Innovation and institutional change: the transition to a sustainable ...

Theoretical perspectives 35
organizations jeopardized the standing of the automobile, and had not
automobile clubs played an active role in defusing opposition, the industry
might have faced stringent legal constraints on the use of cars. Similarly, in
the biotechnology industry, concerns about the dangers of rDNA technology
and threats of reckless organisms might have led to restrictive laws had not
professionals quickly devised voluntary safeguards, and forestalled
governmental intervention” (Rao and Singh, 2001: 263). The importance of
creating and maintaining legitimacy is also confirmed by authors such as
Oliver (1992) and Suchman (1995). Oliver (1992) shows how reduction in
legitimacy, such as when changing societal values become shared and
represented by governments, or when higher efficiency standards are set by
government bodies, may lead to de-institutionalisation.
The approach utilised by Holm (1995) in understanding institutional
dynamics of changes in Norwegian fisheries is useful. Holm (1995: 400)
uses a nested systems perspective: “A distinction is made between action
guided by institutions, on the one hand, and action aimed explicitly at
manipulating institutional parameters, on the other”. We feel this distinction
is valuable, because it represents two different playing fields, comparable to
playing chess at the chessboard on the one hand, and on the other hand
trying to change the rules for chess within a rule-making body such as the
FIDE 5 . Apart from discerning between practices guided by institutions and
practices intended to manipulate institutions, it is also possible to distinguish
institutions that represent ground rules (or fundamental rules) and
specification rules that specify, and built upon, ground rules, such as
proposed in a similar form by Coriat and Weinstein (2002).
Ecological modernisation
In ecological modernisation theory several scholars have aimed to explain
how increasing attention for environmental problems has been translated into
institutional change processes within specific industries. Ecological
modernisation theory is concerned with how contemporary industrialised
societies deal with environmental crises (Mol and Sonnenfeld, 2000). It
proposes that environmental reform of the modern organisation of
production and consumption can shape a path towards sustainable
development based on the idea that collaboration of key actors such as
government, industry, reform-oriented environmentalists, and science, can
generate win-win outcomes of economic development and environmental
improvement. This takes place through a process of institutionalisation of
ecology in the social practices and institutions of production and
consumption, implying new ‘rules of the game’ for the social organisation of
5 International Chess Federation.