Coevolution of Institutions and Corporations in Emerging Economies: How the Salim Group Morphed into an Institution of Suharto's Crony Regime

Authors

  • Marleen Dieleman,

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    1. National University of Singapore
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  • Wladimir M. Sachs

    1. National University of Singapore
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      In memory of Wladimir Sachs: In the course of publishing this article, my co-author Wladimir Sachs unfortunately passed away. I would like to dedicate this article to Wlad, whom I will miss as a dear friend, an original thinker, a fierce fighter against unnecessary rules and outdated conventions, and an inspiring mentor.


Marleen Dieleman, National University of Singapore, NUS Business School, 1 Business Link, Singapore 117592, Singapore (marleendieleman@hotmail.com).

Abstract

abstract  We investigate whether large family groups in emerging economies can proactively change their environment. We use a coevolutionary approach, which accounts for the influence of context on the entrepreneur and for the freedom of the latter to modify it. We find that entrepreneurs can shape institutions to their advantage, illustrated by the Salim Group, which achieved growth by aligning with and influencing politicians, eventually ‘morphing into an institution’. We unravel unique coevolutionary patterns, which we use to extend existing theories. Our first contribution is to initiate a new line of inquiry in coevolution theory, focusing on individual companies coevolving with institutions. Secondly, we document factors that increase and decrease strategic choice for family groups in emerging economies. Thirdly, we find that the Salim Group became part of the crony Suharto regime. The group became both an institutional entrepreneur and an entrepreneurial institution, demonstrating that companies and institutions are not necessarily mutually exclusive.

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