Dynamic capabilities of institutional entrepreneurship

Although the concept of institutional entrepreneurship has been developed in the institutional theory literature to explain change in the normative context of organizations, little attention has been given to understanding what institutional entrepreneurs actually do to create change. The purpose of this paper is to begin to address this gap in the literature by drawing on the process, challenges, successes and lessons learned when a large multilateral organization (the United Nations Development Program) launched a new international multi‐stakeholder initiative to facilitate inclusive business development.

This case study gathered qualitative data through key informant interviews, participant observation and a review of project documents and e‐mail correspondence.

Drawing on institutional theory and the literature on dynamic capabilities, the research found that highly institutionalized organizations acting as institutional entrepreneurs need to manage two key tensions – legitimacy management and change process management – in order to influence change in their institutional fields.

This paper is the first to combine institutional theory and the dynamic capabilities literatures to understand the question What capabilities are required by organizations to succeed in changing their institutional fields?