9781412931236-Intro 5/19/08 4:24 PM Page 1

Introduction

Royston Greenwood, Christine Oliver, Kerstin Sahlin and Roy Suddaby

The motivation for this Handbook arose from 2. We focus upon ‘organizational institutionalism’. a conversation with Don Palmer, who raised Several variants of institutional analysis have the question of whether organization theories been identified. Hall and Taylor (1996) propose in general have life cycles. Given the prolif- three basic schools of thought: rational choice eration of theoretical paradigms, do organi- institutionalism, historical (comparative) institu- zation theories build into coherent tionalism, and organizational (sociological) institutionalism. The material covered in this conceptual frameworks supported by dili- Handbook does centre upon organizational insti- gently conducted empirical work, or do they tutionalism, but we are less sure of the accuracy fragment into proliferated confusion? That of the depictions provided by Hall and Taylor conversation never proceeded to a compara- (1996) or Campbell (2004). In fact, we propose to tive assessment of organization theories. But show how institutionalist research applied to it did lead to the present volume. It seemed, organizational behaviour has evolved over time in late 2004, when the idea of a Handbook and that much of this work does not fit neatly was mooted, an appropriate moment to take into the classifications offered by Hall or stock of the institutional perspective on Campbell. Our stance is not to ask, what is dis- organizations because we were approaching tinctive of ‘organizational institutionalism’? But, the thirtieth anniversary of seminal papers instead: ‘What does the institutional perspective tell us about organizational behaviour?’ that not only triggered revitalization of inter- 3. Our timeframe emphasizes contributions made est in the role of institutions but became since 1977. The late 1970s were great years for known as the new institutionalism. organization theory. In a very short span of years, It is important at the outset to set down at least three of the enduring perspectives within certain scope conditions for this volume: organizational theory were initiated: resource dependence theory, ecology theory, and institu- 1. Our interest is in understanding organizations. tional theory. In 1977, two papers (Meyer & How and why do organizations behave as they Rowan, 1977; Zucker, 1977) introduced what do, and with what consequences? These are the became known as new institutionalism. We do overarching questions of organization theory. not deny that institutions and institutional ‘Organizational institutionalism’ is the applica- processes had been examined prior to that date tion of the institutional perspective to those (see Hirsch, Chapter 33 this volume). On the con- questions. trary, the study of institutions has a long and 9781412931236-Intro 5/19/08 4:24 PM Page 2

2 THE SAGE HANDBOOK OF ORGANIZATIONAL INSTITUTIONALISM

respected tradition (see DiMaggio & Powell, In this section we review how the ‘so-called 1991; Hinings & Tolbert, Chapter 19 this volume; institutional perspective’(Carroll, Goodstein & and Barley, Chapter 20 this volume). However, Gyenes, 1988: 238) has evolved since 1977. the body of institutional work post-1977 has a By doing so we are, in one sense, retrospec- focus that warrants our treatment of 1977 as a tively tracing the social construction of insti- starting point. tutional theory over the past three decades. We review how the term has been used in the main organization theory journals. We examine how theorists and researchers have understood THE SOCIAL CONSTRUCTION OF the term and we uncover the organizational ‘INSTITUTIONAL THEORY’ issues and questions to which the theory has been applied. We suggest certain pivotal Institutional theory is perhaps the dominant moments when either the definition or the approach to understanding organizations. Its application of the theory shifted. Our motiva- popularity is shown in Figure 1.1, which tion is to understand what makes an institu- reports the number of citations to Meyer and tional story different from other theoretical Rowan (1977). The steady rise in citations is perspectives. This is not an easy task given impressive. And it is clear from these statis- institutional theory’s ‘definitional thicket’ tics that institutional theory is an entrenched (Zucker, 1987: 457). Moreover, any attempt and prevalent approach. Moreover, as to arrange nearly 30 years of research and Haveman and David (Chapter 24 this volume) theorizing can be challenged. Ours, we admit, point out, institutional theory has dominated is a subjective arrangement and our procedure submissions to the Organization and Manage- means we may miss hidden nuggets. ment Theory Division of the Academy of Nevertheless, there are some reasonably obvi- Management. ous temporal signposts. Thus, we begin by But what is it? And why is it so popular? examining the period between 1977 and What aspects of organizational behaviour 1983, when several papers established the does it address? And how well does it do so? foundations of the ‘new’ institutionalism.

300

250

200

150

100 Number of citations 50

0

1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 Years Meyer & Rowan DiMaggio & Powell Hannan & Freeman Pfeffer & Salancik

Figure 1.1 Citations to Meyer & Rowan (1977), DiMaggio & Powell (1983), Hannan & Freeman (1977) and Pfeffer & Salancik (1978) 9781412931236-Intro 5/19/08 4:24 PM Page 3

INTRODUCTION 3

Foundations: 1977–83 Following Weber, Meyer and Rowan were interested in the rationalization and diffusion The conceptual foundations of modern orga- of formal bureaucracies in modern society, nizational institutionalism were established which they saw as arising from two condi- in the works of Meyer and Rowan (1977), tions: ‘the complexity of networks of social Zucker (1977), Meyer and Rowan (1983), organization and exchange’ and ‘the institu- DiMaggio and Powell (1983), Tolbert and tional context’ (1977: 346). Most attention, Zucker (1983), and Meyer and Scott (1983). both in their paper and in subsequent work, Collectively, these papers set the course for was given to the institutional context, but it is much of the next three decades, although, as worth remembering that ‘relational’ net- we shall note, many of the works that fol- works were seen as important influences. lowed were sometimes selective in their Meyer (1977) and Scott (1983), for example, interpretations. anticipated that complex networks of In the late 1970s, prevailing perspectives interactions between organizations would within organization theory largely portrayed increase the occurrence of rationalized organizations as agentic actors responding to myths, that complex and conflicted fields situational circumstances. Senior managers would give rise to a greater variety of organi- steered organizations by interpreting their zational forms, and that field complexity contexts and taking appropriate actions. would increase the likelihood of myths Structural-contingency theory saw organiza- becoming codified into formal regulations tions adapting to circumstances of scale, and laws. Finally, they pointed out that task uncertainty and strategic scope by appro- rationalized myths are diffused through rela- priate selection of structural arrangements. tional networks. Networks/fields are thus Resource-dependence theory analyzed how both antecedents of rationalized myths and organizations sought to affect the supply of vehicles for their transmission (most clearly critical resources by managing their depend- set out by DiMaggio & Powell, 1983 Ð see encies on other organizations (e.g. by careful below).1 placement of directors). Even the behavioural Nevertheless, the idea that captured the theory of the firm assumed adaptation to imagination was that organizations are influ- market and performance circumstances, enced by their institutional context, i.e. by albeit within the limits of bounded rationality. widespread social understandings (rational- Ecological theory was the exception, empha- ized myths) that define what it means to be sizing the inability of organizations to be rational. Elsewhere, and less prosaically, adaptively managed, although even in this Meyer and Rowan (1983: 84) referred to the case the problem was not that managers could institutional context as ‘the rules, norms, and not effect organizational adaptation, but that ideologies of the wider society’. Zucker (1983: they could not do so quickly enough. Each of 105) looked to ‘common understandings of these theoretical perspectives focused on the what is appropriate and, fundamentally, mean- relationship between an organization and its ingful behaviour’. And Scott (1983: 163) environment and examined how organiza- offered ‘normative and cognitive belief sys- tions adapted Ð or attempted to adapt Ð so as tems’. The underlying focus of early institu- to secure an appropriate ‘fit’. The environ- tional theorists, in short, was the role of shared ment, moreover, was the ‘technical’/market meanings, institutional processes (such as setting, much as assumed in accounts pro- cultural prescriptions, Zucker, 1977) and insti- vided by economists, and the behaviour of tutional conformity.2 executives (organizations) was intendedly Because organizations are expected to (if boundedly) rational. It was against this behave rationally, Meyer and Rowan pro- context that Meyer and Rowan’s (1977) cele- posed that rationalized myths are accepted brated paper appeared. as prescriptions of appropriate conduct. 9781412931236-Intro 5/19/08 4:24 PM Page 4

4 THE SAGE HANDBOOK OF ORGANIZATIONAL INSTITUTIONALISM

Organizations conform to them Ð i.e. become equated institutionalized organizations with isomorphic with their institutional context Ð the not-for-profit and governmental sectors, in order to signal their social fitness and gain precipitating a particular stream of research legitimacy in the eyes of critical constituen- (see below) that contrasted organizations in cies. It is by ‘appearing to be rational’ (Scott, highly institutionalized settings with those 1983: 160) that organizations avoid social where institutional influences were pre- censure, minimize demands for external sumed to be much weaker. Later, institutional accountability, improve their chances of ideas would be unapologetically applied securing necessary resources and raise their to all organizations, and technical con- probability of survival. texts would be treated as institutional However, it was believed that conforming constructions. to institutional rules might conflict with the Given the originality of Meyer and requirements of technical efficiency (Meyer Rowan’s (1977) paper, it inevitably con- & Rowan, 1977: 310; Zucker, 1987: 445). tained underdeveloped themes and some Therefore, conformity may be ceremonial, conceptual ambiguities. There was, for ‘a form of confidence game’ (Pfeffer, 1982: example, no definition of ‘institution’. 246) producing ‘surface isomorphism’ Instead, the reader is left to assume that insti- (Zucker, 1987: 672). Ceremonial conformity tutions are taken-for-granted rationalized is achieved by deliberately decoupling sym- myths. Other definitions of ‘institution’ bolic practices from the organization’s tech- appeared early in the institutional literature, nical core. Decoupling occurs, in other with inevitable later confusion. One defini- words, if the prescriptions of institutional tion referred to institutions as types of organ- contexts are contradictory to the exigencies izations, such as prisons, mental hospitals, of technical contexts. Ceremonial conformity nursing homes, and orphanages. Another may also occur because institutional contexts definition referred to institutions as sectors are often pluralistic and inconsistent (an (see Hasse & Krücken, Chapter 22 this observation of some theoretical significance, volume), such as ‘education’, ‘büsiness’, and as will be shown later). The idea set out in the ‘armies’. A final definition echoed antecedent 1977 paper, that institutional prescriptions work (e.g. Hirsch, 1975), equating institu- run counter to efficiency considerations, was tions with the major agencies of the political qualified by Meyer and Scott (1983), who economy (e.g. unions, the professions, regu- referred to institutional and technical latory agencies of the State). It is thus not exigencies as dimensions that can vary in surprising that Haveman and David (Chapter their relative salience within a given setting. 24 this volume) should challenge institution- A more fundamental challenge would come alists ‘to reach agreement on the meaning of from Carroll, Lee and Rao, (1986; see also central constructs and wean themselves from Meyer, Scott & Strang, 1987; Zucker, 1987; using the vapid term institution, which means Powell, 1991) who pointed out that technical everything and therefore nothing’. (For a contexts (e.g. markets) are themselves insti- contrary view, see Czarniawska, Chapter 32 tutionally defined. this volume.). All organizations were envisaged as sub- Our purpose here is not to provide the or ject to institutional influences, but not to the even a definition of institution; rather, we are same extent. Organizations whose technolo- interested in tracing how others defined it gies are not clearly linked to given outcomes over the past 30 years. Nevertheless, and for and whose outputs are difficult to evaluate are the record, we understand the term to refer to particularly sensitive to the need to appear more-or-less taken-for-granted repetitive rational (Meyer & Rowan referred to them as social behaviour that is underpinned by nor- institutionalized organizations). Perhaps not mative systems and cognitive understandings surprisingly, much early institutional work that give meaning to social exchange and 9781412931236-Intro 5/19/08 4:24 PM Page 5

INTRODUCTION 5

thus enable self-reproducing social order. ‘Institutionalization’ and ‘institutional- Institutions are characterized by lack of overt ized’ were defined by Meyer and Rowan. enforcement, their survival resting upon ‘rel- Institutionalization is the process by which atively self-activating social processes’ ‘social processes, obligations, or actualities (Jepperson, 1991: 145; see also Zucker, come to take on a rule-like status in social 1977). Although institutions exist at the level thought and action’ (Meyer & Rowan, 1977: of the individual (e.g. a handshake in western 341). Something is ‘institutionalized’ when it societies), the organization (e.g. the use of has that rule-like status. In a famous turn of formal accounting controls, particular struc- phrase, Zucker concluded that institutional- tures, and impersonal personnel practices), ization means that ‘alternatives may be liter- the field (e.g. hierarchies of status between ally unthinkable’ (1983: 5). Tolbert and categories of occupations or between organi- Zucker (1983: 25) suggested three indicators zations that affect hiring patterns and of institutionalized practices: they are widely alliances), or society (e.g. a legal system followed, without debate, and exhibit based upon due process), organizational permanence. institutionalism is primarily interested in The notion of institutionalized behaviour institutions and institutional processes at the as something widely practiced and taken- level of the organization and the organiza- for-granted, however, was not entirely unam- tional field (although not exclusively Ð see, biguous. On the one hand, Meyer and Rowan for example, Djelic & Quack, Chapter 11; referred to ‘binding’ and ‘powerful institu- Drori, Chapter18; and J. Meyer, Chapter 34 tional rules’ that are ‘in some measure this volume). beyond the discretion of any individual par- Meyer and Rowan also omitted to provide a ticipant or organization’ (1977: 344). formal definition of ‘institutional context’, Similarly, Tolbert and Zucker (1983: 22) other than that it contains rationalized myths. referred to organizations as ‘captives of the Tolbert (1985: 2) followed suit: ‘widespread institutional environment in which they social conceptions of appropriate organiza- exist’. In this imagery, institutions are ‘envi- tional form and behaviour constitute the insti- ronments’ that are ‘out there’ and to which tutional environment of organizations’. As we organizations respond (Zucker, 1987). note below, over the next two decades ‘institu- Zucker (1977), in a perceptive and rigorous tional context’ would continue to prove a trou- application of Berger and Luckman’s (1967) blesome concept, partly because the term was ideas, insisted that ideas and practices are used to cover two very different ideas Ð con- institutionalized when they have achieved the text as symbolic/cultural influences (as in the attributes of exteriority and objectivity. As Tolbert quote), and context as the regulatory such (and this is a distinctive feature of framework of state and professional agencies Zucker’s account), institutionalized acts (e.g. Scott & Meyer, 1983). The latter require no monitoring or enforcement but approach is closer to that of institutional econ- persist solely through transmission from one omists than to our reading of Meyer and generation to another. Rowan (1977). To us, accounts of how regu- Yet, on the other hand, notions of ceremo- latory agencies (institutions) shape organiza- nial adoption and decoupling imply foresight tional behaviour are incomplete institutional and choice. Even more striking are state- explanations unless they show how regulatory ments that ‘organizations … often play active frameworks embody, enact or transmit societal roles in shaping [institutional] contexts’ and norms and values. Otherwise, referring to reg- that ‘powerful organizations attempt to build ulatory frameworks as ‘the institutional con- their goals and procedures directly into soci- text’ risks confusing institutional theory with ety as institutional rules’ (Meyer & Rowan, resource-dependence or political-economy 1977: 29Ð30). Similarly, when Meyer and explanations.3 Rowan advise that in highly institutionalized 9781412931236-Intro 5/19/08 4:24 PM Page 6

6 THE SAGE HANDBOOK OF ORGANIZATIONAL INSTITUTIONALISM

contexts managers need to exercise ‘saga- That idea arose from DiMaggio and Powell cious conformity’ if they are to understand (1983), who began from the same motivation ‘changing fashions and governmental pro- as Meyer and Rowan, namely, to understand grammes’, they imply a level of active man- the rationalization of modern society. But agement as organizations adapt to their DiMaggio and Powell reframed this question institutional environments. Rao and Kenney’s into: ‘why is there such startling homogene- examination (Chapter 13 this volume) of ity of organizational forms and practices?’ new forms as settlements is a compelling (1983: 147). The answer, they proposed, illustration of this active management as an resides in the structuration of organizational antecedent to institutionalization. This recip- fields. As fields mature, ‘there is an inexorable rocal tension between institutions as cultur- push towards homogenization’ as ‘powerful ally hegemonic (with organizations ‘bound’ forces emerge that lead them (organizations) by taken-for-granted rationalizations) and to become more similar to one another’ (1983: institutions as enacted and reconstructed 148). Homogenization, point out DiMaggio (with organizations responding ‘strategically’ and Powell, is field or sector-specific, to institutional pressures) is a ‘long-standing although this does not preclude ideas diffus- tension’ (Hinings & Tolbert, Chapter 19 this ing across sectors because fields have their volume) within sociology and thus, not sur- own histories and institutional processes. prisingly, would become a central theme in Boxenbaum and Jonsson (Chapter 2 this institutional thinking. volume) suggest that DiMaggio and Powell’s In outline, then, the basic elements of the emphasis upon field-level structuration institutional thesis put forward in the late processes was a nuanced advance from the 1970s and early 1980s were as follows: initial institutional statements, because it ‘represented a move towards a more cogni- 1. organizations are influenced by their institutional tive and constitutive view of organizations’. and network contexts.The institutional context con- However, DiMaggio and Powell’s framing of sists of rationalized myths of appropriate conduct; the problem was often misinterpreted by later 2. institutional pressures affect all organizations but researchers, who treated homogeneity as especially those with unclear technologies and/or synonymous with institutional isomorphism, difficult to evaluate outputs. Organizations when in fact homogeneity is only one possi- especially sensitive to institutional contexts are ble effect of institutional pressures and one institutionalized organizations; that is not, in our view, a definitional one.4 3. organizations become isomorphic with their We elaborate upon this point later. institutional context in order to secure social The most cited contribution of the 1983 approval (legitimacy), which provides survival benefits; paper was its discussion of how institutional- 4. because conformity to institutional pressures ization actually occurs. DiMaggio and may be contrary to the dictates of efficiency, Powell proposed three ‘mechanisms of diffu- conformity may be ceremonial, whereby symbolic sion’: coercive, which occur when external structures are decoupled from an organization’s constituents Ð typically powerful organiza- technical core; tions, including the State Ð cajole or force 5. institutionalized practices are typically taken-for organizations to adopt an organizational ele- granted, widely accepted and resistant to ment; normative, which arise primarily from change. professionalization projects; and mimetic, which occur when uncertain organizations These elements awaited empirical verifi- copy others either because others’ actions are cation. believed to be rational and/or because of a The above summary contains no statement desire to avoid appearing deviant or back- that organizations converge upon the same ward. These mechanisms of diffusion are response to their institutional environments. usefully considered as explaining the 9781412931236-Intro 5/19/08 4:24 PM Page 7

INTRODUCTION 7

motivation for adoption. Coercive isomor- narrowly whereas later work embraced a widen- phism occurs because organizations are ing array of issues and concerns. Thus, the initial motivated to avoid sanctions available to line of inquiry looked at the adoption of the organizations on which they are dependent. bureaucratic organizational form within a given Normative isomorphism occurs because sector or field (i.e. at the process of rationaliza- organizations are motivated to respect social tion), whereas later inquiries looked at a wider range of organizational forms, practices and obligations. And mimetic isomorphism behaviours, and at the construction of the field occurs because organizations are motivated itself. But the central focus is the organization by their interpretation of others’ successful and its relationship with its context. 5 behaviours. As Mizruchi and Fein (1999) 2. the essential answer provided by institutional and Boxenbaum and Jonsson (Chapter 2 this theory emphasized (and still emphasizes) the volume) note, most empirical studies have play of widely-shared and taken-for-granted been portrayed (often erroneously) as studies social values and ideas. As Meyer and Rowan of mimetic isomorphism, although, as we (1977: 346) famously put it: ‘institutional theo- note momentarily, this is not necessarily ries in their extreme forms define organizations indicative of institutional processes. Hasse as dramatic enactments of the rationalized myths and Krücken, (Chapter 22 this volume) pervading modern societies’. Critically, the insti- tutional explanation is not derived from the cal- return to European scholars Ð such as culated self-interest of organizational actors, nor Luhman and Giddens Ð who inspired early from the imperatives of instrumental functional- institutional theorists, in order to show how ity. Instead, the institutional explanation empha- institutional theory could overcome simpli- sizes that organizations seek legitimacy and fied notions of homogeneity and instead survival not efficiency, and highlights the role of develop better explanations of heterogeneity cognition and obligation, not self-interest. and variation. One insight in the DiMaggio and Powell paper that was much less influential was the Early years: 1983–91 connection between institutional processes and ‘the influence of elite interests’ (1983: 147). Immediately following publication, most This insight was largely inspired by Bordieu’s citations to Meyer and Rowan (1977) and notion of fields (e.g. Mohr, 1998). The same Zucker (1977) were incidental rather than theme is evident in Tolbert and Zucker (1983), substantive. Authors simply acknowledged and would be raised again by DiMaggio that social values affect organizations and/or (1988). However, attention to the political that organizations adopt structures in order to consequences of institutional processes would legitimize themselves.6 Often, these ideas be largely lost in subsequent institutional were juxtaposed against those of structural work (and in much of organization theory in contingency theory. Few attempts were made general Ð see Stern & Barley, 1996; Perrow, to actually test institutional ideas and, over- 2002; Hinings & Greenwood, 2002). all, Meyer and Rowan’s influence was rather To take stock. By 1983 the initial founda- modest.7 North American reviews of organi- tions of organizational institutionalism had zation theory that appeared in the early to been established. Two features are worth mid 1980s gave sparse attention to institu- emphasizing because they are defining tional work (e.g. Van de Ven & Joyce, 1981; themes of our subject matter: Zey-Ferrell, 1981; Astley & Van de Ven, 1983; Galaskiewicz, 1985). The very term 1. the central question addressed by early formula- tions of institutional theory was: Why and with ‘institutional’ was not established. Fligstein, what consequences do organizations use partic- for example, referred to ‘organiza- ular organizational arrangements that defy tradi- tional homogeneity theory’ (1985: 377). tional rational explanations? As we will show, Galaskiewicz (1985) wrote of the literature this question was initially interpreted somewhat ‘on legitimation’. Only Scott (1981) and 9781412931236-Intro 5/19/08 4:24 PM Page 8

