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The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields Author(S): Paul J

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The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields Author(S): Paul J The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields Author(s): Paul J. DiMaggio and Walter W. Powell Source: American Sociological Review, Vol. 48, No. 2 (Apr., 1983), pp. 147-160 Published by: American Sociological Association Stable URL: http://www.jstor.org/stable/2095101 Accessed: 17/09/2009 16:46 Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at http://www.jstor.org/page/info/about/policies/terms.jsp. JSTOR's Terms and Conditions of Use provides, in part, that unless you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal, non-commercial use. Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at http://www.jstor.org/action/showPublisher?publisherCode=asa. Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed page of such transmission. JSTOR is a not-for-profit organization founded in 1995 to build trusted digital archives for scholarship. We work with the scholarly community to preserve their work and the materials they rely upon, and to build a common research platform that promotes the discovery and use of these resources. For more information about JSTOR, please contact [email protected]. American Sociological Association is collaborating with JSTOR to digitize, preserve and extend access to American Sociological Review. http://www.jstor.org THE IRON CAGE REVISITED: INSTITUTIONAL ISOMORPHISM AND COLLECTIVE RATIONALITY IN ORGANIZATIONAL FIELDS* PAUL J. DIMAGGIO WALTER W. POWELL Yale University What makes organizations so similar? We contend that the engine of rationalization and bureaucratization has moved from the competitive marketplace to the state and the professions. Once a set of organizations emerges as a field, a paradox arises: rational actors make their organizations increasingly similar as they try to change them. We describe three isomorphic processes-coercive, mimetic, and normative-leading to this outcome. We then specify hypotheses about the impact of resource centralization and dependency, goal ambiguity and technical uncertainty, and professionalization and structuration on isomorphic change. Finally, we suggest implications for theories of organizations and social change. In The Protestant Ethic and the Spirit of capitalistfirms in the marketplace;competition Capitalism, Max Weber warned that the ra- amongstates, increasingrulers' need to control tionalist spirit ushered in by asceticism had their staff and citizenry; and bourgeois de- achieved a momentum of its own and that, mands for equal protection under the law. Of under capitalism, the rationalistorder had be- these three, the most importantwas the com- come an ironcage in which humanitywas, save petitive marketplace. "Today," Weber for the possibility of propheticrevival, impris- (1968:974)wrote: oned "perhaps until the last ton of fossilized coal is burnt" (Weber, 1952:181-82). In his it is primarilythe capitalistmarket economy essay on bureaucracy,Weber returnedto this which demands that the official business of theme, contending that bureaucracy, the ra- administrationbe dischargedprecisely, un- tional spirit'sorganizational manifestation, was ambiguously, continuously, and with as so efficient and powerfula meansof controlling much speed as possible. Normally, the very men and women that, once established, the large, modern capitalist enterprises are momentumof bureaucratizationwas irreversi- themselves unequalledmodels of strict bu- ble (Weber, 1968). reaucraticorganization. The imagery of the iron cage has haunted We argue that the causes of bureaucratiza- students of society as the tempo of bureau- tion and rationalizationhave changed. The bu- cratizationhas quickened. But while bureau- reaucratizationof the corporationand the state cracy has spread continuously in the eighty have been achieved. Organizationsare still be- years since Weber wrote, we suggest that the coming more homogeneous, and bureaucracy engine of organizational rationalization has remains the common organizational form. shifted. For Weber, bureaucratizationresulted Today, however, structuralchange in organi- from three related causes: competitionamong zations seems less and less driven by competi- tion or by the need for efficiency. Instead, we will contend, bureaucratization and other forms of organizationalchange occur as the *Direct all correspondence to: Paul J. DiMaggio result of processes that make organizations and Walter W. Powell, School of Organization and more similarwithout necessarily makingthem Management, Yale University, Box IA, New Haven, CT 