Role of proto-institutions in advancing sustainable environmental practices in SMEs of Pakistan's Textile Sector

Aim: This study examines how cleaner and resource-efficient production practices are being promoted among small and medium sized textile manufacturers in Pakistan, a sector known for its high levels of pollution. The analysis focuses on the role of intermediaries – organisations such as NGOs, donor agencies and industry associations that work with textile manufacturers by offering technical and non-technical support. In institutional theory, such norms, once they begin to spread across an industry, are described as a proto-institutions. The study investigates how these intermediaries act as proto-institutional sponsors of emerging industry norms by helping firms adopt practices like energy-efficiency and waste reduction by adopting cleaner alternatives. Methodology: This qualitative study takes a moderate social constructionist position. It combines Institutional Theory, Stakeholder Theory and collaboration literature. The institutional theory explains how new norms and practices emerge and become established; stakeholder theory highlights how different actors influence organisational behaviours; and collaboration literature explores the horizontal and vertical networks in enabling collective action. Together, these perspectives provide a framing to understand the institutional role of intermediaries. We carried out Grounded analysis (Gioia et al., 2013) of primary data comprising forty-three semi structured interviews and field notes while secondary data was content analysed to understand the broader picture. We have adhered to the principles of transparency, self-reflexivity, replicability and generalisability through-out the research process to ensure quality and credibility of the study. Results: ‘Institutional voids’ – the absence of formal institutions necessary for working of markets (Mair and Marti, 2009) and ‘institutional gaps’ – the degree to which institutions are missing or present (Kolk, 2014, p. 3) are prominent features of institutional landscape of Pakistan’s textile sector. We have noted that national and international intermediaries emerged in these spaces of voids and gaps and took part in ‘Institutional work’ — a process in which individual or organisations take purposive actions to create, maintain or disrupt institutions (Lawrence et al., 2009). They imposed normative and mimetic pressure on firms to adopt cleaner and resource efficient practices in the sector. These institutional pressures created a proto-institution - “rules, practices, and technologies that are partially diffused and weakly entrenched but poised to become widely institutionalised” (Lawrence et al., 2002, p. 283). This proto-institution of resource efficiency and cleaner production is coexisting with formal institutions as compensatory institution to transform SMEs to environmentally compliant isomorphs (firms). Contributions and Implications: Our theoretical contribution lies in extending ‘proto-institutions’ and ‘institutional work’ to an understudied context. Empirically, we have contributed to the scant empirical literature on proto-institutions that is presently focused on large sized organisations of services sector of the developed world. These insights from this study can help policymakers in overcoming the double-pronged challenge: the weakness in formal institutions and the urgent need to address environment-degrading practices of smaller manufacturers.