ALL FOR ONE AND ONE FOR ALL: HOW INSTITUTIONS IMPACT WINERIES’ ADAPTATION TO CLIMATE CHANGE

Strategy & Business Policy

Speaker: Frank Wijen

Associate Professor -Rotterdam School of Management

Conference  Jouy-en-Josas/Room T 30

ABSTRACT

Firms join institutions voluntarily to gain legitimacy and commercial benefits. In return, they submit to membership rules and practice standards. Under external conditions such as climate change, this can pose a dilemma: climate-sensitive firms may enjoy important benefits from their institutional membership while being heavily constrained in implementing the requisite adaptation measures. To explore this undertheorized tension, we compare strategic adaptation to climate change in the wine industry in France, where firms join collectives with strictly defined membership rules and practices, to adaptation in California, where firms face hardly any membership conditions. We identify two types of institutional influences. Dogmatic institutions, with their centralized, directive, and rigid nature, impact French wineries in a diametrically opposed way to the pragmatic institutions prevalent in California. Dogmatic institutions hamper short-term adaptation, yet surprisingly also drive longer-term innovation, as they stimulate the collective quest for systemically optimal, identity-preserving solutions. The ensuing punctuated equilibrium trajectory of French wineries contrasts with the pragmatism-driven continuous evolution of their Californian counterparts. We contribute to the institutional and climate-change-adaptation literatures by empirically unpacking and theorizing the differential impact of dissimilar types of voluntary institutions on climate adaptation practices.