Institutional pressures and marketing ethics initiatives:
the focal role of organizational identity
Kelly D. Martin
&
Jean L. Johnson
&
Joseph J. French
Received: 28 June 2010 / Accepted: 17 December 2010 / Published online: 12 January 2011
#
Academy of Marketing Science 2011
Abstract Institutional theory implies that normative soci-
etal expectations create pressures for organizations to
respond acceptably to important institutional constituents.
Although the role of the institutional environment on
marketing has been studied, the organizational mechanisms
by which firms respond to societal pressures remain under-
investigated. We suggest that an important determining
factor involves organizational identity, which drives firm
response to societal norms and facilitates its quest for
legitimacy. Accordingly, this study contributes to organiza-
tional theory in marketing by casting identity as the focal
mechanism in the firm’s response to the institutional
environment. Marketing ethics and CSR issues frame this
research given natural synergies with institutional and
organizational identity theories and evidence that increas-
ingly, firms must respond to societal expectations involving
ethics in their marketing practices. Using game theoretical
models and economic experiments, we find that the
influence of the institutional environment emerges through
firm identity, affecting resource allocation to ethical product
augmentation.
Keywords Institutional theory
.
Organizational identity
theory
.
Marketing ethics
.
Corporate social responsibility
.
Game theory
.
Experimental economics
Introduction
Institutional theory implies that social norms and institu-
tional expectations create pressures for organizations to
conform or to respond in a manner acceptable to important
societal constituents (DiMaggio and Powell 1983; Meyer
and Rowan 1977; Scott 1987). Marketing researchers have
delineated important linkages between the institutional
environment and marketing phenomena. In particular,
pressures generated by the institutional environment have
demonstrated influence on the marketing function (Grewal
et al. 2001), on the organization as a whole (Connolly et al.
2010), and across marketing channels (Grewal and
Dharwadkar 2002). This stream of work also has demon-
strated institutional theory’s natural implications for social
responsibility concerns important to marketing (Handelman
and Arnold 1999).
So too, business practice reflects this relationship
frequently as predominant societal norms encourage organ-
izations to strive for legitimacy, or the evaluation of their
actions by influential stakeholder groups as “desirable,
proper, or appropriate” (Suchman 1995,p.574).For
example, General Electric (GE) recently debuted their
Ecomagination program, touting their smart grid technolo-
gies that enable better use of alternative energy. To build
awareness for these efforts, for the first time ever, GE
launched ads during the Super Bowl, arguably one of the
most visible message times available to marketers (Allen
2009). Likewise, Chevron Oil has tried vigorously to
reposition themselves as “part of the solution,” touting
K. D. Martin (*)
College of Business, Colorado State University,
Fort Collins, CO 80523-1278, USA
e-mail: kelly.martin@business.colostate.edu
J. L. Johnson
Amsterdam Business School,
Plantage Muirdergracht 12,
1018 TV, Amsterdam, The Netherlands
e-mail: j.l.johnson@uva.nl
J. J. French
Monfort College of Business, University of Northern Colorado,
Greeley, CO 80639, USA
e-mail: joseph.french@unco.edu
J. of the Acad. Mark. Sci. (2011) 39:574–591
DOI 10.1007/s11747-010-0246-x