Co-evolution in an Institutionalized Environment

This paper examines the extent to which co-evolution can take place within a heavily constrained environment and how changes in the degree of institutionalization are relevant to opportunities for exercising strategic choice at the level of the firm. It addresses these questions through a detailed case study of a major Brazilian telecommunications company, Telemig, covering its life span of 27 years from 1973 to 2000. The insights obtained advance the theory of co-evolution by incorporating a political dimension of how organizations are transformed into new forms. In the case studied, new forms arose with radical changes in the rules affecting competition and with de-institutionalization of the economic regime by coalitions of actors who were strategically located in networks that crossed system levels. Although the Telemig case presents circumstances different to those usually addressed by studies of co-evolution, it nevertheless points to the virtues of combining a strategic choice approach with one that focuses on the isomorphic effects of institutional constraints.