8 THE SAGE HANDBOOK OF ORGANIZATIONAL INSTITUTIONALISM

Pfeffer (1982) were sufficiently prescient to (means of transmission) explored how ideas seriously acknowledge the institutional are transmitted across organizations. perspective. Outside of North America, Meyer and Processual studies Rowan’s ideas caught the interest of Swedish The most systematic and nuanced approach to scholars who showed especial interest in the the institutional literature was initiated by notion of decoupling (e.g. Brunsson, 1985, Tolbert & Zucker (1983) who looked at the 1989). Public sector reforms were observed diffusion of civil service employment prac- to be primarily rhetorical in form and the tices across US local governments over an goal of ‘modernization’ was found to have extended period. Adoption reflected incorpo- little effect upon operational practices. These ration of practices ‘modelled after the business empirical observations confirmed the Meyer corporation, where personnel selection and Rowan thesis of decoupling. But and promotion were presumably based on Scandinavian researchers also recognized merit …’ (Tolbert & Zucker, 1983: 25). that organizations confront and handle multi- A point worth emphasizing is that Tolbert and ple and contradictory institutions and expec- Zucker explicitly identified the ‘rationalized tations. Brunsson (1989), in particular, myth’ Ð business efficiency via hiring based theorized on ‘organizational hypocrisy’ on expertise Ð to which municipalities were whereby organizations ‘talk’ in one way yet responding. The logic of Tolbert and Zucker’s act in another in order to cope with contra- study is that diffusion involves two stages, dictory contextual pressures. Scandinavian each defined by the motivation for adoption. research also discerned what would later Early adopters of an idea are motivated to be referred to as the ‘translation’ process improve operations, ‘for example, by stream- (see Boxenbaum & Johnsson, Chapter 2; lining procedures or reducing conflict’ Czarniawska, Chapter 32; and Sahlin & (Tolbert & Zucker, 1983: 26), whereas later Wedlin, Chapter 8 this volume). Despite these adopters are motivated to secure social legiti- emerging themes, the impact of Scandinavian macy by appearing ‘modern, efficient and research upon North American thinking was rational’ even though the procedures were not initially rather slight. especially functional. Tolbert and Zucker Gradually, the institutional thesis received interpret the second stage of diffusion to fuller treatment and was ‘confronted with mean that, as increasing numbers of organiza- data’ (Scott, 2004: 464). But very quickly, tions adopt an innovation, the innovation itself studies claiming to be within the institutional becomes ‘progressively institutionalized, or perspective showed a diversity of approaches widely understood to be a necessary compo- and a rather casual use of the term institu- nent of rationalized organizational structure. tional. We begin, however, with four sets of The legitimacy of the procedures themselves studies that clearly reflected the idea of insti- serves as the impetus for the later adopters’ tutions as rationalized myths. The first set (1983: 35). An important insight, here, is that (which we label processual) demonstrated it is the justification underlying adoption that that organizations are motivated to achieve signals whether an institutional effect is being legitimacy by adopting practices widely observed. (Tolbert & Zucker did not actually believed to be rational. The second (cross- measure whether late adopters were moti- category) examined the proposition that vated by legitimacy concerns, or whether they institutionalized organizations converge secured it. They concluded that, because the around practices assumed to be rational. functional imperatives that explained early The third (cross-national) compared prac- adoptions did not explain later adoptions, tices in different countries, testing whether institutional processes must have been at distinct cultural values result in different work. This is treating institutional theory as organizational behaviours. The fourth the default option). 9781412931236-Intro 5/19/08 4:24 PM Page 9

INTRODUCTION 9

The Tolbert and Zucker study was pivotal, (legitimated) ideas (myths) within an organi- for three reasons. It was the first large-scale, zational field are associated with adoption of quantitative, historical analysis of institu- particular organizational strategies and struc- tional effects. It focused upon cognitive tures. Third, Fligstein is not addressing the forms of legitimacy. And it set in train a Weberian question of why society is becom- series of studies seeking to confirm the two- ing increasingly rationalized. Fligstein dis- stage model of diffusion. This model was connected the study of institutional processes largely but by no means always found in from the study of rationalization. Thereafter, other studies, but is often treated as one of the study of institutional processes was free the basic insights of institutional theory. to examine any aspect of organizational Zilber (Chapter 5 this volume), however, form. Finally, Fligstein offers an alternative raises the important caution that, by focusing to the two-stage model of change, showing upon the diffusion of structures rather than how disruptive changes in legal frameworks upon underlying motivations, there is a enable shifts in organizational behaviours by high risk that erroneous conclusions will altering patterns of incentives and opportuni- be drawn. ties (see also Baron et al., 1986; Edelman, A second diffusion study with a historical 1990, 1992). This model of change, the perspective9 was conducted by Fligstein exogenous-shock model, became the domi- (1987). Fligstein showed that the back- nant portrayal for the next two decades grounds of those holding top positions in (see below). large corporations changed over the course of 60 years. From 1919 to 1939, manufacturing Cross-category comparisons personnel dominated but thereafter were A series of studies, mostly from researchers increasingly displaced, first by sales and from Stanford University (Pfeffer & Cohen, marketing personnel and from 1959 onwards 1984; Tolbert, 1985; Baron & Bielby, 1986; by finance personnel. Manufacturing person- Fennell & Alexander, 1987; Pfeffer & Davis- nel dominated initially because firms were Blake, 1987; Eisenhardt, 1988) examined largely non-diversified. But the emergence of Meyer and Rowan’s (1977) idea that govern- the multidivisional form led to the rise of the ment and non-profit organizations were more sales and marketing function because that likely than commercial organizations to use function was believed to have the appropriate employment practices presumed (by the skill set for the new strategy. Then, anti-trust researchers) to be exemplary practices. By legislation, which curtailed opportunities for and large, these studies supported the idea vertical and horizontal diversification, pro- that not-for-profit organizations are espe- vided the conditions for unrelated diversifi- cially sensitive to institutional influences. cation to emerge as the dominant strategy A different observation was made by Baron, and the ascendance of finance officers. Jennings and Dobbin (1988), who tracked Fligstein’s analysis is thus a broad one, but it the diffusion of modern personnel from man- contains a mimetic explanation of diffusion: ufacturing industries to service industries ‘once new actors established themselves in (i.e. from a setting low in institutional sensi- one set of firms, their counterparts in other tivity to one with high institutional sensitiv- firms were able to use that fact as a basis of ity). Baron et al. explained their findings by gaining power’ (1985: 56). saying that once practices were extensively Three features of Fligstein’s study deserve used in manufacturing they became the stan- recognition. First, he links control of the dard of good practice. Another extension of organization to intra-organizational power cross-category research was provided by struggles. Second, he never uses the terms Sheets and Ting (1988) who showed that dif- ‘rationalized myths’ or ‘legitimacy’, but fusion even within a category of institution- his study traces how generally accepted alized organizations is dependent not only 9781412931236-Intro 5/19/08 4:24 PM Page 10

10 THE SAGE HANDBOOK OF ORGANIZATIONAL INSTITUTIONALISM

upon the need for legitimacy, but upon appropriate structures. Yet, in some ways, whether organizations are within networks this explanation is the closest to the ideas of that ‘transmit normatively expected employ- Meyer and Rowan. ment practices’ (610). These cross-category studies were discontinued by the end of the Other themes decade. Other themes were explored but to a lesser extent. Pfeffer and Davis-Blake (1987), in a Cross-national comparisons rare study of consequences, examined how A third approach hypothesized that social stereotypes of ‘women’s work’ and its worth values in different countries (especially those results in patterns of compensation that that are relatively cohesive and isolated, such disadvantage women. Torres (1988) showed as Japan), would use different organizational how professions shape regulatory structures practices (for a review, see Lincoln & so as to preclude organizational forms McBride, 1987). This approach directly chal- inconsistent with their interests. Imershein lenged the structural-contingency assump- and Rond (1989), in a strangely neglected tion of culture-free ‘laws’ of organizations. paper, traced how competing societal values Ð Lincoln et al. (1981) compared the attitudes ‘altruism’ and ‘efficiency’ Ð precipitated of Japanese and US workers in 28 Japanese- struggles between interest groups who owned organizations located in the United promote different organizational forms States. They found that the two groups of and how state regulators resolved these employees preferred different organizational disputes. arrangements. Organizations with ‘inappro- Not all studies were entirely supportive of priate’ structures, i.e. that did not reflect the institutional argument (see for example, employee preferences, experienced employee Pfeffer & Cohen, 1984; DiPrete, 1987; Finlay, dissatisfaction. Lincoln et al.’s study was the 1987; Oliver, 1988). But most were. Moreover, first in a series of studies through the 1980s evidence was collected from an array of prac- that analyzed the effects of national culture tices, including personnel procedures (Tolbert (e.g. Birnbaum & Wong, 1985; Lincoln et al., & Zucker, 1983), boundary-spanning strate- 1986; Carroll et al., 1988; Hamilton & gies (Fennell & Alexander, 1987), corporate Biggart, 1988). Evidence of cultural (institu- committee structures (Harrison, 1987) and tional) effects was usually found, but see accounting practices (Covaleski et al., 1986). Birnbaum and Wong (1985). Furthermore, evidence was taken from a range of settings, including universities (Pfeffer & Means of transmission Davis-Blake [add 1987]), hospitals (Fennell Showing the spread of practices per se does & Alexander, 1987), school districts (Strang, not explain how institutional influences pen- 1987), publicly traded corporations (Baron etrate organizations, a question that began to et al., 1986), municipalities (Tolbert & be addressed late in the 1980s (and even Zucker, 1983), the long-shore industry more in the 1990s). Several means or agents (Finlay, 1987), Hungarian agricultural co- of diffusion were observed, including operatives (Carroll et al., 1988), US federal professional networks (Baron et al., 1986; bureaucracies (DiPrete, 1987), social welfare Sheets & Ting, 1988), government agencies agencies (Oliver, 1988), and even the funeral (Baron et al., 1986), management consultants industry (Torres, 1988). The sheer range and (Ghoshal, 1988) and senior executives diversity of practices and settings was (Harrison, 1987). Each of these means of dif- impressive, leading Zucker (1987: 443) to fusion would be extensively examined in the comment that: ‘institutional theories have 1990s. But one thesis not picked up was spread rapidly, a testimony to the power of Lincoln et al.’s (1981) idea that structures are the imaginative ideas developed in theoreti- adopted because of employee expectations of cal and empirical work’. 9781412931236-Intro 5/19/08 4:24 PM Page 11

INTRODUCTION 11

One reason for the expanding scope and organizations respond in similar fashion to diversity of institutional ideas was their suc- institutional processes. Given this finding, cessful juxtaposition with other theoretical Fombrun (1989: 439) rightly asked: ‘If perspectives. Initially, institutional accounts isomorphism obtains, how then are we were largely contrasted with structural- to explain the apparent variety of organiza- contingency theory because of that theory’s tions that nonetheless co-exist within indus- assumption of efficiency as the key dynamic tries …?’ This question, we believe, points to driving organizational behaviour. But, later, the confusion raised earlier over the idea of institutional approaches were linked, often in isomorphism. As initially proposed, isomor- a complementary way10 to resource depend- phism refers to the relationship between an ence and population ecology (for a review of organization and its institutional context. the 1980s, see Singh & Lumsden, 1990). Not But, isomorphism was (and still is, unfortu- all observers were impressed by these nately) often taken to mean that all organiza- theoretical overlaps (Zucker, 1989, 1991, tions will respond in the same way. Yet, pp. 104Ð5). Nevertheless, insights achieved organizations confront institutional contexts by combining institutional and ecological containing multiple and inconsistent myths analysis (see Haveman & David, Chapter 24 that allow for multiple yet equally legitimate this volume) and resource dependence theory responses (a feature explicitly recognized by continue to be productive. Meyer & Rowan, 1977: 356 and by Scott, 1983: 161). By the late 1980s, increasing references were being made to the ‘substan- Taking stock: 1987–91 tial discord’ within institutional environ- ments rather than the ‘effortless evolution of By the end of the 1980s, ambiguities in the common sense understandings’ implicit in institutional story were becoming apparent, earlier work (DiMaggio, 1991: 268; see also as were issues that were not receiving ade- Imershein & Rond, 1989; Baxter & Lambert, quate attention (Perrow, 1986; Neilson & 1990). Further, it was recognized that Rao, 1987; Scott, 1987; Zucker, 1987, 1988; ‘institutionalized myths differ in [their] DiMaggio, 1988; Fligstein & Dauber, 1989; completeness’ (Meyer & Rowan, 1977: 354), Oliver, 1991; Powell & DiMaggio, 1991). providing scope for strategic choice in how One concern was that the majority of studies they are interpreted (Scott, 1991). Finally, had been of the public sector and not-for- Fligstein (1985) had shown that complex profit organizations. Meyer and Rowan’s def- organizations constitute arenas of struggle inition of ‘institutionalized organizations’ as where groups compete for power and selec- those with weak market forces had naturally tively appeal to institutional pressures to turned attention to governmental and not-for- legitimate their claims. For all these reasons, profit organizations. Towards the end of the the idea that organizations would become decade, however, this overly narrow under- aligned with their institutional contexts in the standing of where institutional processes same way became less acceptable. would occur was being discarded as scholars Even if the institutional context is very recognized that ‘markets’ were institutions. clear and uniform in its demands, it is not We pointed out above that the first authors to clear that diffusion of any practice per se sig- make this point were Carroll et al. (1986) but nifies an institutional effect. If a firm believes Zucker (1987) and Powell (1991) strength- another to have superior knowledge and to ened the call for examination of all types of have acted rationally, copying that firm is organizations.11 an act of vicarious learning, and, arguably, A second ambiguity surrounded the a purposely ‘rational’ decision. In contrast, if concept of isomorphism. We noted earlier a firm adopts an innovation because it that several studies reported that not all believes that doing so provides legitimacy, 9781412931236-Intro 5/19/08 4:24 PM Page 12

12 THE SAGE HANDBOOK OF ORGANIZATIONAL INSTITUTIONALISM

that behaviour is an institutional effect. hiring of expert staff, and use of personnel (Several leading researchers Ð see Haveman practices of a bureaucratic form. (Here we & David, Chapter 24 this volume, for see, again, the academic interest in rationali- example Ð view legitimacy as a defining zation). After the War, personnel practitioners element of institutional explanations). shifted their focus and claimed (successfully) Convergence around a similar set of prac- that they had expertise relevant to the tices, in other words, could signal competi- immediate post-War problems of labour- tive or institutional isomorphism12 (see management relations such as productiv- Haunschild & Chandler, Chapter 26 this ity measurement. Moreover, personnel volume, for an elaboration of this argument). officers mobilized themselves and began But few diffusion studies conducted in the their professionalization ‘project’ (Abbott, 1980s made this distinction (neither did those 1988). conducted in the following decade). Instead, Baron et al.’s paper is a rich story of insti- ‘institutionalization’ became associated with tutional processes, embracing mimetic, coer- diffusion irrespective of the (unexamined) cive and normative mechanisms. But we motivations for adoption. Moreover, it was wish to highlight that it uses ‘institution’ in assumed (wrongly) that a lack of conver- two ways. On the one hand, institutions are gence indicates the absence of institutional ‘models’ that become cultural prescriptions. processes. As such, institution is being used in the same A third ambiguity concerned the nature of way as it was by Meyer and Rowan (1977). an institutional explanation. We illustrate this On the other hand, institutions are the regula- ambiguity by summarizing an excellent tory agencies of the political economy. In this paper (Baron et al., 1986) that used ‘institu- second usage the institutional context is not tional’ in a rather different way to that put one of ideas and symbols but of agencies and forward by the core foundational papers. policies. By the end of the 1980s, Baron Baron et al. set out to ‘sketch an institutional et al. thus illustrate how the term institution explanation’ (1986: 352) of the spread of had acquired two meanings: as rationalized modern personnel administration in the US myths within a cultural context; and as a during and after World War II. The explana- framework of (primarily State) regulatory tion provided is that new personnel methods agencies and policies. The former is the were adopted when ‘certain institutional pres- focus of Meyer and Rowan (1977). The latter sures’ favoured adoption. What were these would become the focus of the confusingly ‘institutional pressures’? During World War termed ‘new institutionalism’ (see, for exam- II, there was increased federal intervention in ple, Ingram & Inman, 1996; Ingram & Clay, labour markets, especially through the War 2000; Ingram & Silverman, 2002). But, this Production Board and the War Labour Board. latter form of ‘institutional explanation’ need These agencies sought to stabilize employ- not (and in some later studies, did not) ment and reduce turnover in industries criti- explicitly embrace socio-cultural elements. cal to the War effort by encouraging firms to Instead, institutions would be defined, adopt particular employment practices. simply, as the regulatory framework. The dif- Moreover, the War Manpower Commission ficulty with this usage is that it fails to placed responsibilities upon firms for provid- separate an institutional from a resource- ing data on their manpower needs, which led dependence perspective. For us, inclusion of to increased use of job analysis and job eval- regulatory frameworks as ‘institutions’ is uation. In effect, federal agencies were pro- appropriate only if it is made clear that those viding ‘models for personnel management’ institutions embody taken-for-granted socie- (1986: 371) underwritten by ‘strong incen- tal norms and values, and if these values are tives’ (1986: 373). These models included the explicitly identified. This distinction between creation of personnel departments and the institutions as cultural prescriptions, and 9781412931236-Intro 5/19/08 4:24 PM Page 13

INTRODUCTION 13

institutions as regulatory frameworks, would ‘strategic’, depending on various contingen- recur over the next decade and beyond. cies in the organization and its environment. A fourth ambiguity concerned the basic Oliver’s analysis identified possible strategic questions that institutional theory seeks to responses and the likely antecedents of their answer. The foundational papers ask why adoption. there is an increasing rationalization of soci- Paradoxically, others believed that much ety and use of bureaucratic organizational institutional work held an oversimplified forms. But organization theorists are (more?) approach to agency. Neilson and Rao (1987) interested in institutionalized patterns of criticized existing work for: ‘treating legiti- behaviour, irrespective of whether those macy as something to be managed in a func- practices are indicators of rationalization. We tional sense by dominant coalitions. This referred earlier to Fligstein’s (1985) tracking creates the serious risk of oversimplifying of the use of the multidivisional form, which legitimacy into a matter of marketing and is an interesting question to organization the- effective presentation rather than approach- orists. But it is not an application of the ing it as a complex process of socially con- Weberian question of increasing rationaliza- structing reality’ (1987: 525).13 (This tion. The multidivisional form (M-form) is observation, curiously, is particularly appro- no more an indicator of rationalization than priate today.) A key difference between these is, say, the functional form that the M-form different standpoints is that Neilson and Rao displaced, or the network form that followed. were criticizing images of agency carried out This turning away from Weber’s (and Meyer within an existing institutional setting, & Rowan’s and DiMaggio & Powell’s) focus whereas DiMaggio was interested in how upon rationalization would be increasingly that setting might be changed. For us, both characteristic in the 1990s and would criticisms had merit. Nevertheless, it was serve to expand the scope of institutional widely assumed at the beginning of the applications. 1990s that institutional theory did not take sufficient account of how actors (i.e. organi- New directions? zations) were able to work on their institu- DiMaggio (1988) complained that institu- tional context in order to promote their tional work risked being marginalized unless interests. This imagery, however, increas- it could incorporate ‘the reality of purposive, ingly sees institutional contexts as ‘out interest-driven, and conflictual behaviour’ there’, as constraints on an organization, (1988: 5). Organizations, he rightly com- rather than as something with which the plained, were portrayed as caught within the organization interacts and thus constructs. constraints of institutionalized norms. Another proposed new direction, put for- Consequently, institutional theory could not ward by Powell (1991), concerned the conse- explain fundamental change. To progress, quences of institutional behaviour. A core DiMaggio argued, institutional theory would assumption of the institutional story is that if have to incorporate an account of agency and organizations conform to institutionalized address a series of critical questions: How are norms, they gain legitimacy and improve new organizational forms created and legiti- their survival prospects. But few studies in mated? Who has the power to legitimate a the 1980s, other than those adopting the eco- novel form? Who are the ‘institutional entre- logical perspective, examined whether con- preneurs’? How are ‘core institutions’ dele- formity did generate legitimacy, and, if so, gitimized? Building on DiMaggio (1988), with whom; nor did they examine whether Oliver (1991) incorporated resource-depend- legitimacy led to organizational survival. ence theory and suggested that organiza- One exception was Singh et al. (1986), who tional responses to their institutional observed that endorsement by external agen- environment may be proactive or even cies (an indicator of legitimacy) reduced the 9781412931236-Intro 5/19/08 4:24 PM Page 14

