The institutionalization process of governance in interorganizational networks: Case studies in virtual business communities

This study analyzes how governance's institutionalization process occurs in inter-organizational networks called Virtual Business Communities (VBC). Using institutional theory as a basis, we analyze how governance was performed in two VBCs in the flower and ornamental plants business sector. Data were collected through interviews, non-participant observation, and documents and analyzed with the content analysis technique. Results reflect the importance of members' symbolic and material interest in legitimizing the institutionalization process and the role of prior cooperation in physical environments when institutionalizing governance in VBCs. Therefore, we contribute to the theory by showing that previous cooperation in physical environments contributes to institutionalizing governance in virtual environments. •We examine the institutionalization process of governance within inter-organizational networks in virtual environments.•Prior cooperation and governance rules in physical environments supports governance institutionalization in VBCs.•Network members help legitimate VBCs by exposing their brand, developing actions to attract customers and publicize products.•We show the importance of the material interest to normative legitimation in the institutionalization process.•We show the utility of institutional theory to the analysis of the institutionalization process of governance in VBCs.