understandings of how to manage the organization's relationship to the natural environment and related stakeholders. BP's managers persistently accord more legitimacy to and seek legitimacy from environment-related external stakeholders than do Exxon Mobil's managers. This difference is rooted in differences in broader dominant logics, which are orientations toward general management: Exxon Mobil is a more "inner-directed" company and BP a more "other-directed" one.; This case study suggests that neither teleological nor deterministic perspectives alone are sufficient to explain organizational action. Rather, it suggests a social psychological explanation of organizational action based on identity confirmation. Institutional pressures are not frictionlessly absorbed into the firm; rather, they are "met at the firm border" by dominant logics and related organizational identities, which they may confirm or disconfirm. When institutional pressures confirm top managers' dominant logics, then companies support processes of institutional change. When institutional pressures are weak and disconfirm dominant logics, then companies resist processes of institutional change. When institutional pressures are strong and disconfirm dominant logics, managers employ strategies of "resistant conformity" in an effort to both confirm dominant logics and at the same time conform, at least symbolically, to institutional pressures. This study contributes to neoinstitutional theory by providing a novel and parsimonious explanation of organizational responses to institutional pressures, and of heterogeneity in those responses.