14 THE SAGE HANDBOOK OF ORGANIZATIONAL INSTITUTIONALISM

liabilities of newness of social service organ- institutional perspective. For example, izations. Little attention was also given to the Richard Daft’s best-selling organization broader political consequences of institu- theory textbook referred to institutional tional structures, even though, as we noted theory for the first time in the sixth edition, earlier, the connection between institutional published in 1997. Admittedly, most text- processes and elite interests was raised in books referred to institutional theory more as several of the original formulations. This gap an interesting aside than as a core construct, in research (exceptions included Baron et al., but by the middle of the decade the perspec- 1986; Imershein & Rond, 1989; Baxter & tive was firmly established as one of the cen- Lambert, 1990) prompted DiMaggio and tral approaches of organization theory (see Powell (1991: 30) to lament that ‘power and for example, Aldrich, 1999). Moreover, in interests have been slighted topics in institu- terms of research, the 1990s was a theoreti- tional analysis’. cally rich period with an expanding agenda There was, however, growing awareness of applications and greater systematization towards the end of the 1980s that organizations of ideas. Initially, there was a focus on show- are not unitary entities and that their responses ing isomorphism and its dynamics. But, by to institutional processes may be less homoge- the middle of the decade, attention had turned neous and less automatic than originally envis- to the examination of legitimacy, typically aged (e.g. Fligstein, 1985, 1987; Hinings & accompanied by a more agentic approach. Greenwood, 1988). Looking back, Powell A further line of research examined institu- commented that: ‘… much of the imagery of tional change, again often with an agentic institutional theory portrays organizations too approach (as indicated by adoption of ‘insti- passively and depicts environments as overly tutional entrepreneurship’ as a central organ- constraining. There is a wide range of institu- izing term). Finally, there was a renewed tional influences, and internal responses to interest in the notion of ‘institutional logics’, these pressures are more varied than is sug- which represented a welcome return to the gested by our initial arguments.’ (1991: 194; importance of cultural symbols. In other see also, DiMaggio, 1991). words, several of the challenges raised at the In summary, as the decade turned institu- end of the 1980s were being addressed, but, tional theory was clearly established within as we shall see, not all of them. organization theory as a productive lens Before reviewing these research themes, it through which to understand organization- is worth noting that the concept of institution context interactions. But if the promise of continued to be troublesome and used in sev- institutional theory was to be realized there eral different ways. As before, some was a need to show the underlying motiva- researchers referred to cultural models, tions of institutional effects (rather than treat others to the State or its policies, some them as the default option), to pay greater simply avoided the term and pointed instead attention to (and explain) the variability of to presumed institutional effects (e.g. responses to conflicting institutional pres- mimetic behaviour). Godard (1999: 683), sures, to incorporate more agentic and politi- rather politely, thought the theory had cal dimensions, and to explicitly look at how become ‘increasingly amorphous’. Davis institutions arise, change and with what con- et al. (1994: 550), in similarly diplomatic sequences. Did this happen? tones, found the meaning of institution ‘somewhat unclear’. Scott’s (1995: xiv) mas- terful review noted that ‘institution’ had Expanding horizons: 1991–2007 acquired new meanings ‘much like barnacles on a ship’s hull’. For most theorists, however, Most textbooks that appeared after 1991 would the problem was put aside. Much like the early include some (albeit limited) discussion of the days of organization theory, when a tacit 9781412931236-Intro 5/19/08 4:24 PM Page 15

INTRODUCTION 15

agreement occurred to stop attempting to on instrumental grounds’ (Davis et al. 1994: define ‘organization’, there emerged an 551). This latter condition, however, is rarely unwritten assumption that we intuitively insisted upon in empirical work (although, know what we mean by institution and thus see Brunsson, 2006). Instead, institutional- have no further need to define it. ization has become accepted as the process Scott (1995) brought order to the various whereby things become institutionalized, strands of institutional analysis by distin- which, in turn, simply means that things are guishing between the regulative, normative more or less taken for granted.14 and cultural-cognitive ‘pillars’ or elements that underpin institutions. Analytically, these Institutional isomorphism are separate elements and have been selec- Studies of isomorphism were salient in the tively emphasized by different theorists. One early to mid 1990s and elaborated upon consequence has been the crystallization of the processual and transmission studies of the two nascent approaches of the 1980s the previous decade. The two-stage model (institutions as cultural models, institutions was examined, with mixed results. Despite as regulatory frameworks), and, worryingly, this inconsistent support, the model began to an increasing disconnect between them. In be treated as having ‘canonical status’ practice, as Scott later acknowledged, the (Schneiberg & Lounsbury, Chapter 27 this three pillars are often found together but the volume). However, research in the 1990s cultural-cognitive pillar provides ‘the deeper increasingly recognized that institutional foundations of institutional forms … the infra- contexts were complex, often consisting of structure on which not only beliefs, but norms competing institutional demands (see and rules rest’ (Scott, 2004: 5). For this reason, Boxenbaum & Jonsson, Chapter 2; Hasse & Phillips and Malhotra (Chapter 29 this Krücken, Chapter 22; and Kraatz & Block, volume) would prefer that researchers focus Chapter 9 this volume). There was thus exclusively upon the cultural-cognitive, growing interest in why and how organiza- which they declare as the distinctive insight tions interpret and respond differently to of organizational institutionalism. Scott, their contexts. however, urges researchers to specify which Three approaches developed to explain pillars are operant in which settings, how why organizations in general are more or less they unfold, and with what effects. Few receptive to institutional pressures. The dom- researchers, however, have satisfactorily inant approach was structural and examined operationalized the three pillars (Mizruchi & how institutional prescriptions are mediated Fein, 1999) and in some instances (e.g. by an organization’s position in a social (net- Kostova & Roth, 2002) they are deliberately work) structure, with position defined by the blended to form a composite ‘institutional degree of centrality, status, or simply by ties profile’. Nevertheless, Scott’s pillars have to other organizations. Where you are, in this become one of the most-cited contributions approach, determines what you do. Interest in the institutional literature. was shown in which organizations serve as The notion of ‘institutionalized’ was less models for others to copy, and in the means troublesome, typically interpreted to mean by which information and/or expectations are something that is widely used and more or transmitted. Board interlocks, ‘perhaps the less taken-for-granted. Davis et al. (1994), most-studied social structure in organization following Zucker (1977), offered a useful but theory’ (Davis & Greve, 1997: 12), were tough definition, proposing that a practice or extensively examined. (A smaller number of belief is institutionalized if it is widely studies examined the role of spatial proxim- accepted without recourse to analysis as the ity but recognition of the role of geographic best way of meeting technical requirements, communities became rather lost and has only and, ‘is able to withstand challenges based recently resurfaced). 9781412931236-Intro 5/19/08 4:24 PM Page 16

16 THE SAGE HANDBOOK OF ORGANIZATIONAL INSTITUTIONALISM

An intriguing twist was provided by approaches. R. Meyer (Chapter 21, this Westphal and Zajac (2001) who observed that volume) adds that US dominated institutional network ties are not only conveyers of institu- theory lost contact with some of its European tional pressures but conduits for knowledge theoretical ‘forefathers’. of how to avoid them. Another interesting A second approach to understanding orga- study (Davis & Greve, 1997) compared the nizational responses to institutional pres- diffusion of two practices Ð the poison pill, sures looked at intraorganizational factors. and golden parachutes for CEOs Ð and found Greenwood and Hinings (1993) emphasized that, although both practices diffused, they that organizations are coalitions of diverse did so in very different ways. One diffused professional interests that contest which of rapidly, the other more slowly. One diffused several institutional models (archetypes) in linear form, the other in the classic S-curve. should be adopted. Han (1994) identified the Further, the dynamics driving diffusion were importance of status, observing that high and also different. This study, in other words, low status firms are less likely than interme- highlighted the complexities of diffusion diate status firms to engage in mimetic (which were thrown into relief by the com- behaviour. Kossek et al. (1994) demonstrated parative method) and considered the social the effects of demographics and gender in processes whereby practices are actively jus- shaping organizational responses. Beck and tified to particular constituencies. Both stud- Walgenbach (2005) turned attention to more ies noted that organizations can act upon their traditional contingency variables, such as institutional contexts (see also Davis & organizational size (which increases the like- Anderson, Chapter 14 this volume). lihood of adoption) and technology (cus- Although we are including the diffusion tomization decreases adoption). These and studies of the early and mid 1990s as part of similar studies confirmed that organizations the institutional story, these studies would are unlikely to respond uniformly to institu- often combine institutional with organiza- tional processes, although the ‘choice-set’ tional learning theory or network theory Ð (Greenwood & Hinings, 2006) of options is Young, Charns & Shortell (2001) actually institutionally defined. referred to the ‘network/institutional per- Towards the end of the 1990s, a third spective’ Ð and it was not always clear approach, as yet not fully developed, turned whether the authors’ focal interest was diffu- attention to notions of organizational iden- sion or isomorphism. Few studies, moreover, tity. How organizations respond to their con- went beyond rates of adoption as indicative texts is affected by how far institutional of whether practices had become established pressures are consistent with the history and and taken-for-granted, even though, as Rao broader norms that define an organization to et al. point out, ‘adoption is sometimes fol- its members (Elsbach & Kramer, 1996; Fox- lowed by regret and abandonment’ (2001: Wolfgramm et al., 1998; Labianca et al., 503). Nevertheless, the diffusion of pre- 2001; Kostova & Roth, 2002). The relation- sumed institutional effects began to be ship between institutional processes and treated as evidence of institutional processes, organizational identity is complex and recip- even though the motivation and meanings rocal (see Glynn, Chapter 16 this volume) underlying adoption were not established, with institutionalized social categories and and even though it was rarely established that symbols providing the materials from which adoption was permanent (‘internalized’, to a claimed identity is constructed (who we use Kostova & Roth’s term, 2002). Zilber are is defined by whom we profess to be (Chapter 5, this volume) attributes the neg- like) and by which identity is displayed. lect of meaning and process to the preference Organizational identity, in other words, for quantitative, macro-level methodologies mediates how organizations interpret and rather than more interpretive, qualitative respond to institutional expectations.15 9781412931236-Intro 5/19/08 4:24 PM Page 17

INTRODUCTION 17

Implicit in the above three approaches, to mid 1990s (e.g. Scott, 1995; Christensen, a greater or lesser degree, was the idea that Karnoe, Pedersen & Dobbin, 1997; Hirsch & institutional models or prescriptions are ‘out Lounsbury, 1997; Stinchcombe, 1997), was there’. This assumption is clearest in the being answered. Research in the 1990s had structural approach to diffusion, which basi- turned decidedly agentic and remained so, cally tested whether a particular structural perhaps too much so, into the 2000s.17 form or technique was adopted or not. A very different imagery, referred to earlier, is pro- Legitimacy vided by the Scandinavian school, which If the motivating question of the 1980s had emphasizes the diffusion of ideas through a been ‘Why is there such startling homogene- process of ‘translation’ (see Czarniawska, ity of organizational forms and practices?’ Chapter 32 and Sahlin & Wedlin, Chapter 8 (DiMaggio & Powell, 1983: 147), one of the this volume). Instead of treating institution- two motivating questions from the mid 1990s ally prescribed structures and practices as became ‘How do organizations acquire, ‘out there’ and as adopted more or less ‘as manage and use legitimacy?’ (the second is’, translation assumes that ideas and prac- was, How do institutional arrangements tices are interpreted and reformulated during change? Ð see below). We attribute this shift the process of adoption. Several studies in in attention, at least partly, to the growing this tradition focused on the interplay of acceptance that neither institutional contexts translated ideas and transformed organiza- nor organizations are homogeneous. But it tional identities (Sahlin-Andersson, 1996; may also have been a response to the ampli- Sevón, 1996; Hedmo et al., 2006; Wedlin, fied appeal for inclusion of interests and 2006). Inevitably, translation implies deliber- agency. For example, one approach drew ate and accidental or unintended transforma- upon impression management theory to show tions of ideas as they transfer from one how organizations acquired and sustained setting to another, and the potential for con- social approval (e.g. Elsbach & Sutton, 1992; tinuous adjustment and change, much as Elsbach, 1994; Arndt & Bigelow, 2000). anticipated in Giddens’ notion of structura- A rather different and interesting example of tion. The Scandinavian approach was thus agentic behaviour is Westphal and Zajac’s more faithful to the social constructionist (2001) study of why some organizations that principles of institutional thought. Early announce stock repurchase plans (announce- Scandinavian contributions had been rela- ments favourably received by investors) fail tively ignored, but pivotal statements by to implement them (with the result that CEOs Czarniawska and Sevón (1996) and Sahlin- retain discretion over the allocation of corpo- Andersson (1996) generated increased atten- rate resources). According to Westphal and tion in North America.16 These works Zajac, the decoupling of announcements observed that imitators are often motivated to from implementation was especially likely in become similar to other organizations and corporations with powerful CEOs. In other yet seek to distinguish themselves. words, ‘powerful actors mediate institutional Studies of diffusion and translation clearly effects’ (2001: 207; see also Zajac & allowed for agentic action. Organizations Westphal, 2004). Again, we see the recogni- were no longer presented as conforming to tion of agency and the role of interests in how institutional demands, but as making sense of organizations respond to institutional pres- them, adapting them, enacting them, and sures. (More recently, we see ‘embedded working upon them (e.g, Glynn, Chapter 16 agency’ featured as a core characteristic of this volume). This is a very different image to institutional logics Ð see Thornton & Ocasio, that conveyed at the beginning of the decade, Chapter 3 this volume.) indicating that DiMaggio’s call for inclusion Renewed interest in legitimacy went hand of agency and interest, a call amplified in the in hand with two developments. First, there 9781412931236-Intro 5/19/08 4:24 PM Page 18

18 THE SAGE HANDBOOK OF ORGANIZATIONAL INSTITUTIONALISM

were attempts to give greater precision to Only a minority of studies during this what the term means. Suchman’s (1995) period explicitly examined whether conform- classic statement distinguished between ity to cultural prescriptions delivered social pragmatic, moral, and cognitive legitimacy, legitimacy and/or improved organizational and identified the various audiences who survival chances and/or affected performance confer it. Aldrich and Fiol (1994) separated in other ways. Early in the 1990s, studies that sociopolitical from cognitive legitimacy. examined the consequences of conformity Ruef and Scott (1998: 877) and Scott largely concluded that legitimacy did, et al. (2000) crystallized (and in our view indeed, follow conformity, but were less raised the standard of the research bar) by clear on whether performance was affected. declaring the need to specify much more Later, several studies connected legitimacy clearly which organizational elements are positively with performance (see Deephouse affected by institutional processes, which & Suchman, Chapter 1). Higgins and Gulati audiences confer legitimacy, and what form (2003), for example, provided an insightful of legitimacy is being conferred. Interestingly, account of how legitimacy affects the ability most studies that followed would point to of young firms to attract prestigious invest- external audiences, such as the media and ment banks as lead underwriters for initial professional associations; only a minority public offerings. Arthur (2003; see also noted the role of internal audiences (e.g. Deeds, Mang & Frandsen, 2004) showed that Staw & Epstein, 2000; Pollock & Rindova, legitimacy gained from adoption of work- 2003). The important point is that greater family human resource initiatives affected a specificity was being introduced (see company’s share price. Zimmerman and Deephouse & Suchman, Chapter 1 this Zeitz (2002) traced how legitimacy enabled volume). new ventures to grow by assisting their Interest in legitimacy also led to a call for acquisition of resources. In sharp contrast, better empirical measures. Zucker (1989) Kitchener’s (2002: 411) study of academic had questioned the use of density (the health centres in the US revealed that ‘uncrit- number of organizations with a particular ical adoption of managerial innovations can arrangement) and called for better proxies of prove to be more malignant than benign in cognitive legitimacy. In the mid 1990s, this their implications’ and Denrell (2003) pro- argument flared into a spirited debate vided a theoretical explanation for why between Baum and Powell (1995) and mimetic behaviour will result in poorer per- Hannan and Carroll (1995) with the former formance. A rather different take on the role advocating use of richer and multiple meas- of legitimacy was provided by Sherer and ures, such as certification contests, creden- Lee (2002), who note that high legitimacy tialing mechanisms, training programmes, enables organizations to deviate from estab- and so forth. Despite these attempts to obtain lished practices. Overall, these results greater conceptual precision and more credi- demonstrate the complexity of the relation- ble empirical indicators, Foreman and ship between legitimacy and performance. Whetten would later complain that ‘there is little agreement on how it (legitimacy) is Institutional entrepreneurship and change defined and/or measured’ (2002: 623). DiMaggio’s (1988) challenge that institu- Deephouse and Suchman (Chapter 1) reaf- tional theory should provide an account of firm this complaint, but also note, encourag- deinstitutionalization and institutional ingly, that efforts are being made to use change was met by a flurry of work. A piv- richer empirical indicators, such as media otal expression was the Special Issue of the statements, certification and licensing, Academy of Management Journal (Dacin, endorsements, and links to prestigious Goldstein & Scott, 2002). Later, institutional organizations. entrepreneurship emerged as a key term and 9781412931236-Intro 5/19/08 4:24 PM Page 19

INTRODUCTION 19

became almost synonymous with institu- analogies, i.e. existing cognitive frameworks tional change. In fact, from the later 1990s are used to make sense of ambiguous or the focus of institutional change was the con- novel events. Few studies have replicated struction and legitimation of new practices this theme. (see Hardy & Maguire, Chapter 7 this In contradiction to Leblebici et al.’s idea of volume). Such was the appeal of this pro- endogenously driven change, most North posed research agenda that understanding American19 studies followed the assumption institutional entrepreneurship became a cot- of the 1980s that institutional change is trig- tage industry from about 2000 and indicates, gered by an exogenous shock or ‘jolt’ again, the currently strong agentic emphasis (Meyer, 1982), whereby change happens as a within institutional work. Organizations consequence of external factors ‘smacking became treated as the independent rather into stable institutional arrangements and than the dependent variable in processes of creating indeterminancy’ (Clemens & Cook, institutional change. 1999: 447). The exogenous shock model An important early study of institutional retains the image of highly institutionalized change focused upon the organizational field. settings exhibiting stability and relative iner- Leblebici, Salancik, Copay and King (1991) tia over long periods. Gradually, however, took account of the variety of actors typically institutional fields came to be seen as more embraced within the definition of field conflicted and pregnant with suppressed (actors too often neglected in later studies interests (see Hasse & Krücken, Chapter 22, that claimed to be field-level analyses) and and Wooten & Hoffman, Chapter 4 this provided an insightful account of how inter- volume). And, as the 1990s ended, the exoge- actions between them evolved within the US nous model was revitalized by the inclusion radio broadcasting industry from its incep- of social movement theory (see Davis & tion in the early 1900s to the mid 1960s. The Anderson, Chapter 14; Schneiberg & paper explicitly addressed the conundrum of Lounsbury, Chapter 27; and Rao & Kenney, agency, asking how actors can reflect upon Chapter 13 this volume). Social movement and change institutionalized practices in theory not only provides a language for which they are embedded. Leblebici and his understanding how radically new ideas are colleagues provided four important contribu- framed and theorized in order to further their tions, three of which shaped the trajectory of acceptance, but assumes explicit contestation subsequent research. First, they explicitly between actors whose interests are disadvan- theorized at the level of the organization taged and repressed. All of these depictions field, which became the level for institutional contrasted sharply with the portrayals of the analysis (see Wooten & Hoffman, Chapter 4 1980s. Instead of institutional settings being this volume). Second, they argued that the seen as highly stable, permanent and charac- locus of change within a field is likely to be terized by conformity, they were now treated ‘fringe’ or peripheral actors because these as contested terrains contoured by variation, organizations are less embedded within, and struggles and relatively temporary truces (or less privileged by, existing institutional ‘settlements’, Rao & Kenney in Chapter 13). arrangements.18 Third, they emphasized the This new imagery raised the profile of power importance of ‘internal contradictions’ relations (see Lawrence, Chapter 6 and (Leblebici et al., 1991: 337) that emerge as R. Meyer, Chapter 21 this volume). fields develop, thus providing the starting One worry about the attention given to point for an endogenous explanation of political struggles is that the institutional change, an idea that remained largely ignored dimension sometimes recedes into the back- until it was revisited by Seo and Creed ground. A critical contribution of institu- (2002). Finally, Leblebici et al. (1991) tional analysis is its recognition that actors noted how new technologies invoke use of are not motivated solely by self-interest. 9781412931236-Intro 5/19/08 4:24 PM Page 20

