Strategic conformity and nonconformity: integrating institutional theory, the resource-based view of the firm and creativity research

Abstract

This paper proposes an integration of institutional theory, which explains the pulls of strategic conformity, and the resource-based view of the firm, which identifies the importance of strategic nonconformity. It suggests that the absence or presence of creativity in firm culture explains whether firms will make explicit whether to conform to or reject institutional norms. Creativity, as used here, is defined as the development of novel and practical ideas that provide a platform from which institutional norms can be challenged. A model of competitive strat-egy as imitative, therefore imitable; incremental, imitable over time, or innova-tive, as good as inimitable, is developed. Alignment between institutional and firm cultures produces strategic conformity. Paradoxically, the pervasive influ-ence of taken-for-granted norms may be challenged through the institutionaliza-tion of creativity within firm culture. Firms who value creativity may elect to conform to institutional conventions but do so consciously. Enabling factors that influence the choice of strategy include a need for legitimacy, tolerance of risk, diversity of viewpoints and expression, firm size, leadership style, organizational design and rewards structure.