06520. more efficient. Bureaucratizationand other A preliminary version of this paper was presented forms of homogenization emerge, we argue, by Powell at the American Sociological Association out of the structuration(Giddens, 1979)of or- meetings in Toronto, August 1981. We have bene- ganizational fields. This process, in turn, is fited considerably from careful readings of earlier effected largely by the state and the profes- drafts by Dan Chambliss, Randall Collins, Lewis sions, which have become the great ration- Coser, Rebecca Friedkin, Connie Gersick, Albert alizers of the second half of the twentiethcen- Hunter, Rosabeth Moss Kanter, Charles E. tury. For reasons that we will explain, highly Lindblom, John Meyer, David Morgan, Susan con- Olzak, Charles Perrow, Richard A. Peterson, Arthur structuredorganizational fields provide a Stinchcombe, Blair Wheaton, and two anonymous text in which individualefforts to deal ration- ASR reviewers. The authors' names are listed in ally with uncertaintyand constraintoften lead, alphabetical order for convenience. This was a fully in-the aggregate,to homogeneity in structure, collaborative effort. culture, and output. American Sociological Review 1983, Vol. 48 (April: 147-160) 147 148 AMERICAN SOCIOLOGICAL REVIEW ORGANIZATIONALTHEORY AND prehends the importance of both connected- ORGANIZATIONALDIVERSITY ness (see Laumann et al., 1978) and structural equivalence (White et al., 1976).1 Muchof modernorganizational theory posits a The structure of an organizational field can- diverse and differentiated world of organi- not be determined a priori but must be defined zations and seeks to explain variationamong on the basis of empirical investigation. Fields organizationsin structure and behavior (e.g., only exist to the extent that they are institu- Woodward, 1965; Child and Kieser, 1981). tionally defined. The process of institutional Hannanand Freemanbegin a majortheoretical definition, or "structuration," consists of four paper(1977) with the question, "Whyare there parts: an increase in the extent of interaction so many kinds of organizations?"Even our in- among organizations in the field; the vestigatory technologies (for example, those emergence of sharply defined interorgani- based on least-squarestechniques) are geared zational structures of domination and patterns towardsexplaining variation rather than its ab- of coalition; an increase in the information load sence. with which organizations in a field must con- We ask, instead, why there is such startling tend; and the development of a mutual aware- homogeneityof organizationalforms and prac- ness among participants in a set of organi- tices; and we seek to explain homogeneity,not zations that they are involved in a common variation.In the initialstages of theirlife cycle, enterprise (DiMaggio, 1982). organizationalfields display considerable di- Once disparate organizations in the same versity in approachand form. Once a field be- line of business are structured into an actual comes well established, however, there is an field (as we shall argue, by competition, the inexorable push towards homogenization. state, or the professions), powerful forces Coser, Kadushin,and Powell (1982)describe emerge that lead them to become more similar the evolution of American college textbook to one another. Organizations may change publishingfrom a period of initial diversity to their goals or develop new practices, and new the currenthegemony of only two models, the organizations enter the field. But, in the long largebureaucratic generalist and the small spe- run, organizational actors making rational de- cialist. Rothman(1980) describes the winnow- cisions construct around themselves an envi- ing of several competing models of legal edu- ronment that constrains their ability to change cation into two dominant approaches. Starr further in later years. Early adopters of organi- (1980)provides evidence of mimicryin the de- zational innovations are commonly driven by a velopment of the hospital field; Tyack (1974) desire to improve performance. But new prac- and Katz (1975)show a similarprocess in pub- tices can become, in Selznick's words lic schools; Barnouw (1966-68) describes the (1957:17), "infused with value beyond the tech- development of dominant forms in the radio nical requirements of the task at hand." As an industry; and DiMaggio (1981) depicts the innovation spreads, a threshold is reached be- emergence of dominantorganizational models yond which adoption provides legitimacy for the provision of high culture in the late rather than improves performance (Meyer and nineteenthcentury. Rowan, 1977). Strategies that are rational for What we see in each
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