20 THE SAGE HANDBOOK OF ORGANIZATIONAL INSTITUTIONALISM

Yet, at times, studies that analyze the strate- personnel professionals theorize responses in gies used by actors/entrepreneurs to achieve ways that persuade managers to see the poli- institutional change often ignore how and cies not as onerous ‘red-tape’, but as technical why institutional forces shape the strategies ways of improving efficiency (for example, accepted as appropriate and the choice of by securing a better fit between employee strategies made by particular actors. Unless skills and job requirements). Theorizing com- political processes are explicitly couched pliance in this way achieves two things. It within an institutional context, the resultant enhances the value and status of the personnel story becomes premised upon actors behav- profession (by reinforcing their interests); and, ing quasi-rationally and knowingly pursuing it links compliance to perceived efficiency, their interests. For us, this would be a politi- giving it the status of ‘rational’ behaviour. cal or resource dependence account, not an Through these processes, in other words, prac- institutional one. tices become rationalized myths. A very different and important approach to Four features of the above studies deserve institutional change followed the definition highlighting. First, they offer a rich account of institution as the apparatus and policies of of the dynamics of change. They show how the State (Edelman, 1990, 1992; Dobbin, legislation creates interests (e.g. the profes- 1992, 1993; Edelman, Abraham & Erlanger, sions, or new industries) which construct 1992; Dobbin, Sutton, Meyer & Scott, 1993; compliance behaviours. They show how pro- Edelman, Erlanger & Lande, 1993; Dobbin fessions use legislation to enhance their & Dowd, 1997, 2000; Edelman & Suchman, influence and scope of activity. They look at 1997; Edelman, Uggen & Erlanger, 1999). the role of power both within and between A sub-emphasis within this perspective was organizations and industries. Second, these the relationship between organizations and studies began to show that legislation is not the law. There is much to admire in these simply a structure of incentives and opportu- papers. One theme is that laws and regula- nities but a reflection of cognitive schema tions create and/or enhance interests. Dobbin that are historically contingent. As Edelman (1992), for example, showed how legislation and Suchman (1997: 482) put it, ‘organiza- encouraged development of the private insur- tions instrumentally invoke or evade the law’ ance industry. Edelman (1992) linked legisla- and ‘look to the law for normative and cog- tion on ‘due practice’ to the evolution of the nitive guidance, as they seek their place in a personnel profession. Once established, socially constructed cultural reality’. As these interests/agencies make it difficult to such, these studies began to combine the two reverse public policy (a point initially made definitions of institutions (i.e. institutions as by Baron et al., 1986). Another theme is that regulatory frameworks, and institutions as professionals interpret public policy and cultural models). Third, these studies dis- develop responses that, after legal testing in cussed how policies and practices become the courts, diffuse across the profession. In constructed as enhancing efficiency and thus this way, organizational responses converge as ‘rational’ behaviour, and thus eventually and become reproduced through professional taken-for-granted. Finally, these studies do networks and enforced by the mechanisms of not assume that new practices/models professional discipline. Interpretations of, already exist. Instead, they point to the recip- and responses to, public policy are in part rocal relationships involving professions, constituted by the implicit models embedded regulators and organizational managers in within the legal system (e.g. conceptions of constructing business models in response to fair treatment, due process, etc.). Such ambiguous legislation. As Scott (2004: 9) interpretations resonate with legal institu- notes, ‘this implies a transmutation over time tions such as the Courts, enhancing their of regulative into normative and cultural- acceptance and thus legitimation. Further, cognitive elements’. 9781412931236-Intro 5/19/08 4:24 PM Page 21

INTRODUCTION 21

Much of this work failed to become incor- Dobbin work, to draw upon institutions as porated into the majority of studies that have regulatory structures (although not coer- appeared in the organization and manage- cively enforced) and institutions as cultural ment journals. For example, of the 12 articles expressions. Second, much of the work on institutional change published in the points to transnational agencies as the source Special Issue on Institutional Change of the of soft laws and traces the diffusion of Academy of Management Journal (Dacin practices across societies.20 et al., 2002), only four refer to either Dobbin or Edelman and none provides a full account Institutional logics of how those authors combined regulatory The introduction of institutional logics into and cultural notions of institutions. Most contemporary institutional theory is com- work has continued to treat the regulatory monly attributed to Friedland and Alford institutional processes as synonymous with (1991), who were concerned to move institu- coercive processes arising from the power of tional thinking forward by incorporating an state agencies or from organizational hierar- explanation for institutional change. They chies, and thus has basically collapsed this proposed that modern capitalist societies component of institutional analysis into have ‘central institutions’ that have ‘poten- resource dependence theory, ignoring the tially incompatible’ institutional logics. It is more nuanced approach of Edelman. In the incompatibility of logics that provides the short, two discrete institutional communities dynamic for potential change. The picture is have developed, each drawing on different of actors recognizing opportunities for predecessor works and each being cited by change because of their location at the inter- different colleagues. stices of conflicting logics and instigating There is a risk of a third discrete commu- change by ‘appealing’ to these logics. nity. Scandinavian research over the last Thornton (2004) developed these ideas decade has focused not upon the role of the furthest and refined the list of central State, but upon the emergence of ‘soft’ regu- institutions. lations (e.g. Mörth, 2004; Djelic & Sahlin- Thornton and Ocasio (Chapter 3, this Andersson, 2006). For these theorists, the volume) caution that the term ‘institutional institutional change of interest is the dis- logic’ is in danger of becoming ‘a buzz placement of coercive, state-level regulations word’. Moreover, and as is usual in institu- by more voluntary regulations such as stan- tional work, definitions and usage vary. An dards (Brunsson & Jacobsson, 2000), rank- important distinction is between those, such ings (Wedlin, 2006), and accreditations as Thornton, who retain the idea that logics at (Hedmo, 2004). These softer regulatory the field level are nested within higher-order structures are developed and applied by non- societal institutional logics, and others (the governmental agencies (note, for example, majority) who identify logics within a field the influence of The Financial Times and of without referencing their societal patronage. accreditation bodies such as the AACSB Despite these differences, as the century upon business schools!) and elicit compli- turned, exploration of how institutional ance because they provide legitimacy (Djelic logics shape organizational behaviours and & Sahlin-Andersson, 2006). Two features of how those logics are historically dependent this work are worth noting. First, it repre- became a vibrant research theme. As sents another attempt to bridge the two defi- Thornton and Ocasio (Chapter 3 this volume) nitions of institution. Because of their point out, a clear implication of the logic voluntary nature, soft regulations only work construct is that there will be variation across in conjunction with relative cultural homo- sectors, fields and historical periods, contrary geneity. There is, therefore, in this work, the to the later ideas of Meyer (e.g. see Drori, same attempt observed in the Edelman and Chapter 18 this volume). 9781412931236-Intro 5/19/08 4:24 PM Page 22

22 THE SAGE HANDBOOK OF ORGANIZATIONAL INSTITUTIONALISM

TAKING STOCK political actors, operate upon their environ- ments for either instrumental or social gain. Tracing the historical developments of insti- In the third period (1991 to the present), tutional theory from 1977 to the present, we we have argued that the most conspicu- have sought to reflect on the most prominent ous theoretical developments surrounded themes and constructs that continue to define institutional isomorphism (as a more the distinctive substance of the theory’s con- complex phenomenon inclusive of network-, tribution. To that end, we analyzed three time intra-organizational-, identity- and transla- periods. The foundations period, from 1977 tion-based responses to institutional pres- to 1983, laid the substratum of important sures); legitimacy as agency (together with constructs Ð institution, institutional context, clarification of the construct by Suchman, institutionalization, and isomorphism Ð upon 1995); institutional entrepreneurship and which the initial articulations of the theory change (embracing the characterization of were built. Where construct definition was organizations and their fields as conflicting, lacking in the literature during this period, contested, or legally constituted terrain); and we have offered our own. Five basic elements institutional logics. Furthermore, empirical of institutional theory during this period were work had broadened to include a wider range summarized, together with our interpretation of industries and practices (although hospi- of the overall questions and potential tals were a favoured site!). By the end of the answers which institutional theory examined period, much of the theoretical story had and, importantly, continues to examine, been confirmed by the detailing of previ- thereby giving coherence and continuity to a ously inferred steps (e.g. by showing how perspective which has otherwise proliferated ideas move between organizations and which in multiple directions across diverse empiri- organizations serve as models). The com- cal settings and topics. plexity of institutional effects had been rec- The second time period, 1983 to 1991, ognized (e.g. that not all organizations revealed the development of four areas of succumb easily to institutional processes, study Ð processual, cross-category, cross- that the dynamics and pacing of diffusion can national, and means of transmission Ð vary by type of innovation, that the dynamics encompassing, respectively, diffusion, com- of adoption are different to those of abandon- parisons between State or nonprofit agencies ment, and that the intensity of institutional and commercial organizations, national cul- processes varies over time). Insights into ture, and the role of networks, consultants institutional change had been much and executives in transmitting or communi- advanced, although emphasis primarily cating institutional values and beliefs. remained on exogenous explanations. These During this period, researchers also initiated were all important elaborations. Moreover, combinations or juxtapositions of institu- attention had begun to turn towards highly tional theory with other perspectives significant issues: the emergence (and disap- (resource dependence theory, population pearance) of organizational forms; the cre- ecology, for example). Ambiguities emerged ation of markets; the adoption and around the meaning of isomorphism (occa- abandonment of market strategies; the inter- sionally misapplied as inevitable homogene- action of organizational behaviour and finan- ity) and institutional context (as cultural cial markets; the adoption of affirmative prescriptions versus regulatory policies, the action in organizations and the determinants latter being defensible as an institutional con- of workplace violence; the institutional struct only insofar as they reflect societal antecedents of environmental management norms and values). Nonetheless, this period, and sustainability. These are important issues we suggest, also spawned material insights within organization theory. Aldrich (1999: into how organizations, as active agents and 53), for one, concluded that: ‘Despite 9781412931236-Intro 5/19/08 4:24 PM Page 23

INTRODUCTION 23

pressures from applied fields to focus on same point, accusing researchers of ‘measur- narrow issues such as efficiency and intraor- ing only the outcome while assuming the ganizational problems, institutional theory process’. Mizruchi and Fein (1999) also has succeeded in expanding organizational noted that most researchers report their find- studies’ scope and vision’. Clearly, there has ings as evidence of mimetic effects but use been no withering of institutional effort. empirical measures that could just as easily As the literature of the 1990s and the be interpreted as reflecting normative and/or present decade gave expression to a startling coercive processes. These criticisms, unfor- outgrowth of the theory’s explanatory possi- tunately, still apply (cf. R. Meyer, Chapter 21 bilities, the introduction of Scott’s (1995: this volume). Nevertheless, mimetic behav- 2001) three pillars and his accompanying iour is assumed (wrongly) within organiza- magisterial review of the field brought an tional theory as indicative of institutional impressive (and influential) integrative focus processes and as empirically confirmed. to the most generative period of institutional Haunschild’s (1993) study, for example, is theory’s development. Nevertheless, the extensively cited as evidence of institutional broadening scope of institutional applica- mimesis but only a minority of those doing tions heightens the risk of theoretical inco- so have acknowledged Haunschild’s own herence. However, before drawing our own cautious interpretation of her results. conclusions about the current status of insti- For this reason, future research might ben- tutional theory, let us first suggest directions efit from more nuanced explanations of the (the whithering) for future research and then processes behind, and reasons for, mimetic reflect in the Conclusions on our level of behaviour. Research should attempt to inter- optimism around the question initially posed pret and identify the institutional logics about the extent of coherence versus prolifer- (Thornton, 2002; Thornton & Ocasio, ation in the theory’s future. Chapter 3 this volume) or structures of shared values and beliefs that induce and propel imitation (cf. Czarniawska, Chapter 32 and New directions? Sahlin & Wedlin, Chapter 8 this volume). Another approach might be to contrast We suggest eight directions for future the literature on bandwagon effects research. These reflect both our concerns (Abrahamson, 1996; Henderson & Cool, about the state of institutional theory and our 2003) with current knowledge of mimetic reading of the recent growth in interest of isomorphism to illuminate with more sub- particular research areas. tlety and accuracy the distinction between First, although some progress has been technically rational and legitimating motiva- made, studies still struggle to relate institu- tions of organizational imitation. In the inter- tional processes to learning and to clearly ests of broadening attention beyond mimetic separate institutional effects from vicarious processes, further elaboration of coercive learning (competitive isomorphism). By and and normative mechanisms also appears war- large, diffusion studies have continued to ranted (Kock, 2005; Haunschild & Chandler, assume that convergent behaviour indicates Chapter 26 this volume). For example, the functioning of institutional processes (see recent theory development applying an insti- Haveman & David, Chapter 24 and Zilber, tutional perspective to government and Chapter 5 this volume) even though, at the policy making has begun to illuminate gov- beginning of the 1990s, Haunschild had ernment efforts to overturn or reinterpret bar- pointedly remarked that: ‘[w]e know that gains with foreign investors (Henisz & acquisitions are imitated, but we don’t know Zelner, 2005). The institutional literature’s why’ (1993: 588). Later in the decade, rather selective emphasis on imitative or Mizruchi and Fein (1999: 664) made the vicarious learning also invites a broader 9781412931236-Intro 5/19/08 4:24 PM Page 24

24 THE SAGE HANDBOOK OF ORGANIZATIONAL INSTITUTIONALISM

application of the theory to other forms of processes’ (Zilber, 2006: 281). Translation, organizational learning, and it may be partic- as previously noted, refers to the transforma- ularly relevant to the current emphasis in the tion of ideational and material objects within organizational learning literature on learning and during the process of adoption, diffusion, through exploitation (replication or refine- and/or institutionalization (Czarniawska & ment of existing routines) versus exploration Joerges, 1996; Czarniawska & Sevón, 2005; (concerted variation and experimentation) Zilber, 2006). Its emphasis on the symbolic (March, 1991; Gupta, Smith & Shalley, aspects of institutionalization (Sahlin- 2006). Just as the replication of existing rou- Andersson, 1996), the complexities sur- tines may be partially explicable by institu- rounding the construction of rational myths, tionalized, legitimized or taken-for-granted and the travel of ideas across organizational understandings, so too may learning through fields (Rao, 2004; Djelic & Sahlin- exploration occur along entirely new trajec- Andersson, 2006; Thornton & Ocasio, tories through the intervention of institu- Chapter 3 this volume), offers the promise of tional entrepreneurs (Maguire, Hardy, & more rich and detailed insights into how Lawrence, 2004; Greenwood & Suddaby, institutional practices and processes migrate 2006). These theoretical conjectures, how- and diffuse across fields and over time. ever, await empirical validation. Another timely extension to future Second, many studies have been parsimo- research on diffusion might draw inspiration nious in their account of institutional from Sanders and Tuschke’s (2007: 33) study processes. Meyer and Rowan’s (1977) of diffusion across distinct fields, particularly emphasis upon taken-for-granted cultural in cases where practices spread ‘from one models has become somewhat reduced in institutional environment, where it is widely some accounts to mapping the diffusion of prevalent and taken-for-granted, to another highly specific managerial practices, or, in environment, where its introduction violates later studies, to organizational foundings. all three of Scott’s pillars of legitimacy’. The Many of the earlier diffusion studies, in par- possibility of viral institutional diffusion that ticular, tended to tell a less expansive story, jumps from one institutional field to another, deploying large-scale analysis to rigorously where its spread is unexpected, offers a more examine very narrowly drawn hypotheses. rigorous test of the power and limits of insti- Stinchcombe (1997) was particularly critical tutional diffusion and the coercive, normative of the tendency to ‘mathematize’ institutional and cognitive forces underlying diffusion effects, accusing its proponents of missing trajectories that are sufficiently powerful ‘the guts’ of institutional influences. to infiltrate unexpected terrain. As Sanders Not all diffusion researchers have and Tuschke (2007) observe, we may also restricted their attention to specific manage- generate new understanding about how rial practices. D’Aunno, Sutton and Price organizations learn from multiple or differ- (1991), for example (see also Schneider, ing institutional contexts. Leicht and Fennel 1993), compared the adoption and the conse- (Chapter 17 this volume) examine an quences of competing mental-health care instance of ‘viral diffusion’ in their analysis models. These models have broad implica- of the diffusion of managerial logics and tions, including the choice of organizational practices from the corporate sector to the form, the scope of professional status, and professions. the kinds of technologies to be deployed. As Third, for the most part, institutional work such, this study is very different in its scope has remained stubbornly silent on issues of than most diffusion studies. It is also note- social power, although, as we noted above, worthy that ‘recent theoretical developments incorporation of social movement theory holds have moved from a “diffusion” to a “transla- considerable promise (e.g. Rao & Kenney, tion” model for understanding institutional Chapter 13 this volume). There have also 9781412931236-Intro 5/19/08 4:24 PM Page 25

INTRODUCTION 25

been some attempts to examine issues of An inviting door into the dark side of insti- stratification and entrenched patterns of dis- tutional processes comes from researchers crimination (e.g. Lucas, 2003), social posi- who have applied institutional theory to sus- tion (e.g. Battilana, 2006) and the tainability and environmental issues (e.g. relationship between institutionalized beliefs Jennings & Zandbergen, 1995; Hoffman, and patterns of intraorganizational privilege 1999; Hoffman & Ventresca, 2002; Bansal & (e.g. Zilber, 2002). Suddaby et al. (2007) Clelland, 2004; Bansal, 2005; Davis & analyzed the link between the Big Four Anderson, Chapter 14 this volume). To the accounting firms and non-governmental extent that sustainability researchers see transnational organizations such as the World unresolved tensions between instrumental Trade Organization, and cautioned against and moral solutions to environmental the loss of professional accountability. But destruction, institutional theory’s refutation these remain rare exceptions. Two examples, of exclusively rational economic motives of both of which refer to the functioning of organizational behaviour may serve as a financial markets, illustrate the relative neg- useful bridge to less instrumentally reasoned lect of elite interests and social power. and more socially justified bases for studying Hayward and Boeker (1998) documented societal-level harm. In a suggestive case how security analysts rate their firm’s clients’ study of ISO standard adoption, Boiral securities more favourably than other ana- (2007), for example, examined corporate lysts rating the same securities. These biases greening as an institutionalized rational myth were concealed through symbolic acts (codes and revealed the extent to which the adoption of ethics, Chinese walls) that legitimated of environmental standards was a ceremonial investment banks as trustworthy and beyond and potentially hypocritical environmental reproach. (This façade of legitimacy surround- strategy. ing the operations of professional service Overall, however, we have limited under- firms would collapse some years later follow- standing of how power, conflict and funda- ing the Enron affair). Westphal and Zajac mental social interests affect and are affected (1998, 2001) analyzed how corporations by institutional processes. There have been adopt but fail to implement symbolic practices clarion calls for giving attention to the sys- (such as long-range incentive plans for chief temic structures of power and domination executives) in order to appease shareholders that define institutions and that privilege their and manipulate share values. On the one hand, ruling elites. Useful frameworks have been this can be seen (as it was by Westphal & advanced (e.g. Lawrence, Winn & Jennings, Zajac) as an example of decoupling. On the 2001; Hargrave & Van de Ven, 2006; Cooper, other, it could be seen as willful manipulation Ezzamel & Willmott, Chapter 28 and of shareholder perceptions in order to affect Lawrence, Chapter 6 this volume). But share prices. Both of these studies, in other empirical work is badly needed. As sug- words, uncovered the dark side of symbolic or gested by Hasse and Krücken (Chapter 22, legitimating behaviour Ð namely, the use of this volume) and R. Meyer (Chapter 21, this symbols to adversely affect certain societal volume) issues of power and conflict could interests while privileging others Ð but illus- be more thoroughly understood if current trate how we too often neglect to assess the conceptual tools of organizational institu- societal consequences of institutionalized cor- tionalism were to be combined with the porate behaviour. Fiss (Chapter 15 this closely related European sociology of knowl- volume) extends this perspective by analyzing edge and system theories. corporate governance through an institutional Fourth, most studies have portrayed insti- lens, observing how coalitions of actors con- tutional processes as fully formed (Aldrich, struct ‘moral orders’ that determine the power 1999: 52) and underplayed Meyer and structure of corporations. Rowan’s (1977) emphasis that institutional 9781412931236-Intro 5/19/08 4:24 PM Page 26

