Different Reasons for Different Responses: A Review of Incumbents’ Adaptation in Carbon-intensive Industries - Blogpost

What motivated you to pursue this research?
It has been an important topic in strategy research to understand different organizational responses and the reasons behind these differences, because such understanding enables to better explain the performance implications and inter-firm heterogeneity therein. It is also important for policymakers who attempt to expect how a policy change will influence what the firms of interest are going to do. They would also want to learn more about factors and forces that lead to specific organizational responses.
However, our understanding of how organizations respond and why they respond differently is still limited and fragmented. Particularly in the context of carbon emissions, prior studies often map organizational responses on a single dimension such as a continuum between reactive and proactive. Understanding different organizational responses on such a single dimension has important limitations in the pursuit of the goals of strategy research and policy makers.

In what ways is your research innovative, and how do you think it will impact the field?
To integrate the scattered observations from the literature, we identify three dimensions along which diverse organizational responses can be efficiently mapped out: goal, timing, and scope. This more fine-grained categorization, to map and compare organizational responses, helps to enhance our understanding of organizational adaptation. Through the lens of these three dimensions, we could develop a typology of five different organizational responses.
The typology suggests that the incumbents in carbon-intensive industries have attempted to adapt to the heightened environmental pressure to reduce carbon emissions in more diverse ways than has been empirically studied, and theoretically assumed, in the related literature. While existing studies provided contradicting results when studying performance implications of proactive and reactive responses, studying performance implications of more diverse organizational responses shown in our typology may reconcile the conflicting findings in prior studies and reveal interesting insights in future studies.
On the other hand, we found that the positions on the three dimensions tend to be correlated so that the observed heterogeneity of organizational responses is somehow limited. This suggests that some organizational responses might be less likely to occur (despite increasing pressure) as well as the transformation between organizational responses.
Lastly, we also review and discuss different reasons behind this limited heterogeneity at the institutional, organizational and individual level. This is particularly intriguing for the literature on inter-firm performance heterogeneity, as it highlights sources and the persistence of heterogeneity in incumbents’ adaptation to common environmental change, especially in carbon-intensive industries.

What advice would you give to new scholars and incoming researchers in this particular field of study?
To better understand why the incumbents adapt in different ways and how the performance heterogeneity emerges and persists, it is crucial to consider such interdependence (e.g., complementarity or internal fit) across the three dimensions of organizational response – e.g., issues such as multicollinearity, endogeneity or omitted variables. In this regard, future studies may benefit from the identified typology of organizational responses and the discussed reasons behind the observed responses.