Navigating institutional demands: Organizational responses to institutional complexity in megaproject delivery

Abstract

Megaprojects are commonly exposed to multiple, conflicting institutional demands, making them notoriously difficult to manage. Drawing on organizational institutional theory, the paper explores organizational responses to deal with institutional complexity on a transnational pipeline project spanning China, Kazakhstan, Uzbekistan, and Turkmenistan. The findings show how conflicting institutional demands across the involved countries were dealt with through the establishment of distinct organizational strategies and structures when a large Chinese petroleum organization entered into two separate project companies, each responsible for a section of the pipeline. One relied on a manipulation strategy where institutional complexity was reconciled by selectively coupling to certain institutional demands. The other handled competing demands through a compromise strategy involving the creation of a compartmentalized organizational structure. While these results confirm findings from prior work that the nature and internal representation of demands exerted on an organization shape its response strategy, we contribute further by showing how distinct contextual characteristics of megaprojects influence the specific responses adopted to deal with institutional complexity.