26 THE SAGE HANDBOOK OF ORGANIZATIONAL INSTITUTIONALISM

contexts are socially constructed. Barley and with whom) change as fields mature Tolbert (1997: 93) attempted to redress this (see also Owen-Smith & Powell, Chapter 25 imbalance, first by criticizing institutional this volume). Anand and Watson (2004) theory’s neglect of how institutional arrange- demonstrated the role of ‘tournament ritu- ments are ‘created, altered, and reproduced’, als’, such as the Grammy Awards, in field and second by proposing incorporation of construction. Greenwood and Suddaby Giddens’ theory of structuration (for an early (2006) looked at professional associations as attempt to do so, see Phillips, Lawrence & forums within which members of a profes- Hardy, 2000). Barley and Tolbert’s (1993) sion define and theorize its appropriate central concern, that most researchers had boundaries. Fligstein (2002) looked at how simply assumed the existence of institutions, regulatory institutions and economic activity was largely correct, although there were develop symbiotically and coalesce into exceptions. Edelman’s work, for example, as stable fields. Garud, Jain and Kumaraswamy described above, clearly addressed institu- (2002) traced the tensions and political tional creation, albeit at a much more socie- dynamics involved in adoption of field-wide tal level than perhaps intended by Barley and common technological standards. Brunsson Tolbert (1997). Suchman and Cahill (1996) and Jacobsson (2000) looked at emerging had traced how interactions between Silicon standardization procedures. Wedlin (2006) Valley lawyers and their clients constructed looked at rankings of business schools and and then reproduced normative models of Djelic and Sahlin-Andersson (2006) appropriate behaviour in the venture capital explained the institutional dynamics of new industry. Bacharach, Banberger and regulations (cf. Sahlin & Wedlin, Chapter 8 Sonnenstuhl (1996) had analyzed the this volume). All of these studies are steps micropolitics of dissonance reduction that towards understanding processes of institu- enabled transformational change within an tional construction. Powell and Colyvas organization (see also Johnson, Smith & (Chapter 10, this volume) and Colyvas and Codling, 2000). At a more macro-level, Powell (2006) elaborate key questions of Ingram and Inman (1996) had tracked how this research agenda, including how cate- regulatory ‘institution building’ arose from gories and routines emerge, and illustrate collective action. By and large, however, how archival materials may be used to institutional studies had not been overly con- address them. cerned with how institutions arise. Separating institutional construction (how Following publication of Barley and institutions and fields emerge) from institu- Tolbert’s paper, various developments tional reproduction, is not easy and more addressed their concerns. The late 1990s saw attention has been given to the former than early stirrings of interest ‘discourse theory’ the latter. But an important and imaginative (Phillips & Hardy, 1997; see Phillips & line of research is Zuckerman’s exploration Malhotra, Chapter 29 in this volume), ‘narra- of ‘categorical imperatives’ (Zuckerman, tives’ (Czarniawska, 1997 and Chapter 32, this 1999, 2000; Zuckerman & Kim, 2003; see volume), and the role of ‘rhetoric’ (Zbaracki, also Rao, Monin & Durand, 2003; Durand, 1998; Suddaby & Greenwood, 2005). Related Rao & Monin, 2007). Zuckerman’s work has work by Lawrence et al. (2002) examined a broader theoretical purpose, but it rightly how ‘proto-institutions’ (institutions in the identified the failure of institutionalists to making) can evolve from interorganizational demonstrate ‘that defying classification’ (i.e. collaboration. Powell, White, Koput and deviating from socially accepted cognitive Owen-Smith’s (2005) award-winning study frameworks) ‘invites penalties’ (1999: 1399). of network structures in the US biotechnol- A core theme of organizational institutional- ogy industry provided a complex account of ism is that deviation from socially defined how the bases of affiliation (who partners expectations of appropriate conduct are, 9781412931236-Intro 5/19/08 4:24 PM Page 27

INTRODUCTION 27

often subtly, projected onto social actors who useful analysis of the conditions conducive are cajoled into conforming by self- to institutional entropy, deinstitutionalization activating mechanisms of disapproval. has remained largely neglected (see Dacin & Zuckerman’s work is a rare, early examina- Dacin, Chapter 12 this volume). As Scott tion of this social process. More work in this put it, institutional work has failed to capture area is clearly warranted. the ‘arc of institutionalization’ (2005: 472), Interestingly, current work on cognition in focusing instead upon ‘the middle moment’ the strategy literature has remained divorced (2005: 471). Ahmadjian and Robinson’s from Scott’s well-recognized (2001) cogni- (2001: 647) remark that ‘deinstitutionalization tive pillar and from the scope of institutional is not simply institutionalization’s converse’ research on the construction and transmis- raises the call for better understanding of sion of organizational practices as shared how institutions decline. cognitions and logics (Daniels, Johnson & de As a means of introducing more integration Chernatony, 2002). Roberts (Chapter 23, this to the literature on institutional change and to volume) makes the similar point that ‘much push for its fuller theoretical treatment, less in the way of published work seems to be Hargrave and Van de Ven (2006) developed a integrating Scott’s (1995) cognitive pillar typology that identifies four internally consis- with economic perspectives on organiza- tent and distinct models of institutional tions’. Notwithstanding work by Porac and change, which they label institutional design, his colleagues (Porac, Thomas, Wilson & institutional adaptation, institutional diffu- Kanfer, 1995), the strategic management lit- sion, and collective action models. Stated erature has confined its work on cognition briefly, the institutional design model primarily to cognitive biases and to the infor- ‘focuses on the intentional behaviours of an mation processing limitations and effects of individual entrepreneur engaged in the cre- actors’ cognitive maps (‘mental models’) in ation or revision of an institution to achieve making strategic decisions (Huff, 1997; his or her goals’; the institutional adaptation Tripsas & Gavetti, 2000). By juxtaposing model ‘explains how and why organizations notions of cognitive maps and schemas with conform to forces in the institutional environ- Scott’s (2001) characterization of the cogni- ment’; the institutional diffusion model tive pillar in institutional theory, we may ‘focuses on how and why specific institu- learn more about how such cognitive maps tional arrangements are adopted (selected) become taken-for-granted as appropriate or and diffused (retained) among institutional legitimated mental models in the first place actors in a population’; and the collective (Hasselbladh & Kalinikos, 2000) and how action model ‘examines the construction of these models become shared across decision new institutions through the political behav- makers confronting similar challenges and iors of many actors who play diverse and par- environments (cf. also Czarniawska, Chapter tisan roles in the organizational field or 32 this volume). network that emerges around a social move- Fifth, the study of institutional change ment or technical innovation’ (Hargrave & brought forward several attempts to identify Van de Ven, 2006: 867Ð8). These authors call the stages of institutionalization. Tolbert and for further theorizing around the collective Zucker (1995) identified three stages, but action model, which they view, correctly, as ignored how arrangements might erode and the most recent of the four models of institu- be displaced. Greenwood et al. (2002) sug- tional change, and the one least understood. gested five stages, from deinstitutionalization Overall, their work brings a welcome move- through to diffusion/translation and subse- ment toward integration in the literature on quent re-institutionalization. But despite change and provides a set of categories for early attention from Oliver (1992) and Davis distinguishing among widely different types et al. (1994), and Clemens and Cook’s (1999) and stages of institutional change. 9781412931236-Intro 5/19/08 4:24 PM Page 28

28 THE SAGE HANDBOOK OF ORGANIZATIONAL INSTITUTIONALISM

Nevertheless, ‘much theorizing remains to be (e.g. Djelic, 1998; Guler, Guillen & done’ (Hargrave & Van de Ven, 2006: 884). MacPherson, 2002; Sahlin-Andersson & Sixth, there is a growing interest in cross- Engwall, 2002; Djelic & Quack, 2003; Djelic national studies. Until recently, there was a & Sahlin-Andersson, 2006; Drori, Chapter concern that institutional work was becom- 18 this volume). Frenkel’s (2005) study of ing distilled through the lens of US cultural how state-level institutional power structures and social dynamics. Such an ethnocentric imported two management models Ð scien- perspective risked missing interesting and tific management and human relations Ð important institutional effects (Biggart & from different cultures demonstrated how Hamilton, 1990; Orru, Biggart & Hamilton, cross-national translation occurs and how 1991; Guillen, 2001). Mizruchi and Fein these management models changed their had speculated that the myopic focus of social meaning as they moved from one US scholars is a consequence of ‘the domi- culture to another. Some researchers have nantly held view among leading North examined how ‘institutional distance’ American organizational researchers that (Kostova, 1999) between parent MNCs emphasizes cognitive decision-making (almost always, US corporations) and for- processes at the expense of inter-organiza- eign countries affect investment and expan- tional power and coercion’ (1999: 677). In sion decisions. short, Mizruchi and Fein feared that North Seventh, institutional theory has gained American researchers were reproducing a enormously for many years from its combi- world-view (rationalized myth?) that nation with, or incorporation of, other theo- provides ‘a limited picture of the world’ ries (see the Interfaces section of this volume (1999: 680). for the most current examples of this impor- The concern about an ethnocentric focus tant work). Somewhat surprisingly, a particu- may have been premature. Recent work larly pronounced growth in the application of reveals that a significant number of studies institutional theory to mainstream strategy are applying institutional theory to an inter- topics has not been accompanied by the national context and, in doing so, are opening explicit juxtaposition of institutional theory up the relevance of the theory to new topics, and specific strategy theories, apart from a such as foreign entry mode (Yiu & Makino, limited and selective combination of institu- 2002), foreign investment and the impact tional theory with the resource-based view of host country governments (Henisz & (Oliver, 1997), transaction cost theory (Yiu Zelner, 2005), capital structures in foreign & Makino, 2002), and agency theory economies (Keister, 2004), the choice of (Young, Stedham & Beekun, 2000). international alliance partner (Hitt, Ahlstrom, Institutional theory has been increasingly Dacin, Levitas & Svobodina, 2004), and firm applied to topics in strategy as diverse as turnaround (Bruton, Ahlstrom & Wan, 2003). mergers (Krishnan, Joshi & Krishnan, 2004), Several theorists gained insight into these firm heterogeneity (Walker, Madsen & and similar practices by combining organiza- Carini, 2002), firm diversification (Peng, Lee tional with comparative institutionalism & Wang, 2005), the effects of corporate (e.g. Djelic & Quack, 2003). For us, it is boards on firm performance (Peng, 2004), especially interesting to note the growing firm reputation (Rhee & Haunschild, 2006), application of institutional theory to emerg- the legitimacy of strategic alliances (Dacin, ing economies (e.g. Peng, 2003; Keister, Oliver & Roy, 2007), and managers’ mental 2004; Vaaler & McNamara, 2004; Child & models of competition (Daniels et al., 2002). Tsai, 2005; Chang, Chung & Mahmood, The literature has witnessed almost no 2006; Dobrev, Ozdemir & Teo, 2006). Work attempts, however, to combine, more on the politics of institutional translation comprehensively, a strategy theory with across cultures also holds future promise institutional theory. 9781412931236-Intro 5/19/08 4:24 PM Page 29

INTRODUCTION 29

An exciting direction for future research environment is the level of analysis (see may be the juxtaposition of institutional Wooten & Hoffman, Chapter 4 this volume). theory and the dynamic capabilities frame- Other levels of analysis have been rarely con- work (Teece, Pisano & Shuen, 1997; Helfat sidered. For example, few studies treat the & Peteraf, 2003; Helfat, Finkelstein, organization as the level of analysis (Ocasio, Mitchell et al., 2007), arguably one of the 1994) or examine how the organization more prominent perspectives in current strat- might be treated as an institutional context egy theory. This framework focuses on firms’ for understanding intraorganizational behav- capabilities to ‘integrate, reconfigure, and iour. An interesting exception was Goodrick release resources to match and even create and Salancik’s (1996) study of how cesarean market change’ (Eisenhardt & Martin, 2000: section surgeries varied by type of hospital 1107). Specifically, dynamic capabilities and the ambiguity of institutional standards refer to the capacity for rent appropriation within them. Using hospital-level data, they and profit stemming from an organization’s found that when uncertainty was greatest, ‘capability to effectively coordinate and hospital characteristics significantly influ- redeploy internal and external competences enced cesarean section rates. Their work … to achieve congruence with the changing showed how technical practices become business environment’ (Teece, Pisano & embedded in institutional frameworks at the Shuen, 1997: 515). To our knowledge, no organizational level, and how these frame- one has addressed institutional theory’s works come to define the ways in which implications for this strategic perspective (or technical forces operate. We see considerable vice versa). In examining an organization’s promise in this change to an intraorganiza- existing routines and the factors that tional level of analysis for expanding insights facilitate or impede organizational change, into institutional processes. Recent scholars the theory of dynamic capabilities shares have made a compelling case for an intraor- institutional theory’s interest in how organi- ganizational level of analysis by combining zational practices become entrenched in the an institutional perspective with such micro- cognitive repertoire of organizational rou- theories as prospect theory and the threat- tines, and the ways in which the changing rigidity hypothesis (George, Chattopadhyay, environment molds them. Further research, Sitkin & Barden, 2006). Washington, Boal & therefore, might extend dynamic capabilities Davis (Chapter 30, this volume) adopt an theory to consider the ways in which the explicitly intraorganizational perspective as adoption and diffusion of norms and values they integrate institutional and leadership in the institutional environment impede theories. rent appropriation or, alternatively, how insti- While any number of intraorganizational tutional legitimacy sustains or even acceler- phenomena might be informed by an institu- ates the flow of resources and informa- tional perspective (see for example, Quaid’s tion to organizations for developing their 1993 article on job evaluation as an institu- capabilities. tional myth), we are particularly intrigued by Eighth, and finally, institutional theory Weber and Glynn’s (2006) call for an explo- evolved as an antidote to the overly rational- ration of the connections between institu- ist and technocratic perspectives of the tional and sense-making perspectives. Weber 1960s. It emphasized the role of cultural and Glynn (2006: 1639) note that a recurrent forces within an institutional context and criticism of Weick’s (1995) influential homed in on the organizational field as the work, specifically its ‘neglect of the role of level at which such cultural pressures are larger social and historical contexts in more evident. As a consequence, the sense-making’, can be partially addressed overwhelming majority of studies now take by showing how the institutional context for granted that the organizational field or may be an important part of sense-making 9781412931236-Intro 5/19/08 4:24 PM Page 30

30 THE SAGE HANDBOOK OF ORGANIZATIONAL INSTITUTIONALISM

within organizations. Treating the organiza- they are also located within communities. tion as the institutional context for sense- Only recently has institutional work begun to making would also go far, we believe, in acknowledge that communities may influ- adding to institutional theory. In its own neg- ence the particular expression of rationalized lect of the more micro-dynamics of sense- myths and institutional logics to which making, institutional theory has relinquished organizations have to respond. Marquis the opportunity to develop a richer theory of (2003), Marquis et al. (2007), Magan Diaz, the intersubjective processes of perception, Greenwood, Li and Lorente (2007), and interpretation and interaction that establish Marquis and Lounsbury (2007), have each the core of a micro-level understanding of recognized that local or regional communi- institutionalization. Therefore, like DiMaggio ties are part of the institutional context. and Powell (1991) and Zucker (1987) we Marquis (2003), for example, traced the elite continue to see value in amending institu- social organizations and cultural associations tional theory to include more elaborated that connect organizations within a bounded micro-foundations and we propose that theo- geographical setting. Magan et al. (2007) rists might begin with Weick’s (1995) formu- suggested that connections between organi- lation of sense-making in organizations. This zations and local political elites influence focus on sensemaking also accords with decisions on the utilization of human recent criticisms of institutional theory that resources. have suggested the need for more emphasis These studies imply that the concept of on ‘the various ways by which ideas are organizational field may have been consid- objectified i.e. developed and embedded into ered unduly narrowly, and the roots of the solid and durable social artifacts’ within field concept may prove helpful in order to organizations (Hasselbladh & Kallinikos, make it into a more elaborate conceptual tool 2000: 699). A rare example of this theoretical (Martin, 2003; Mohr, 2005; Djelic & Sahlin- purpose underlies Johnson, Smith and Andersson, 2006). Although it has proved, Codling’s (2000) conceptualization of priva- and will continue to be, a useful level of tization as a series of individual actors’ analysis, it may have become too abstract attempts to enact and make sense of a change and thus divorced from the socio-political from a ‘public’ to a ‘privatized’ institutional community within which institutional and template through micro-level processes of organizational processes occur. As Magan script development. In this volume (Chapter et al. put it: ‘Analytical abstraction, intended 32) Czarniawska calls for an elaborate under- to better capture contextual influences, has standing of how ideas are objectified, resulted in blindness to how communities but also of how they form in relation to new affect organizations. The relationship technologies. between communities and organizations was, Unlike the call for better understanding of of course, integral to early institutional work intraorganizational processes, a second chal- (Selznick, 1949) but that focus has largely lenge to the dominance of field-level analysis disappeared. A return to the traditional emphasizes how the abstractness of the field emphasis upon community would be timely’. concept may have inadvertently disembed- We agree. ded institutional analysis. The field concept originally developed (see Wooten & Hoffman, Chapter 4 this volume) because of dissatisfaction with the term ‘industry’, CONCLUSIONS which neglects the role of agencies such as professional and trade associations, regula- If institutional theory is decidedly not wither- tors, the media and the State. However, ing over time in its use and migration within organizations are not only set within a field, and across the discipline of organization 9781412931236-Intro 5/19/08 4:24 PM Page 31

INTRODUCTION 31

theory (as the sheer number of recent journal Our eight foregoing directions for future articles bears witness), we still need to ask research reveal our own position on the whether its power to explain organizational theory’s strengths, limitations, and opportuni- phenomena is withering in light of its rather ties. We see that there is still much for institu- splintered proliferation. Our answer is a tional theory to address. More broadly, we somewhat emphatic no, not only because we have three reasons to feel that the overarching see thematic cohesion around its basic theo- strengths and contributions of institutional retical question and ‘answer’, but because we theory far outweigh our few lingering but by no continue to find its questions infinitely inter- means irrevocable misgivings about the theory. esting, its capacity to contextualize organiza- First, a review of institutional theory from tional phenomena beneficial, and its tolerance its early foundations to its current applica- for theoretical and methodological pluralism tions reveals an impressive tradition of inter- advantageous to knowledge sharing within facing with numerous other theories (e.g. organization analysis. We began this network theory, resource dependence theory, Introduction by identifying the central ques- ecology theory) to explain a correspondingly tion of institutional theory that we felt gave broad range of organizational phenomena value to its perspective as originally developed (e.g. organizational structure, change, iden- by early institutional theorists: why and with tity, alliances, foreign entry). The use of what consequences do organizations exhibit institutionalism with so many other theories particular organizational arrangements that and topics rather than in relative isolation is, defy traditional rational explanation? We see we believe, a conspicuous and significant the perpetuation of this central question to the strength. For as Nobel prizewinner Erwin present day as the intellectual stimulus that Schrodinger (1951: 6) observed: ‘… [i]t gives coherence to a theory that in other seems plain and self-evident, yet it needs to respects has expanded its applications to an be said: the isolated knowledge obtained by a impressively wide array of topics. Similarly, group of specialists in a narrow field has in we identify the ‘answer’ emphasized by insti- itself no value whatsoever but only in its syn- tutional theory as laying claim to unique thesis with all the rest of knowledge’. insights into the play of widely shared or Institutionalism’s proliferation, however, taken-for-granted social values and ideas that comes at the expense of linguistic specificity. complement, if not defy, calculative rational- Even the term ‘institutional’ defies precise ity and instrumental functionality. Perhaps definition, leaving it open to alternative con- the most notable shift in emphasis and inter- ceptual constructions that are adapted to the pretation over the past three decades has been topic at hand. It is for this reason, among from treating the context of social values and others, that we encourage a greater focus on ideas as influences upon organizations, developing a more common vocabulary in towards recognition of the interplay of organ- future developments of the theory. Thus, izations with their contexts. It is our position while we are delighted by the theory’s range that the endurance of institutional theory’s of application, we continue to hope for fur- fundamental question and answer is a testa- ther consensus around construct definition. ment to the resilience and robustness of the We also believe that the underspecification perspective. In answering the query stated at of institutional theory’s constructs is not alto- the outset of the Introduction, we reject the gether an incontestable impediment to theory notion that theories invariably fragment into building and research. We share Barbara proliferated confusion. The coherence and Czarniawska’s view (Chapter 32, this volume) endurance of institutional theory’s core ques- that ‘the strength of institutional theory lies in tion and answer run through most institutional the tolerance of its propagandists.’21 We view work, bringing a surprising semblance of the present scope of contributors to institu- order to a literature that exhibits rich variety. tional theory’s growth as an indication of an 9781412931236-Intro 5/19/08 4:24 PM Page 32

