Managing institutional complexity through strategy and structure: the experience of Sri Lanka’s peak business interest associations

Abstract

This study seeks to better understand the way, in which business interest associations in a developing country address issues associated with the plurality of logics and interest among their members. The dilemma that business associations face, when it comes to representing the various interests of their constituents under a single banner, is adequately documented. But there is a gap in empirical literature on the way that associations successfully address this dilemma from the top down, especially in a developing country like Sri Lanka. We present a case study of the four most prominent peak national business associations in Sri Lanka – and their attempts at reconciling the diverse voices and interests of their members. We find that insights from contemporary institutional logics literature are particularly helpful in explaining the strategic and structural means, by which Sri Lankan business associations address the issue of presenting a united front for the very diverse groups of firms and industries that make up their membership. Specifically, our observation shows that Sri Lanka’s peak business associations respond to the diverse, and at times competing, interests of their members in ways that are consistent with Kraatz and Block’s characterisation of organisational responses to institutional complexity, namely through: elimination/marginalisation, mediation, compartmentalisation and detachment.