Institutional permissiveness in the context of government-business relations




Political Corporate Social Responsibility, Institutional Theory, Emerging Markets, Business-Society


Purpose - This article explores the extent to which business–government relations permeate socially irresponsible business activities. While existing theory provides traction in explaining the strength of the pressures to conform that emanate from the institutional environment, it does not adequately explain the conditions under which businesses might exercise discretion in choosing whether or not to conform to local standards of appropriateness and how local actors organize their responses accordingly.


Methodology - The empirical evidence is based on an in-depth longitudinal case study developed in an industrial district of Fortaleza, Brazil. Data were collected from three sources, including semi-structured interviews. An inductive thematic analysis of narratives was conducted to investigate the interactions between the different institutional actors and their experiences of institutional change and renegotiation.


Findings - It was found that the institutionalized forms of business–government relations are fundamentally permissive and personalized, being based on meeting specific and mutually opportunistic demands. We show that institutional permissiveness can make it possible for large firms to dominate an industrial area and force the government to reduce law enforcement. We demonstrate the historical evolution of forms of the appropriation of space and natural resources.


Originality - Our theoretical contribution is to the concept of institutional permissiveness. Unlike other institutional streams, we argue that the concept of the institutional void is inadequate to the task of understanding business–government relations in emerging markets. We show how an institutional configuration can emerge that sustains the power relations and resource appropriations that reproduce social relations distinct from those found in the Anglo-American institutional environment, which does not configure institutional voids.


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Author Biographies

André Luiz Castro de Sousa, Universidade Federal do Ceará

Mestre em Administração e Controladoria pelo Programa de Pós-Graduação em Administração e Controladoria da Universidade Federal do Ceará. Bacharel em Secretariado Executivo pela Universidade Federal do Ceará.

Robson Silva Soe Rocha, Aarhus University

Ph.D em Business and Economics pela Copenhagen Business School - Dinamarca. Professor Associado do Departamento de Administração da Aarhus University.

Mônica Cavalcanti Sá de Abreu, Universidade Federal do Ceará

Bolsista de Produtividade 1D do CNPq, Professora Associado III da Universidade Federal do Ceará; FEAAC. Pós Doutorado em Industrial Manufacturing - University of Cambridge - Institute for Manufacturing (IfM) - Doutorado em Engenharia de Produção (UFSC), Mestrado em Tecnologia de Processos Quimicos e Bioquimicos (EQ/UFRJ), Graduação em Engenharia Quimica (UFC)


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How to Cite

Sousa, A. L. C. de, Rocha, R. S. S., & Abreu, M. C. S. de. (2020). Institutional permissiveness in the context of government-business relations. Revista De Administração Da UFSM, 13(5), 1073–1092.