32 THE SAGE HANDBOOK OF ORGANIZATIONAL INSTITUTIONALISM

epistemological pluralism that tends to dis- discourse, power elites, history and the ‘iron courage polarizing styles of arguments or the- cage’ of conformity pressures. Therefore, matic quests for a monopoly on truth. It is not while not asserting that institutional theorists that all elements of institutional theory are are ideologically agnostic, either individually inevitably reconcilable with all approaches or or in the aggregate, we nonetheless do not perspectives; indeed, this is far from the truth see the institutional theorists that populate (see Cooper et al., Chapter 28 this volume). our journals and bookshelves as pre-oriented Rather, the stunning variety of topics and toward contempt for the persistence of methodologies drawing on institutional phenomena or the status quo, even when theory that we now witness in the literature is such persistence is unjust or dysfunctional. itself evidence, in our opinion, of the inven- Our disdain (we hope) is for the injustices of tiveness and flexibility of the many who practices and not for the stability of a apply it. In the interests of guarding this plu- practice per se. ralism, we tend, therefore, to favour the It is our hope as well that indicators of broader construct definition of ‘institutions’ institutionalization be sufficiently neutral to put forward by Scott (1995: 33): avoid foreclosing on avenues of research into Institutions consist of cognitive, normative, and different manifestations of institutionaliza- regulative structures and activities that provide sta- tion. Rather than insistence on a single bility and meaning to social behaviour. Institutions measure of institutionalization as that which are transported by various carriers – culture, struc- is strictly socially embedded, taken- tures, and routines – and they operate at multiple for-granted, or, alternatively, rooted in power, levels of jurisdiction. we favour Selznick’s (1996) notion of institu- Such a definition increases specificity but tionalization as a comparatively neutral encourages continued application of institu- concept, receptive to whatever arguments tional theory to multiple levels, topics, and best explain it, depending on the context in settings. which it occurs. Building on his early charac- Second, a distinct advantage of institu- terization of institutionalization as indicative tional theory, we would argue, is its singular of that which is infused with value beyond refusal to accept reality at face value, and to the technical requirements at hand, Selznick do so without the accompanying baggage of (1996: 271) suggests that we judge the cynicism. Institutional theory throws open degree to which a phenomenon is institution- the possibility that any cherished aspect of alized as the extent to which it is expendable: organizational life may be nothing more than ‘[t]he test is expendability, that is, the readi- a theoretical artifact, but the theory’s implicit ness with which the organization or practice agenda is not to heap ex ante scorn on the is given up or changed in response to new causes of misguided or overly-rationalized circumstances or demands’. This position is behaviour. Agnostic about the reasons for the consistent with Scott’s (2001: 213) exhorta- taken-for-granted understanding or social tion that ‘we try to avoid and, to the extent consensus surrounding institutionalized possible, eliminate theoretical arguments structures and behaviours, institutional based on exclusivist (often, dichotomous) researchers have been free to roam in the the- thinking’, (e.g. if the cause of persistence oretical territory of political domination, is social then it cannot be political, or unconscious reasoning, or social acceptabil- vice versa). ity to stake out their claim for theoretical Third, institutional theory has an important superiority in explaining institutionalization. capacity to stimulate contextualization. Just Thus, institutional researchers have been able as we cannot make feasible improvements in to trace the source of institutionalization and knowledge of market economies by wishing persistence to factors as varied as interorga- away their social context (see Roberts, nizational collaboration, shared norms, Chapter 23 this volume), so it is the case that 9781412931236-Intro 5/19/08 4:24 PM Page 33

INTRODUCTION 33

we cannot understand such knowledge with- and extended. The last section, Reflections, out recognizing that it is socially constructed presents essays from leading intellectuals, within a broader context. Institutional theory who reflect on the past and future of organi- has aided us in contextualizing the phenom- zational institutionalism, offering sometimes ena we study, whether that context encom- provocative but always engaging insights passes regulatory, historical, political, and observations. An important feature cognitively tacit, or socially embedded set- of the five sections as a whole is that the tings. Indeed, such contextualization is a contributors are distinctly international and distinguishing (and distinguished) feature of include not only many of the leading institutional theory and research. contributors to institutional thinking of Notwithstanding its capacity to stimulate the past three decades, but exciting new the contextualization of many phenomena, voices. institutional theory is simultaneously under Overall, on the w(h)ithering of institu- threat of serving the role of ‘default option’ in tional theory we remain fervent optimists, the development of organization theory. We and the quality and richness of this volume’s see limited but somewhat alarming use of contributions bear strong witness to this institutional theory by other theorists who point of view. Institutional theory is wither- engage institutional theory as a convenient but ing neither in its scope nor its relevance, and under-theorized catch-all for what their own we see no obstacles to a lively and productive theories cannot readily explain. The distinc- growth in the theory’s future. Perhaps Dick tive aspect of institutional-theory-as-default Scott is correct in predicting that ‘the research is not necessarily its inaccuracy, but, major contributions of institutional theory to rather, the meagreness with which institu- organizational studies may still lie ahead’ tional theory is applied; that is, the lack of (2005: 473). If there is a danger, perhaps depth or richness in its use and the rather it lies in the suppleness of the theory’s perilous distance from institutional theory’s fit to so many topics, and the corresponding core concepts, assumptions, and arguments. temptation to assume that it explains Our intent is not to discourage interfacing everything: between theories, but to urge a more comprehensive application of institutional None of us can go a little way with a theory. When it once possesses us, we are no longer our own explanations to the topics they inform. masters. It makes us speak its words, and do vio- To that end, all the chapters in this book lence to our nature. (Newman, 1907: 222) are outstanding models for future engage- ment with the theory. The chapters are Let us not, therefore, become blind adher- grouped into five distinct sections: Section I ents. Institutional theory’s seeming inclusive- reviews the Foundational Themes, recount- ness may lure us into believing we possess a ing the initial ideas that excited attention and relatively comprehensive tool for explaining showing how those ideas have been tested the social character of organizations and and enhanced. Section II, Institutional environments, that is, at best, incomplete Dynamics, contains a series of insightful and, at worst, distinctly myopic. The size reviews of current scholarships and agendas (and enthusiasm) of institutional theory’s fol- for future work. Section III, Applications, lowing is arguably the most insidious threat illustrates the extensive range of significant to its capacity to reflect creatively and criti- issues and contemporary problems to which cally on its limitations and thus to keep institutional theory can be applied. Section developing constructively as a theory of IV, Interfaces, explores points of intersec- organizations. Moreover, an institutional tion with other theories, illustrating how the perspective starts from a good question that relevance and potential of organizational remains only partially answerable within the institutionalism continues to be sharpened limits of its own assumptions (see Kraatz & 9781412931236-Intro 5/19/08 4:24 PM Page 34

34 THE SAGE HANDBOOK OF ORGANIZATIONAL INSTITUTIONALISM

Zajac, 1996; Bowring, 2000). We remain, the phrase ‘logic of appropriateness’. March empha- nonetheless, optimistic about its future sized that many decisions are not based on the cal- because it has been relatively robust across culation of future consequences but are the outcome of decision ‘rules’ or routines. March was developing different epistemological styles and differing a view of organizations as institutionally embedded disciplinary expertise, finding commensu- and, even though his ideas were anchored in deci- rable justification for both political and sion-making studies of bounded rationality (e.g. social rationales, and for both reflexive and March & Simon, 1958; Cyert & March, 1963), deci- more reductionist explanations of organi- sion-making ambiguity (e.g. March & Olsen, 1976) and, more broadly, political science (e.g. March & zational action. If institutional theory Olsen, 1989), these ideas did not develop in isolation becomes too institutionalized, however, its from other contributions to institutional theory. own legitimacy may exert an isomorphic or Sahlin and Wedlin (Chapter 8 this volume) review the homogenizing effect on the richness and influence of this line of research, especially on breadth of explanations it currently con- Scandinavian institutionalism. It is notable that three of the primary theorists of institutional theory – John tributes to our understanding of organiza- Meyer, Dick Scott and Jim March – were based at tional processes and phenomena. And that, Stanford. should it happen, would be a signal of a 4 Scott (1983: 161) explicitly qualified any ten- withering theory. dency towards homogeneity: ‘While there may be some convergence in the general overall pattern exhibited by organizations, we are more impressed by the variety of forms and practices encountered. We see organizational environments as becoming NOTES more highly organized but not necessarily in the same manner; and the cultural beliefs governing 1 As we note below, Mohr (2005) showed that organizational practice, while similar in promoting institutionalist theories have evolved essentially in rationalization, still vary in their particular specifica- two directions. The dominant trend has directly fol- tions for differing types of organizations’. lowed DiMaggio and Powell (1983) and privileged 5 Before progressing, we wish to make the fol- studies and explanations of networks and interac- lowing comment. Meyer and Rowan (1977) and tions. The other trend, centring around John Meyer’s Zucker (1977) were clearly influenced by Berger and work, has privileged studies and explanations of Luckman (1967). Berger and Luckman proposed that meaning. Mohr finds this division unfortunate and social stability occurs in three stages: actors interact sees great potentials in bringing the two aspects of and, over time, their interactions become ‘habitual- field back together (Djelic & Sahlin-Andersson, 2006 ized’. Conforming to habitualized patterns makes argue in the same direction). social interactions predictable and thus orderly. 2 Emphasis upon social values and cognitive Subsequently, habitualized actions become ‘recipro- systems differentiates ‘organizational institutionalism’ cal typifications of action’, i.e. the habits are recipro- (not a term used by Meyer & Rowan) from other cally reflected upon and conceptualized as roles (i.e. versions of institutionalism. Historical institutional- they become ‘objectified’). Once reciprocal typifica- ism, for example, betraying its origins in comparative tions are passed on to third parties, especially new political science, focuses upon structures (institu- generations, then reciprocal typifications become tions) of the state (e.g. state agencies, corporate eco- regarded as ‘real’ and natural, i.e. they acquire ‘exte- nomic actors such as unions and trade associations) riority’ (Berger & Luckman, 1967: 58) or, in Tolbert and traces how those structures enable and shape and Zucker’s terms, they become ‘sedimented’ and the access of organized interests in decision-making taken-for-granted. A recurrent criticism of institu- processes. Rational choice institutionalism, similarly, tional theory is that much research focuses upon the also treats (self-) interest as the key driver of behav- objectification stage (Tolbert & Zucker refer to it as iour within a context of incentives and opportunities. ‘semi-institutionalization’) rather than the sedimenta- The sociocultural approach to organizational institu- tion (full-institutionalization) stage. In this volume, tionalism, in contrast, does not see motivation as Renate Meyer argues that the legacy from Berger exclusively (or even primarily) interest-driven and in and Luckman has largely become less visible in later doing so provides ‘an important corrective’ to other developments of organizational institutionalism, and organizational perspectives (DiMaggio, 1988). she shows that many of the recent questions posed 3 A related but more micro approach to the insti- by theoreticians in the field could find much inspira- tutional context emerged from the research pro- tion and clarification from Berger and Luckman’s gramme of Jim March, also at Stanford. March coined work. 9781412931236-Intro 5/19/08 4:24 PM Page 35

INTRODUCTION 35

6 For example, Alan Meyer (1982), in discussing been created (e.g. Bacharach et al., 1996; Djelic & how hospitals responded to a doctors’ strike referred Quack, Chapter 11, this volume). This latter usage to Meyer and Rowan as follows: ‘Hospitals inhabit clearly connects more closely to the definition of highly institutionalized environments that may foster ‘institution’ as regulation. the construction of superficial structural facades. 15 An interesting application of identity theory Meyer and Rowan (1977) argue that ceremonial would be to connect institutional theory with con- structures harmonizing with societal ideologies cepts of ‘celebrity firms’. Rindova, Pollock and attract resources and promote the survival of such Hayward (2006) propose that celebrity firms (firms organizations. But this study suggests that ceremo- that attract a high level of public attention and posi- nial structures may also promote survival and tive emotional appeal from being different) are resource conservation by harmonizing with organiza- socially constructed primarily by the media, and that, tional ideologies’. once having achieved celebrity status, a firm behaves 7 Most empirical work came from Stanford so as to retain that status. From our point of view, University (in addition to Meyer & Scott, there was a the conferring of celebrity upon non-conforming stream of papers from Jeffrey Pfeffer, Kathy firms may serve to legitimate deviance and thus con- Eisenhardt and Jim Baron). tribute to the prospect of institutional entrepreneur- 8 The idea of translation involved the movement ship and change. of ideas across organizations. An interesting parallel 16 More recent studies have extended the trans- is Barley’s (1986) interest in the ‘slippage’ within lation theme to the movements of ideas across organizations as individuals draw upon institutional- national institutions (e.g. Djelic, 1998; Sahlin- ized norms to enact their roles. Andersson & Engwall, 2002). 9 These early studies applied a long historical 17 See J. Meyer (Chapter 34, this volume), for a perspective on institutionalization. They were critical discussion of this development. Meyer (1996) designed around – and reinforced the notion – used the term ‘soft’ actor to emphasize actors as cul- that institutionalization involves long historical and turally constrained and dependent. inert processes. Even though calls for more historical 18 Earlier, we commented upon Bourdieu’s studies are often heard, many of the later diffusion influence on the early institutional theorists. studies applied a much shorter time span. This defi- Very soon direct references to his work largely ciency means, among other things, that the long ceased, at least in North American studies. Later, term consequences (e.g. are they retained) of adopt- however, some of the main assumptions and results ing new organizational elements have been largely from Bourdieu’s work on fields reappeared (e.g. neglected. Wedlin, 2006). One such finding is that changes in 10 But not always. Oliver (1988) for example, fields develop as so called pretendents – trying to deliberately contrasted institutional theory with pop- enter and exact influence over the field – challenge ulation ecology and strategic choice theory, in order dominating incumbents. Dominating actors seek to assess its validity (it failed the test!) to defend the status quo and protect their own cen- 11 An excellent statement on this issue is Biggart tral role in the field. This framework directs the theo- & Delbridge (2004). rist’s attention to the periphery of organizational 12 Abrahamson (1991: see also, Abrahamson & fields as the likely source of change (cf. Bourdieu, Rosenkopf, 1993) distinguished institutional from 1977, 1984). competitive ‘bandwagon’ pressures and showed 19 Because of its focus on translation, European how the latter also produces the two-stage diffusion research was more inclined to view change as the model from which institutionalists erroneously infer consequence of endogenous and exogenous forces. institutional processes. Early and late adopters in the 20 A very influential work underpinning much of diffusion curve can be motivated by managerial per- this work is Power (1997). ceptions of the competitive risks of non-adoption. 21 This observation was reinforced by a heavily 13 Broadly speaking, Neilson and Rao were cor- attended 2006 conference on institutional theory rect. But a small number of studies did contribute to hosted by the University of Alberta, which brought better understanding of the reciprocal interaction together quant jocks, interpretivists, critical theorists, between organization and context, both at the level organizational theorists, strategy theorists, dis- of the strategic group (e.g. Porac et al., 1989), and at course analysts, ecologists, and micro-organizational the level of the organization (e.g. Barley, 1986). behaviour theorists, applying institutional theory to 14 Even the term institutionalized, however, had everything from identity to political mobilization. The subtle variations of usage. As noted here, for most most striking aspect of this conference was the rela- people it meant that something is taken for granted: tive ease and pronounced tolerance with which par- i.e. objectified as the natural order of things (Tolbert ticipants were able to converse across widely & Zucker, 1995). But, in some instances, institution- differing ontological assumptions, interests, and alized meant that a formal organization or rule had methodologies. 9781412931236-Intro 5/19/08 4:24 PM Page 36

36 THE SAGE HANDBOOK OF ORGANIZATIONAL INSTITUTIONALISM

REFERENCES Bansal, P., and Clelland, I. 2004. Talking trash, legitimacy, impression management and Abbott, A. 1988. The System of Professions. unsystematic risk in the context of the natu- Chicago, IL: University of Chicago Press. ral environment. Academy of Management Abrahamson, E. 1996. Management fashion. Journal, 47: 93–103. Academy of Management Review, 16: Barley, S.R. 1986. Technology as an occasion 254–284. for structuring: Evidence from observations Abrahamson, E. 1991. Managerial fads and of CT scanners and the social order of radiol- fashions: The diffusion and rejection of inno- ogy departments. Administrative Science vations. Academy of Management Review, Quarterly, 31 (1): 78–108. 16 (3): 586–612. Barley, S.R., and Tolbert, P.S. 1997. Abrahamson, E., and Rosenkopf, L. 1993. Institutionalization and structuration: Studying Institutional and competitive bandwagons: the links between action and institution. Using mathematical modeling as a tool to Organization Studies, 18 (1): 93–117. explore innovation diffusion. Academy of Baron, J.N., and Bielby, W.T. 1986. The prolifer- Management Review, 18 (3): 487–517. ation of job titles in organizations. Ahmadjian, C.L., and Robinson, P. 2001. Safety Administrative Science Quarterly, 31 (4): in numbers: Downsizing and the deinstitution- 561–586. alization of permanent employment in Japan. Baron, J.N., Davis-Blake, A., and Bielby, W.T. Administrative Science Quarterly, 46: 622–654. 1986. The structure of opportunity: Aldrich, H.E. 1999. Organizations Evolving. How promotion ladders vary within and London: Sage Publications. among organizations. Administrative Science Aldrich, H.E., and Fiol, C.M. 1994. Fools rush in? Quarterly, 31 (2): 248–273. The institutional context of industry creation. Baron, J.N., Jennings, P.D., and Dobbin, F.R. Academy of Management Review, 19 (4): 1988. Mission control: The development of 645–670. personnel systems in United States industry. Anand, N., and Watson, M.R. 2004. Tournament American Sociological Review, 53 (4): rituals in the evolution of fields: The case 497–514. of the Grammy Awards. Academy of Battilana, J. 2006. Agency and institutions: The Management Journal, 47 (1): 59–80. enabling role of individuals’ social position. Arndt, M., and Bigelow, B. 2000. Presenting Organization, 13: 653–676. structural innovation in an institutional envi- Baum, J.A.C., and Powell, W.W. 1995. ronment: Hospitals’ use of impression man- Cultivating an institutional ecology of organ- agement. Administrative Science Quarterly, izations: Comment. American Sociological 45 (3): 494–522. Review, 60 (4): 529–538. Arthur, M.M. 2003. Share price reactions to Baxter, V., and Lambert, C. 1990. The national work-family initiatives: An institutional per- collegiate athletic association and the gover- spective. Academy of Management Journal, nance of higher education. Sociological 46 (4): 497–505. Quarterly, 31 (3): 403–421. Astley, W.G., and Van de Ven, A.H. 1983. Central Beck, N., and Walgenbach, P. 2005. Technical perspectives and debates in organizational efficiency or adaptation to institutionalized theory. Administrative Science Quarterly, 28: expectations? The adoption of ISO 9000 stan- 245–273. dards in the German mechanical engineering Bacharach, S.B., Banberger, P., and industry. Organization Studies, 26 (6): 841–866. Sonnenstuhl, W.J. 1996. The organizational Berger, T., and Luckmann, P. 1967. The Social transformation process: The micropolitics of Construction of Reality. New York: Doubleday dissonance reduction and the alignment of Anchor. logics of action. Administrative Science Biggart, N.W., and Delbridge, R. 2004. Systems Quarterly, 41 (3): 477–506. of exchange. Academy of Management Bansal, P. 2005. Evolving sustainability: A longi- Review, 29 (1): 28–49. tudinal stud of corporate sustainable devel- Biggart, N.W., and Hamilton, G.G. 1990. opment. Strategic Management Journal, 26: Explaining Asian business success: Theory no. 197–218. 4. Business and Economics Review, 5: 11. 9781412931236-Intro 5/19/08 4:24 PM Page 37

