Securing the licence to act: a foundational capability

Purpose – The paper aims to show how resource‐based views of the firm inadequately address the strategic importance of acquiring and using symbolic capital within the wider discursive institutional environment. Design/methodology/approach – A single case using publicly available data on the strategic activities of the oil and gas firm BP was constructed. Findings – Combining case data with a review of literature on firm capabilities and organization studies, the paper identifies a previously unacknowledged foundational strategic capability: securing a licence to act. It finds BP strategists understanding this capability as the realization of credibility and authority arising from the conscious and skilled articulation of firm commitments and activities. Originality/value – Generalising from the case, the paper argues for the importance to firm performance of an understanding of how capabilities evolve in relation to the use of symbolic capital within inherently complex institutional environments. This leads beyond a purely economic view of institutional settings to cover market‐based political and social interests.