All for One and One for All: Institutions Shape Wineries’ Adaptation to Climate Change

Abstract

Firms join institutions voluntarily to gain legitimacy and commercial benefits. In return, they submit to membership rules and practice standards. When external conditions such as climate change, such voluntary institutional membership can pose a dilemma: climate-sensitive firms may enjoy important benefits from their membership while having little room to implement the requisite adaptation measures. To explore this undertheorized tension, we build a comparative case study of strategic adaptation to climate change. We focus on the wine industry in France, where firms voluntarily join collectives with strictly defined membership rules and practices, in comparison to their peers in California, who do not face these strict membership conditions. We find that when institutions highly constrain the repertoire of corporate adaptation strategies, wineries advocate stretching institutional boundaries to reestablish a fit between their practices and the changing climate. Institutions then pool resources and develop innovative long-term solutions for their members which both maintain their identity and selectively accommodate corporate adaptations. The insight that voluntary institutional membership orients firms towards identity-preserving, long-term, innovative practices enriches the literature on corporate climate change adaptation, institutional maintenance, and intertemporal orientation.