INTRODUCTION 37

Birnbaum, P.H., and Wong, G.Y.Y. 1985. and institutional constraints in emerging Organizational structure of multinational economies: Evidence from China and Taiwan. banks in Hong Kong from a culture-free per- Journal of Management Studies, 42: 177–196. spective. Administrative Science Quarterly, Christensen, S., Karnoe, P., Pedersen, J.S., and 30 (2): 262–277. Dobbin, F. 1997. Actors and institutions: Boiral, O. 2007. Corporate greening through Introduction. American Behavioral Scientist, ISO 14001: A rational myth? Organization 40 (4): 392–396. Science, 18: 127–146. Clemens, E.S., and Cook, J.M. 1999. Politics Bourdieu, P. 1984. Distinction. Cambridge, and institutionalism: Explaining durability MA: Harvard University Press. and change. Annual Review of Sociology, Bourdieu, P. 1977. Outline of a Theory of Practice. 25: 441–466. Cambridge: Cambridge University Press. Colyvas, J.A., and Powell, W.W. 2006. Roads to Bowring, M.A. 2000. De/constructing theory: institutionalization: The remaking of bound- A look at the institutional theory that posi- aries between public and private science. tivism built. Journal of Management Inquiry, Research in Organizational Behavior, 27: 9: 258–270. 305–353. Brunsson, N. 2006. Mechanisms of Hope: Covaleski, M., Aiken, M., and Birnberg, J.G. Maintaining the Dream of the Rational 1986. Accounting and theories of organiza- Organization. Malmö: Liber. tions: Some preliminary considerations/dis- Brunsson, N. 1989. The Organization of cussion. Accounting, Organizations and Hypocrisy: Talk, Decisions and Actions in Society, 11 (4, 5): 297–324. Organizations. Chichester: John Wiley and Cyert, R.M., and March, J.G. 1963. A Behav- Sons. ioral Theory of the Firm. Englewood Cliffs, Brunsson, N. 1985. The Irrational Organization. NJ: Prentice-Hall. Chicester: John Wiley and Sons. Czarniawska, B. 1997. Narrating the Organiza- Brunsson, N., and Jacobsson, B. (eds.) 2000. tion: Dramas of Institutional Identity. A World of Standards. Oxford: Oxford Chicago, IL: University of Chicago Press. University Press. Czarniawska, B., and Joerges, B. 1996. The Bruton, G.D., Ahlstrom, D., and Wan, J.C.C. travel of ideas. In B. Czarniawska-Joerges 2003. Turnaround in east Asian firms: and G. Sevón (eds.), Translating Organiza- Evidence from ethnic overseas Chinese com- tional Change, pp. 13–48. Berlin: de Gruyter. munities. Strategic Management Journal, 24: Czarniawska, B., and Sevón, G. (eds.) 2005. 519–540. Global Ideas: How Ideas, Objects and Prac- Campbell, J.L. 2004. Institutional Change and tices Travel in the Global Economy. Lund: Globalization. Princeton, NJ: Princeton Liber and Copenhagen Business School Press. University Press. Czarniawska, B., and Sevón, G. 1996. Carroll, G.R., Goodstein, J., and Gyenes, A. Introduction. In B. Czarniawska and 1988. Organizations and the State: Effects of G. Sevón (eds.), Translating Organizational the institutional environment on agricultural Change. Berlin: de Gruyter. cooperatives in Hungary. Administrative D’Aunno, T., Sutton, R.I., and Price, R.H. 1991. Science Quarterly, 33 (2): 233–256. Isomorphism and external support in con- Carroll, V.P., Lee, H.L., and Rao, A.G. 1986. flicting institutional environments: A study of Implications of salesforce productivity het- drug abuse treatment units. Academy of erogeneity and demotivation: A navy Management Journal, 14: 636–661. recruiter case study. Management Science, Dacin, T., Goldstein, J., and Scott, W.R. 2002. 32 (11): 1371–1389. Institutional theory and institutional change: Chang, S., Chung, C., and Mahmood, I.P. Introduction to the special research forum. 2006. When and how does business group Academy of Management Journal, 45: affiliation promote firm innovation? A tale of 45–56. two emerging economies. Organization Dacin, M.T., Oliver, C., and Roy, J. 2007. The Science, 17: 637–656. legitimacy of strategic alliances: An institu- Child, J., and Tsai, T. 2005. The dynamic tional perspective. Strategic Management between firms’ environmental strategies Journal, 28: 169–187. 9781412931236-Intro 5/19/08 4:24 PM Page 38

38 THE SAGE HANDBOOK OF ORGANIZATIONAL INSTITUTIONALISM

Daft, R. 1997. Organization Theory and Design Djelic, M.-L., and Quack, S. 2003. Globalisation (6th ed.). Nashville, TN: South-Western and Institutions: Redefining the Rules of the Publishing. Economic Game. London: Edward Elgar. Daniels, K., Johnson, G., and de Chernatony, L. Djelic, M.-L., and Sahlin-Andersson, K. 2006. 2002. Task and institutional influences on Transnational governance, 1st edn. managers’ mental models of competition. Cambridge: Cambridge University Press. Organization Studies, 23: 31–62. Dobbin, F.R. 1993. The social construction of Davis, G.F., Diekmann, K.A., and Tinsley, C.H. the Great Depression: Industrial policy during 1994. The decline and fall of the conglomer- the 1930s in the United States, Britain, and ate firm in the 1980s: The deinstitutionaliza- France. Theory and Society, 22 (1): 1–56. tion of an organizational form. American Dobbin, F.R. 1992. The origins of private social Sociological Review, 59 (4): 547–570. insurance: Public policy and fringe benefits in Davis, G.F., and Greve, H.R. 1997. Corporate America, 1920–1950. American Journal of elite networks and governance changes in Sociology, 97 (5): 1416–1450. the 1980s. American Journal of Sociology, Dobbin, F., and Dowd, T.J. 2000. The market 103 (1): 1–37. that antitrust built: Public policy, private Deeds, D.L., Mang, P.Y., and Frandsen, M.L. coercion, and railroad acquisitions, 2004. The influence of firms’ and industries’ 1825–1922. American Sociological Review, legitimacy on the flow of capital into 65: 631–657. high-technology ventures. Strategic Organi- Dobbin, F., and Dowd, T.J. 1997. How policy zation, 2 (1): 9–34. shapes competition: Early railroad foundings Denrell, J. 2003. Vicarious learning, under- in Massachusetts. Administrative Science sampling of failure, and the myths of Quarterly, 42 (3): 501–529. management. Organization Science, 14 (3): Dobbin, F., Sutton, J.R., Meyer, J.W., and Scott, 227–243. W.R. 1993. Equal opportunity law and the DiMaggio, P.J. 1991. Constructing an organiza- construction of internal labor markets. tional field as a professional project: US art American Journal of Sociology, 99 (2): museums, 1920–1940. In W.W. Powell and 396–427. P.J. DiMaggio (eds.), The New Institutionalism Dobrev, S.D., Ozdemir, S.Z., and Teo, A.C. in Organizational Analysis, pp. 267–292. 2006. The ecological interdependence of Chicago, IL: University of Chicago Press. emergent and established organizational DiMaggio, P.J. 1988. Interest and agency in populations: Legitimacy transfer, violation by institutional theory. In, L.G. Zucker (ed.), comparison, and unstable identities. Institutional Patterns and Organizations: Organization Science, 17: 557–597. Culture and Environment, pp. 3–22. Durand, R., Rao, H., and Monin, P. 2007. Code Cambridge, MA: Ballinger. and conduct in French cuisine: Impact of DiMaggio, P.J., and Powell, W.W. 1991. code changes on external evaluations. Introduction. In W.W. Powell and P.J. Strategic Management Journal, 28: 455–472. DiMaggio (eds.), The New Institutionalism Edelman, L.B. 1992. Legal ambiguity and sym- in Organizational Analysis. Chicago, IL: bolic structures: Organizational mediation of University of Chicago Press. civil rights law. American Journal of DiMaggio, P.J., and Powell, W.W. 1983. The Sociology, 97 (6): 1531–1576. iron cage revisited: Institutional isomorphism Edelman, L.B. 1990. Legal environments and and collective rationality in organizational organizational governance: The expansion of fields. American Sociological Review, 48: due process in the American workplace. 147–160. American Journal of Sociology, 95 (6): DiPrete, T.A. 1987. Horizontal and vertical 1401–1440. mobility in organizations. Administrative Edelman, L.B., Abraham, S.E., and Erlanger, Science Quarterly, 32 (3): 422–444. H.S. 1992. Professional construction of law: Djelic, M.-L. 1998. Exporting the American The inflated threat of wrongful discharge. Model: The Postwar Transformation of Law and Society Review, 26 (1): 47–83. European Business. Oxford: Oxford University Edelman, L.B., Erlanger, H.S., Lande, J. 1993. Press. Internal dispute resolution: The transformation 9781412931236-Intro 5/19/08 4:24 PM Page 39

INTRODUCTION 39

of civil rights in the workplace. Law and Society Fligstein, N., and Dauber, K. 1989. Structural Review, 27 (3): 497–534. change in corporate organization. Annual Edelman, L.B., and Suchman, M.C. 1997. The Review of Sociology, 15: 73–96. legal environments of organizations. Annual Fombrun, C.J. 1989. Convergent dynamics in Review of Sociology, 23: 479–515. the production of organizational configura- Edelman, L.B., Uggen, C., and Erlanger, H.S. tions. Journal of Management Studies, 26 1999. The endogeneity of legal regulation: (5): 458–475. Grievance procedures as rational myth. Foreman, P., and Whetten, D.A. 2002. American Journal of Sociology, 105 (2): Members’ identification with multiple- 406–454. identity organizations. Organization Science, Eisenhardt, K.M. 1988. Agency-theory and 13 (6): 618–635. institutional theory explanations: The case of Fox-Wolfgramm, S.J., Boal, K., and Hunt, J.G. retail sales compensation. Academy of 1998. Organizational adaptation to institu- Management Journal, 31 (3): 488–511. tional change: A comparative study of first- Eisenhardt, K.M., and Martin, J.A. 2000. order change in prospector and defender Dynamic capabilities: What are they? banks. Administrative Science Quarterly, 43: Strategic Management Journal, Special Issue 87–126. 21: 1105–1121. Frenkel, M. 2005. The politics of translation: Elsbach, K.D. 1994. Managing organizational How state-level political relations affect the legitimacy in the California cattle industry: cross-national travel of management ideas. The construction and effectiveness of verbal Organization, 12: 275–301. accounts. Administrative Science Quarterly, Friedland, R., and Alford, R.R. 1991. Bringing 39 (1): 57–88. society back in: Symbols, practices, and Elsbach, K.D., and Kramer, R.D., 1996. institutional contradictions. In W.W. Powell Members’ responses to organizational iden- and P.J. DiMaggio (eds)., The New Institution- tity threats: Encountering and countering the alism in Organizational Analysis. Chicago, IL: business week rankings. Administrative University of Chicago Press. Science Quarterly, 41: 442–476. Galaskiewicz, J. 1985. Professional networks Elsbach, K.D., and Sutton, R.I. 1992. Acquiring and the institutionalization of a single mind organizational legitimacy through illegiti- set. American Sociological Review, 50: mate actions: A marriage of institutional and 639–658. impression management theories. Academy Garud, R., Jain, S., and Kumaraswamy, A. 2002. of Management Journal, 35 (4): 699–738. Institutional entrepreneurship in the spon- Fennell, M.L., and Alexander, J.A. 1987. sorship of common technological standards: Organizational boundary spanning in institu- The case of Sun Microsystems and Java. tionalized environments. Academy of Academy of Management Journal, 45 (1): Management Journal, 30 (3): 456–476. 196–214. Finlay, W. 1987. Industrial relations and firm George, E., Chattopadhyay, P., Sitkin, S.B., and behavior: Informal labor practices in the west Barden, J. 2006. Cognitive underpinnings of coast longshore industry. Administrative institutional persistence and change: A fram- Science Quarterly, 32 (1): 49–67. ing perspective. Academy of Management Fligstein, N. 2002. The twenty-first century Review, 31: 347–365. firm: Changing economic organization in Ghoshal, S. 1988. Environmental scanning in international perspective. American Journal Korean firms: Organizational isomorphism in of Sociology, 107 (4): 1114–1116. action. Journal of International Business Fligstein, N. 1987. The intraorganizational Studies, 19 (1): 69–86. power struggle: Rise of finance personnel to Godard, J. 1999. Do implementation processes top leadership in large corporations, and rationales matter? The case of work- 1919–1979. American Sociological Review, place reforms. Journal of Management 52 (1): 44–58. Studies, 36 (5): 679–704. Fligstein, N. 1985. The spread of the multidivi- Goodrick, E., and Salancik, G.R. 1996. sional form among large firms, 1919–1979. Organizational discretion in responding to American Sociological Review, 50: 377–391. institutional practices: Hospitals and caesarean 9781412931236-Intro 5/19/08 4:24 PM Page 40

40 THE SAGE HANDBOOK OF ORGANIZATIONAL INSTITUTIONALISM

births. Administrative Science Quarterly, 29 Hasselbladh, H., and Kalinikos, J. 2000. The (2): 232–237. project of rationalization: A critique and re- Greenwood, R., and Hinings, C.R. 2006. Radical appraisal of neo-institutionalism in organiza- organizational change. In, S. Clegg, C. Hardy, tion studies. Organization Studies, 21: W.W. Nord and T. Lawrence (eds.), Handbook 697–720. of Organization Studies. Haunschild, P. 1993. Interorganizational imita- Greenwood, R., and Hinings, C.R. 1993. tion: the impact of interlocks on corporate Understanding strategic change: The acquisition activity. Administrative Science contribution of archetypes. Academy of Quarterly, 38: 564–592. Management Journal, 36: 1052–1081. Hayward, M.L.A., and Boeker, W. 1998. Power Greenwood, R., and Suddaby, R. 2006. and conflicts of interest in professional Institutional entrepreneurship in mature firms: Evidence from investment banking. fields: The Big Five accounting firms. Administrative Science Quarterly, 43 (1): 1–22. Academy of Management Journal, 49: Hedmo, T. 2004. Rule-making in the Transna- 27–48. tional Space: The Development of European Greenwood, R., Suddaby, R., and Hinings, C.R. Accreditation of Management Education. 2002. Theorizing change: The role of profes- Unpublished doctoral thesis #109. Department sional associations in the transformation of of Business Studies, Uppsala University. institutional fields. Academy of Management Hedmo, T., Sahlin-Andersson, K., and Wedlin, Journal, 45 (1): 58–80. L. 2006 [a]. The emergence of a European Guillen, M.F. 2001. The Limits of Convergence. regulatory field of management education. Princeton, NJ: Princeton University Press. In M.-L. Djelic and K. Sahlin-Andersson (eds.), Guler, I., Guillen, M.F., and MacPherson, J.M. Transnational Governance: Institutional 2002. Global competition, institutions, and Dynamics of Regulation. Cambridge University the diffusion of organizational practices: The Press, pp. 308–328. international spread of ISO 9000 quality cer- Hedmo, T., Sahlin-Andersson, K., and Wedlin, tificates. Administrative Science Quarterly, L. 2006 [b]. Fields of imitation: The global 47 (2): 207–232. expansion of management education. In Gupta, A.K. Smith, K.G., and Shalley, C.E. B. Czarniawska and G. Sevón (eds.), Global 2006. The interplay between exploration Ideas: How Ideas, Objects and Practices and exploitation. Academy of Management Travel in the Global Economy. Liber and Journal, 49: 693–706. Copenhagen Business School Press, Lund, Hall, P.A., and Taylor, R.C.R. 1996. Political sci- pp. 190–212. ence and the three new institutionalisms. Helfat, C.E., Finkelstein, S., Mitchell, W., Political Studies, 44 (5): 936–957. Peterak, M.A., Singh, H., Teece, D.J., and Hamilton, G.G., and Biggart, N.W. 1988. Winter, S.G. 2007. Dynamic Capabilities. Market, culture, and authority: A compara- Blackwell Publishing. tive analysis of management and organiza- Helfat, C.E., and Peteraf, M.A. 2003. The tion in the Far East. American Journal of dynamic resource-based view: Capability life- Sociology, 94: S52–S94. cycles. Strategic Management Journal, 24: Han, S.K. 1994. Mimetic isomorphism and its 997–1010. effect on the audit services market. Social Henderson, J., and Cool, K. 2003. Corporate Forces, 73 (2): 637–664. governance, investment bandwagons and Hannan, M.T., and Carroll, G. (eds.) 1995. overcapacity: An analysis of the worldwide Organizations in Industry. Oxford, UK: petrochemical industry, 1975–95. Strategic Oxford University Press. Management Journal, 24: 349–373. Hargrave, T.J., and Van de Ven, A.H. 2006. A Henisz, W.J., and Zelner, B.A. 2005. Legitimacy, collective action model of institutional inno- interest group pressures, and change in emer- vation. Academy of Management Review, gent institutions: The case of foreign investors 31: 864–888. and host country governments. Academy of Harrison, J.R. 1987. The strategic use of Management Review, 30: 361–382. corporate board committees. California Higgins, M.C., and Gulati, R. 2003. Getting off Management Review, 30 (1): 109–125. to a good start: The effects of upper echelon 9781412931236-Intro 5/19/08 4:24 PM Page 41

INTRODUCTION 41

affiliations on underwriter prestige. Jepperson, R.L. 1991. Institutions, institutional Organization Science, 14 (3): 244–263. effects, and institutionalization. In Hinings, C.R., and Greenwood, R. 2002. W.W. Powell and P.J. DiMaggio (eds.), The Disconnects and consequences in organiza- New Institutionalism in Organizational Analy- tion theory? Administrative Science sis. Chicago, IL: University of Chicago Press. Quarterly, 47 (3): 411–421. Johnson, G., Smith, S., and Codling, B. 2000. Hinings, C. R., and Greenwood, R. 1988. The Microprocesses of institutional change in the Dynamics of Strategic Change. Oxford, UK: context of privatization. Academy of Basil Blackwell. Management Review, 25 (3): 572–580. Hirsch, P.M. 1975. Organizational effective- Keister, L.A. 2004. Capital structure in transi- ness and the institutional environment. tion: The transformation of financial strate- Administrative Science Quarterly, 20: 327–344. gies in China’s emerging economy. Hirsch, P.M., and Lounsbury, M. 1997. Putting Organization Science, 15: 145–158. the organization back into organization Kitchener, M. 2002. Mobilizing the logic of theory: Action, change, and the ‘new’ insti- managerialism in professional fields: The tutionalism. Journal of Management Inquiry, case of academic health centre mergers. 6 (1): 79–88. Organization Studies, 23 (3): 391–420. Hitt, M.A., Ahlstrom, D., Dacin, M.T., Levitas, Kock, C.J. 2005. When the market mis- E., and Svobodina, L. 2004. The institutional leads: Stock prices, firm behavior, and effects on strategic alliance partner selection industry evolution. Organization Science, 16: in transition economies: China vs. Russia. 637–660. Organization Science, 15: 173–185. Kossek, E.E., Dass, P., and Demarr, B. 1994. The Hoffman, A.J. 1999. Institutional evolution and dominant logic of employer-sponsored work change: Environmentalism and the U.S. and family initiatives: Human resource man- chemical industry. Academy of Management agers’ institutional role. Human Relations, 47 Journal, 42: 351–371. (9): 1121–49. Hoffman, A.J., and Ventresca, M.J. (eds.) 2002. Kostova, T. 1999. Transnational transfer of Organizations, Policy, and the Natural Envi- strategic organizational practices: A contex- ronment. Stanford: Stanford University Press. tual perspective. Academy of Management Huff, A.S. 1997. A current and future agenda for Review, 24 (2): 308–324. cognitive research in organizations. Journal of Kostova, T., and Roth, K. 2002. Adoption of an Management Studies, 34: 947–952. organizational practice by subsidiaries of Imershein, A.W., Rond III, P.C. 1989. Elite frag- multinational corporations: Institutional and mentation in health care: Proprietary and relational effects. Academy of Management nonproprietary hospitals in Florida. Social Journal, 45 (1): 215–233. Science Quarterly, 70 (1): 53–71. Kraatz, M.S., and Zajac, E.J. 1996. Exploring Ingram, P., and Clay, K. 2000. The choice the limits of the new institutionalism: The within constraints new institutionalism and causes and consequences of illegitimate implications for sociology. Annual Review of organizational change. American Sociological Sociology, 26: 525–546. Review, 61: 812–836. Ingram, P., Inman, C. 1996. Institutions, inter- Krishnan, R.A., Joshi, S., and Krishnan, H. 2004. group competition, and the evolution of The influence of mergers in firms’ product-mix hotel populations around Niagara Falls. strategies. Strategic Management Journal, 25: Administrative Science Quarterly, 41 (4): 587–611. 629–658. Labianca, G., Fairbank, J.F., Thomas, J.B., Gioia, Ingram, P., and Silverman, B.S. 2002. D.A., and Umphress, E.E. 2001. Emulation in Introduction: The new institutionalism in academia: Balancing structure and identity. strategic management. New Institutionalism Organization Science, 12 (3): 312–330. in Strategic Management, 19: 1–30. Lawrence, T., Hardy, C., and Phillips, N. 2002. Jennings, P.S., and Zandergen, P.A. 1995. Institutional effects of interorganizational Ecologically sustainable organizations: An collaboration: The emergence of proto- institutional approach. Academy of institutions. Academy of Management Management Review, 20: 1015–1052. Journal, 45: 281–291. 9781412931236-Intro 5/19/08 4:24 PM Page 42

