Bending coercive institutions: toward water sustainability in Brazil

Abstract

The management of natural resources by industry is coming under increasing public scrutiny. This article investigates the responses of firms in two industrial textile clusters in Brazil to the enforcement of water management legislation. Its findings demonstrate a divergence in typologies that reflects the ecological limits, law-enforcement policies and firms’ resources. The article extends our understanding of the agency of organizations to respond to institutional pressures to become ecologically sustainable organizations. Our findings provide insights for policy design in times of increasingly catastrophic pollution in regions that are immersed in global competition. We describe successful strategies of development policy that are capable of creating a space in which to negotiate the gradual enforcement of environmental legislation. We also show that strict law enforcement strategies can drive firms into the informalization of their economic activities, a highly problematic strategic response in achieving sustainability in emerging markets.