Year: 2019
Type: article
Abstract: Emerging economies are often characterized by pervasive institutional changes and resultant institutional voids. In the absence of strong formal institutions, firms rely on informal institutions to fill these voids. This article argues that the process of sensemaking for firms in turbulent environments is continuous and dependent on cyclical adjustments connecting performance via a feedback loop to scanning and interpretation. Far from being a one-time occurrence, environmental sensemaking is a process operating in accord with continuous environmental changes. This study’s findings derive from an in-depth analysis of a Russian pharmaceutical firm and an Indian telecommunications firm, and demonstrate that entrepreneurs make sense and gain legitimacy through political connections. The study further finds that improvements in institutional environments reduce the salience of political networks, thereby creating a choice for firms to rely on formed market mechanisms or continue along the path of political connections that evolve to public–private partnerships.
Source: Journal of Management Inquiry
Authors: Anton Klarin, Rifat Sharmelly
Institutions: Edith Cowan University, Quinnipiac University
Language: English
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $3,650
OpenAlex ID: W2959934622