42 THE SAGE HANDBOOK OF ORGANIZATIONAL INSTITUTIONALISM

Lawrence, T., Winn, M.I., and Jennings, P.D. contingency of professional counter- 2001. The temporal dynamics of institutional- mobilization in U.S. banking. Academy of ization. Academy of Management Review, Management Journal, 50(4): 799–820. 25: 624–644. Martin, J.L. 2003. What is field theory? Leblebici, H., Salancik, G., Copay, A., and King, American Journal of Sociology, 109 (1): T. 1991. Institutional change and the trans- 1–49. formation of the U.S. radio broadcasting Meyer, A.D. 1982. Adapting to environmental industry. Administrative Science Quarterly, jolts. Administrative Science Quarterly, 27 36: 333–363. (4): 515–537. Lincoln, J.R., Hanada, M., and McBride, K. 1986. Meyer, J.W. 1996. Otherhood: The pro- Organizational structures in Japanese and mulgation and transmission of ideas in United States manufacturing. Administrative the modern organizational environment. Science Quarterly, 31 (3): 403–421. In B. Czarniawska and G. Sevón (eds.), Lincoln, J.R., Hanada, M., and Olson, J. 1981. Translating Organizational Change. DeGruyter, Cultural orientations and individual reactions pp. 241–252. to organizations: A study of employees Meyer, J.W., and Rowan, B. 1983. The struc- of Japanese-owned firms. Administrative ture of educational organizations. In J.W. Science Quarterly, 26 (1): 93–115. Meyer and W.R. Scott (eds.), Organizational Lincoln, J.R., and McBride, K. 1987. Japanese Environments: Ritual and Rationality. Beverly industrial organization in comparative per- Hills: Sage Publications. spective. Annual Review of Sociology, 13: Meyer, J.W., and Rowan, B. 1977. 289–312. Institutionalized organizations: Formal struc- Lucas, J.W. 2003. Status processes and the insti- ture as myth and ceremony. American tutionalization of women as leaders. American Journal of Sociology, 83: 440–463. Sociological Review, 68 (3): 464–480. Meyer, J.W., and Scott, W.R. 1983. Magan Diaz, A., Greenwood, R., Li, S.X., and Organizational Environments. Beverly Hills, Lorente, J.C. 2007. Adapting to institutional CA: Sage Publications. complexity: Spanish firms in the post-Franco Meyer, J., Scott, W.R., and Strang, D. 1987. era. To be presented at the Academy of Centralization, fragmentation, and school Management Conference in Philadelphia, district complexity. Administrative Science August, 2007. Quarterly, 32 (2): 186–201. Maguire, S., Hardy, C., and Lawrence, T.B. Mizruchi, M.S., and Fein, L.C. 1999. The social 2004. Institutional entrepreneurship in construction of organizational knowledge: A emerging fields: HI/AIDS treatment advocacy study of the uses of coercive, mimetic, and in Canada. Academy of Management normative isomorphism. Administrative Journal, 47: 657–679. Science Quarterly, 44 (4): 653–683. March, J.G. 1991. Exploration and exploitation Mohr, J.W. 2005. Implicit terrains: Meaning, in organizational learning. Organization measurement, and spatial metaphors in Science, 2: 71–87. organizational theory. In M. Ventresca and March, J.G., and Olsen, J.P. 1989. Porac (eds.), Constructing Industries and Rediscovering Institutions: The Organiza- Markets. New York: Elsevier. tional Basis of Politics. New York: Free Press. Mohr, J.W. 1998. Measuring meaning struc- March, J.G., and Olsen, J.P. 1976. Ambiguity tures. Annual Review of Sociology, 24: and Choice in Organizations. Bergen, 345–370. Norway: Universitetsforlaget. Mörth, U. (ed.). 2004. Soft Law in Governance March, J.G., and Simon, H.A. 1958. and Regulation. Cheltenham: Edward Elgar. Organizations. New York: John Wiley. Neilson, E.H., and Rao, M.V.H. 1987. The strat- Marquis, C. 2003. The pressure of the past: egy-legitimacy nexus: A thick description. Network imprinting in intercorporate com- Academy of Management Review, 12 (3): munities. Administrative Science Quarterly, 523–533. 48 (4): 655–689. Newman, J.H.C. 1907. Essays Critical and Marquis, C., and Lounsbury, M. 2007. Vive la Historical. London: Longmans, Green and résistance: Consolidation and the institutional Co., Vol. II. 9781412931236-Intro 5/19/08 4:24 PM Page 43

INTRODUCTION 43

Ocasio, W. 1994. Political dynamics and the circu- resources in the UK refugee system. lation of power: CEO succession in U.S. indus- Organization, 4 (2): 159–185. trial corporations, 1960–1990. Administrative Phillips, N., Lawrence, T.B., and Hardy, C. 2000. Science Quarterly, 39: 285–314. Inter-organizational collaboration and the Oliver, C. 1997. Sustainable competitive advan- dynamics of institutional fields. Journal of tage: Combining institutional and resource- Management Studies, 37 (1): 23–43. based views. Strategic Management Journal, Pollock, T.G., and Rindova, V.P. 2003. Media 18: 697–713. legitimation effects in the market for initial Oliver, C. 1992. The antecedents of deinstitu- public offerings. Academy of Management tionalization. Organization Studies, 13: Journal, 46: 631–642. 563–588. Porac, J.F., Thomas, H., and Baden-Fuller, C. Oliver, C. 1991. Strategic responses to institu- 1989. Competitive groups as cognitive com- tional processes. Academy of Management munities: The case of Scottish knitwear man- Review, 16: 145–179. ufacturers. Journal of Management Studies, Oliver, C. 1988. The collective strategy frame- 26 (4): 397–416. work: An application to competing predic- Porac, J.F., Thomas, H., Wilson, and Kanfer, A. tions of isomorphism. Administrative Science 1995. Rivalry and the industry model of Quarterly, 33 (4): 543–561. Scottish knitwear producers. Administrative Orru, M., Biggart, N.W., and Hamilton, G.G. Science Quarterly, 40: 203–227. 1991. Organizational isomorphism in East Powell, W.W. 1991. Expanding the scope of insti- Asia. In W.W. Powell and P.J. DiMaggio tutional analysis. In W.W. Powell, W.W. and (eds.), The New Institutionalism in Organiza- P.J. DiMaggio (eds.), The New Institutionalism tional Analysis. Chicago, IL: University of in Organizational Analysis, pp. 183–203. Chicago Press. Chicago, IL: University of Chicago Press. Peng, M.W. 2004. Outside directors and firm Powell, W.W., and DiMaggio, P.J. 1991. The performance during institutional transitions. New Institutionalism in Organizational Analy- Strategic Management Journal, 25: 453–471. sis. Chicago, IL: University of Chicago Press. Peng, M.W. 2003. Institutional transitions and Powell, W.W., White, D.R., Koput, K.W., and strategic choices. Academy of Management Owen-Smith, J. 2005. Network dynamics and Review, 28: 275–296. field evolution: The growth of interorganiza- Peng, M.W., Lee, S., and Wang, D.Y.L. 2005. tional collaboration in the life sciences. What determines the scope of the firm over American Journal of Sociology, 110 (4): time? A focus on institutional relatedness. 1132–1205. Academy of Management Review, 30: Power, M. 1997. The Audit Society. Oxford: 622–633. Oxford University Press. Perrow, C. 2002. Organizing America. Quaid, M. 1993. Job evaluation as institutional Princeton, NJ: Princeton University Press. myth. Journal of Management Studies, 30: Perrow, C. 1986. Complex Organizations: A Crit- 239–260. ical Essay, 3rd edn. New York: Random House. Rao, H. 2004. Institutional activism in the early Pfeffer, J. 1982. Organizational demography. In American automobile industry. Journal of L.L. Cummings and B.M. Staw (eds.), Business Venturing, 19: 359–384. Research in Organizational Behavior, vol. 5. Rao, H., Greve, H.R., and Davis, G.F. 2001. Greenwich, CT: JAI Press. Fool’s gold: Social proof in the initiation and Pfeffer, J., and Cohen, Y. 1984. Determinants abandonment of coverage by Wall Street of internal labor markets in organizations. analysts. Administrative Science Quarterly, Administrative Science Quarterly, 29 (4): 46 (3): 502–526. 550–572. Rao, H., Monin, P., and Durand, R. 2003. Pfeffer, J., and Davis-Blake, A. 1987. The effect Institutional change in Toque Ville: Nouvelle of the proportion of women on salaries: cuisine as an identity movement in French The case of college administrators. gastronomy. American Journal of Sociology, Administrative Science Quarterly, 32 (1): 1–24. 180 (4): 795–843. Phillips, N., and Hardy, C. 1997. Managing Rhee, M., and Haunschild, P.R. 2006. The liabil- multiple identities: Discourse, legitimacy and ity of good reputation: A study of product 9781412931236-Intro 5/19/08 4:24 PM Page 44

44 THE SAGE HANDBOOK OF ORGANIZATIONAL INSTITUTIONALISM

recalls in the U.S. automobile industry. Organizational Environments: Ritual and Organization Science, 17: 101–117. Rationality. Beverly Hills: Sage Publications. Rindova, V.P., Pollock, T.G., and Hayward, Scott, W.R. 1981. Developments in organization M.L.A. 2006. Celebrity firms: The social con- theory, 1960–1980. American Behavioral struction of market popularity. Academy of Scientist, 24 (3): 407–422. Management Review, 31 (1): 50–71. Scott, W.R., and Meyer, J. 1983. The organiza- Ruef, M., and Scott, W.R. 1998. A multidimen- tion of societal sectors. In J.W. Meyer and sional model of organizational legitimacy: W.R. Scott (eds.), Organizational Environ- Hospital survival in changing institutional ments: Ritual and Rationality. Beverly Hills, environments: Administrative Science CA: Sage. Quarterly, 43 (4): 877–904. Scott, W.R., Ruef, M., Mendel, P.J., and Sahlin-Andersson, K. 1996. Imitating by editing Caronna, C.A. 2000. Institutional Change and success: The construction of organizational Healthcare Organizations: From Professional fields. In B. Czarniawska and G. Sevón (eds.), Dominance to Managed Care. Chicago, IL: Translating Organizational Change, pp. University of Chicago Press. 69–92. Berlin: de Gruyter. Selznick, P. 1996. Institutionalism ‘old’ and Sahlin-Andersson, K., and Engwall, L. 2002. ‘new.’ Administrative Science Quarterly, 41: The Expansion of Management Knowledge. 270–277. Stanford: Stanford University Press. Selznick, P. 1949. TVA and The Grass Roots. Sanders, W.G., and Tuschke, A. 2007. The Berkeley, CA: University of California Press. adoption of institutionally contested organi- Seo, M.G., and Creed, W.E.D. 2002. zational practices: The emergence of stock Institutional contradictions, praxis and insti- option pay in Germany. Academy of tutional change: A dialectical perspective. Management Journal, 50: 33–57. Academy of Management Review, 27: Schneider, S.C. 1993. Conflicting ideologies: 222–247. Structural and motivational consequences. Sevón, G. 1996. Organizational imitation in Human Relations, 46 (1): 45–64. identity transformation. In B. Czarniawska Schrodinger, E. 1951. Science and Humanism, and G. Sevón (eds.), Translating Organiza- quoted in Goleman, D. Vital Lies, Simple tional Change. DeGruyter, pp. 49–68. Truths. London: Bloomsbury. Sheets, R.G., and Ting, Y. 1988. Determinants Scott, W.R. 2005. Institutional theory: of employee termination benefits in organi- Contributing to a theoretical research program. zations. Administrative Science Quarterly, 33 In K.G. Smith and M.A. Hitt (eds.), Great Minds (4): 607–624. in Management. Oxford: Oxford University Sherer, P.D., and Lee, K. 2002. Institutional Press. change in large law firms: A resource depend- Scott, W.R. 2004. Reflections on a half-century ency and institutional perspective. Academy of organizational sociology. Annual Review of Management Journal, 45 (1): 102–119. of Sociology, 30: 1–21. Singh, J.V., House, R.J., and Tucker, D.J. 1986. Scott, R.W. 2001. Institutions and Organiza- Organizational change and organizational tions, 2nd edn. Thousand Oaks, CA: Sage. mortality. Administrative Science Quarterly, Scott, W.R. 1995. Institutions and Organiza- 31 (3): 338–364. tions, 1st edn. Thousand Oaks, CA: Sage. Singh, J.V., and Lumsden, C.J. 1990. Theory Scott, W.R. 1991. Unpacking institutional argu- and research in organizational ecology. ments. In W.W. Powell and P.J. DiMaggio Annual Review of Sociology, 16: 161–195. (eds.), The New Institutionalism in Organiza- Staw, B.M., and Epstein, L.D. 2000. What band- tional Analysis, pp. 164–182. Chicago, IL: wagons bring: Effects of popular manage- University of Chicago Press. ment techniques on corporate performance, Scott, W.R. 1987. The adolescence of institu- reputation, and CEO pay. Administrative tional theory. Administrative Science Science Quarterly, 45 (3): 523–556. Quarterly, 32 (4): 493–511. Stern, R.N., and Barley, S.R. 1996. Organizations Scott, W.R. 1983. The organization of environ- and social systems: Organization theory’s ments: Network, cultural and historical neglected mandate. Administrative Science elements. In J.W. Meyer and W.R. Scott (eds.), Quarterly, 41 (1): 146–162. 9781412931236-Intro 5/19/08 4:24 PM Page 45

INTRODUCTION 45

Stinchcombe, A.L. 1997. On the virtues of the Tripsas, M., and Gavetti, G. 2000. Capabilities, old institutionalism. Annual Review of cognition, and inertia. Strategic Management Sociology, 23: 1–18. Journal, 21: 1147–1161. Strang, D. 1987. The administrative transfor- Vaaler, P.M., and McNamara, G. 2004. Crisis mation of American education school district and competition in expert organizational consolidation, 1938–1980. Administrative decision making: Credit-rating agencies and Science Quarterly, 32 (3): 352–366. their response to turbulence in emerging Suchman, M.C. 1995. Managing legitimacy: economies. Organization Science, 15: Strategic and institutional approaches. 687–703. Academy of Management Review, 20: Van de Ven, A.H., and Joyce, W.F. 1981. 571–611. Perspectives on Organization Design and Suchman, M.C., and Cahill, M.L. 1996. The Behaviour. New York: John Wiley and Sons. hired gun as facilitator: Lawyers and the sup- Walker, G. Madsen, T.L., and Carini, G. 2002. pression of business disputes in Silicon Valley. How does institutional change affect hetero- Law and Social Inquiry: Journal of the geneity among firms? Strategic Management American Bar Foundation, 21 (3): 679–712. Journal, 23: 9–104. Suddaby, R., and Greenwood, R. 2005. Weber, K., and Glynn, M.A. 2006. Making Rhetorical strategies of legitimacy. sense with institutions: Context, thought and Administrative Science Quarterly, 50: 35–67. action in Karl Weick’s theory. Organization Suddaby, R., Cooper, D.J., Greenwood, R. Studies, 27: 1639–1660. 2007. Transnational regulation of profes- Wedlin, L. 2006. Ranking Business Schools: sional services: Governance dynamics of field Forming Fields, Identities and Boundaries in level organizational change. Accounting, International Management Education. Organizations and Society, 32: 333–362. Cheltenham: Edward Elgar. Teece, D.J. Pisano, G., and Shuen, A. 1997. Weick, K. 1995. Sensemaking in Organizations. Dynamic capabilities and strategic management. Thousand Oaks, CA: Sage. Strategic Management Journal, 18: 509–533. Westphal, J.D., and Zajac, E.J. 2001. Thornton, P. 2004. Markets from Culture: Decoupling policy from practice: The case of Institutional Logics and Organizational stock repurchase programs. Administrative Decisions in Higher Education Publishing. Science Quarterly, 46 (2): 202–228. Stanford, CA: Stanford University Press Westphal, J.D., and Zajac, E.J. 1998. The Thornton, P. 2002. The rise of the corporation symbolic management of stockholders: in a craft industry: Conflict and conformity in Corporate governance reforms and share- institutional logics. Academy of Management holder reactions. Administrative Science Journal, 45: 81–101. Quarterly, 43 (1): 127–153. Tolbert, P.S. 1985. Institutional environments and Yiu, D., Makino, S. 2002. The choice between resource dependence: Sources of administra- joint venture and wholly owned subsidiary: tive structure in institutions of higher educa- An institutional perspective. Organization tion. Administrative Science Quarterly, 30 Science, 13 (6): 667–683. (1): 1–13. Young, G.J., Charns, M.P., and Shortell, S.M. Tolbert, P.S., and Zucker, L.G. 1995. The institu- 2001. Top manager and network effects on tionalization of institutional theory. In the adoption of innovative management S.R. Clegg, C. Hardy and W.R. Nord (eds.), practices: A study of TQM in a public hospi- Handbook of Organization Studies, pp. tal system. Strategic Management Journal, 175–190. London: Sage. 22 (10): 935–951. Tolbert, P.S., and Zucker, L.G. 1983. Young, G.J. Stedham, Y., and Beekun, R.I. 2000. Institutional sources of change in the formal Boards of directors and the adoption of a CEO structure of organizations: The diffusion of performance evaluation process: Agency- and civil service reform, 1880–1935. Administrative institutional-theory perspectives. Journal of Science Quarterly, 30: 22–39. Management Studies, 37: 277–295. Torres, D.L. 1988. Professionalism, variation, Zajac, E.J., and Westphal, J.D. 2004. The social and organizational survival. American construction of market value: Institutional- Sociological Review, 53 (3): 380–394. ization and learning perspectives on stock 9781412931236-Intro 5/19/08 4:24 PM Page 46

46 THE SAGE HANDBOOK OF ORGANIZATIONAL INSTITUTIONALISM

market reactions. American Sociological no history. American Sociological Review, 54 Review, 69 (3): 433–457. (4): 542–545. Zbaracki, M.J. 1998. The rhetoric and reality of Zucker, L.G. 1988. Institutional Patterns and total quality management. Administrative Organizations: Culture and Environment. Science Quarterly, 43 (3): 602–636. Cambridge, MA: Ballinger. Zey-Ferrell, M. 1981. Criticisms of the domi- Zucker, L.G. 1987 [b]. Institutional theories of nant perspective on organizations. The organization. Annual Review of Sociology, Sociological Quarterly, Spring: 181–205. 13: 443–464. Zilber, T.B. 2006. The work of the symbolic in Zucker, L.G. 1983. Organizations as institu- institutional processes: Translations of tions. Research in the Sociology of rational myths in Israel high tech. Academy Organizations, 2: 1–47. of Management Journal, 49: 281–304. Zucker, L.G. 1977. The role of institutionaliza- Zilber, T.B. 2002. Institutionalization as an inter- tion in cultural persistence. American play between actions, meanings and actors: The Sociological Review, 42: 726–743. case of a rape crisis center in Israel. Academy of Zuckerman, E.W., and Kim, T. Y. 2003. The crit- Management Journal, 45 (1): 234–254. ical trade-off: Identity assignment and box- Zimmerman, M.A., and Zeitz, G.J. 2002. office success in the feature film industry. Beyond survival: Achieving new venture Industrial and Corporate Change, 12 (1): growth by building legitimacy. Academy of 27–67. Management Review, 27 (3): 414–431. Zuckerman, E.W. 2000. Focusing the corporate Zucker, L.G. 1991. Postscript: Microfoundations product: Securities analysts and de-diversifi- of institutional thought. In W.W. Powell and cation. Administrative Science Quarterly, 45 P.J. DiMaggio (eds.), The New Institutionalism (3): 591–619. in Organizational Analysis, pp. 103–107. Zuckerman, E.W. 1999. The categorical imper- Chicago, IL: University of Chicago Press. ative: Securities analysts and the illegitimacy Zucker, L.G. 1989. Combining institutional discount. American Journal of Sociology, theory and population ecology: No legitimacy, 104 (5): 1398–1438.