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Economic rents and legitimacy: incorporating elements of organizational analysis institutional theory to the field of business strategy

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  • Marco Aurélio Lima de Queiroz
  • Flávio Carvalho de Vasconcelos
  • Rafael Guilherme Burstein Goldszmidt

Abstract

Are sources of economic rent, as defined by the prevalent business strategy paradigm, sufficient to attain and maintain superior returns? The perspective developed within the conceptual framework of the Institutional Theory may offer managers a contribution towards understanding the strategy process and its potentialities, particularly by stressing the leading role played by legitimacy, the influence of many institutional spheres, the isomorphic pressures, ceremonial behavior and decoupling, among other elements, that mainstream business strategy fails to address directly, but which may have a significant effect on firm performance. We advance that these elements must be accounted for in the pursuit and acquisition of economic rents, even if the ability to articulate them purposefully is constrained by rationality, agency conditions and the manager's social embeddedness.

Suggested Citation

  • Marco Aurélio Lima de Queiroz & Flávio Carvalho de Vasconcelos & Rafael Guilherme Burstein Goldszmidt, 2007. "Economic rents and legitimacy: incorporating elements of organizational analysis institutional theory to the field of business strategy," RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration), ANPAD - Associação Nacional de Pós-Graduação e Pesquisa em Administração, vol. 11(spe1), pages 177-198.
    • Handle: RePEc:abg:anprac:v:11:y:2007:i:spe1:572
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    References listed on IDEAS

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