Environmental Adaptation by Small and Medium Sized Textile and Garment Companies in Vietnam—Is Governance an Issue?

Institutional theory emphasizes the social context in which firms operate and explains the role of institutions in shaping organizational responses. Following this theory, if a firm fails to conform to institutionalized norms, its legitimacy and survival is threatened. This chapter uses institutional theory as a tool to understand the influence of current institutional mechanisms on the adaptive capacity of textiles and garment small- and medium-sized enterprises (SMEs) in Vietnam in response to national and international environmental requirements. Field work undertaken in Vietnam in 2013 enabled 21 interviews with policymakers, experts, and textiles and garment enterprises. The interviews revealed a number of problems with the current environmental legislation as well as the governance system in Vietnam. These problems are considered as barriers for the environmental adaptation process at textiles and garment SMEs in Vietnam.