Mission-Driven MNEs' Institutional Engagement for Sustainability and Competitive Advantage. A Case of Patagonia Inc.
Authors
Rafi, Muntahima Parvin ; Jahan, Rownak ; Ashraf, Tamanna
Term
4. Semester
Publication year
2026
Submitted on
2026-06-01
Pages
173
Abstract
How can mission-driven multinational companies both fit into existing institutions (rules, standards, and norms) and help create new ones at the same time? This study examines firms that pursue social or environmental goals alongside profits, using Patagonia, Inc. as a case. We show that a governance setup with credible commitments—where voting rights are structurally separated from economic rights—is a key condition for doing both. Adapting to current institutions builds pragmatic legitimacy (acceptance and trust), which then makes institutional shaping easier. In turn, shaping creates new rules that lower future adaptation costs, creating a virtuous cycle. We present a Governance Simultaneity Model with three mechanisms—credible commitment, mutual reinforcement, and strategic multiplicity (using multiple strategies)—that operate across national and transnational contexts. The model explains how simultaneity can lead to environmental, social, and governance (ESG) outcomes and sustained competitive advantage through pathways based on legitimacy, resources, institutions, and innovation. Finally, we offer a four-quadrant typology of institutional engagement: Simultaneous Synergy (high adaptation, high shaping; Patagonia’s position), Aspirational Shaping (low adaptation, high shaping), Institutional Inertia (low adaptation, low shaping), and Reactive Conformity (high adaptation, low shaping).
Hvordan kan mission-drevne multinationale virksomheder både tilpasse sig eksisterende institutioner (love, standarder og normer) og samtidig være med til at forme nye? Dette studie undersøger virksomheder, der forfølger sociale eller miljømæssige mål sammen med økonomisk performance, med Patagonia, Inc. som casestudie. Vi viser, at en styringsmodel med troværdige forpligtelser—hvor stemmerettigheder er strukturelt adskilt fra økonomiske rettigheder—er en vigtig forudsætning for at gøre begge dele. Tilpasning til gældende institutioner skaber pragmatisk legitimitet (accept og tillid), som gør institutionsformning lettere. Formning skaber til gengæld nye regler, der reducerer fremtidige tilpasningsomkostninger, hvilket danner en positiv spiral. Vi præsenterer en Governance Simultaneity Model med tre mekanismer—troværdig forpligtelse, gensidig forstærkning og strategisk multiplicitet (flere strategier samtidig)—som virker på tværs af nationale og transnationale kontekster. Modellen forklarer, hvordan samtidighed kan føre til miljø-, social- og governance-resultater (ESG) og vedvarende konkurrencefordel via veje baseret på legitimitet, ressourcer, institutioner og innovation. Endelig tilbyder vi en firefelts typologi for institutionsengagement: Simultaneous Synergy (høj tilpasning, høj formning; Patagonias placering), Aspirational Shaping (lav tilpasning, høj formning), Institutional Inertia (lav tilpasning, lav formning) og Reactive Conformity (høj tilpasning, lav formning).
[This apstract has been rewritten with the help of AI based on the project's original abstract]