INSTITUTIONALISMS, OLD & NEW An organization’s conformity to the common structural forms & managerial practices prevailing within an org’l field confers legitimacy and resource benefits from the other field members. Institutionalization evolves from informal norms to codified rules & regulations, sanctioned by formal regulatory orgs, such as state medical societies & regional college accreditation boards. LEGITIMACY involves normative beliefs by others about the proper, acceptable exercise of organizational authority (= legitimate power) TAKEN-FOR-GRANTED ASSUMPTIONS are beliefs held without challenge that a homogeneous set of organizational activities & structures should be rewarded with financial resources, prestige, and public esteem In contrast to organizational ecology (“why so many org’l forms?”), institutionalists (“why so similar?”) assert wide variation is eliminated as less-legitimate forms are starved for resources & political support.

The Old Institutionalists Institutionalists Thorstein Veblen, John Commons & Wesley Mitchell briefly dominated U.S. economics (1880-1910), but were eclipsed in the triumph of neoclassical orthodoxy & the rise of Keynesianism. Institutionalists stressed the historical, social, & institutional factors on which economic “laws” were contingent. Economic behaviors weren’t immutable but conditioned by changing historical influences, especially societal institutions which shaped individual actors’ beliefs and actions. In sociology, Talcott Parsons, Robert Merton & Philip Selznick promoted institutionalism. Selznick’s TVA and the Grass Roots (1949), studied how federal agency efforts to coopt support for its dam building back-fired, when local officials changed TVA’s goals to serve private interests. “Institutional commitments develop over time as the org confronts external constraints and pressures from its environment as well as changes in the composition of its personnel, their interests, and their informal relations.”

Myths & Ceremonies Orgs mirror societal conventions, playing lip-service to dominant values & norms. A loose-coupling occurs between org’l facades & operational cores, e.g., bureaucratic schools where classroom anarchy prevails. Organizational field members develop shared meaning systems, a consensus about desired qualities, values, and behaviors. Institutionalizing common understandings requires that “social processes, obligations, or actualities come to take on a rule-like status in social thought and action” (John Meyer & Brian Rowan 1977:341). Symbolic meanings are embedded into formal structures and routine practices permeating everyday org’l life. Institutionalized routines often exhibit faddish, ritualistic, ceremonial & mythic elements largely unrelated to rational efficiency or effectiveness (DMV “red tape,” UM cap-and-gown rites). Org’l structures & practices persist as traditional customs and habits, regardless of their rationality, but simply because plausible alternatives to traditions grow unthinkable. “In other words, institutionalized acts are done for no other reason than that is how things are done” (Pfeffer 1982:240).

Mechanisms of Isomorphism Citation classic by Paul DiMaggio & Woody Powell (1983) proposed three mechanisms generating isomorphic conformity (convergence around a single form), thereby reducing variation within industries & org’l fields. ☼ Coercive isomorphism stems from political influences and cultural expectations ☼ Mimesis arises in uncertainties leading to imitation of apparently successful forms  ☼ Normative pressures originate in occupational communities & professional assns Causal ambiguities about org’l performance – especially in government & nonprofit sectors, but even in business – promote a slavish mimicry in the diffusion & adoption of the hottest management fads & fashions: Taylorism, M-form, Human Relations, Matrix, Theory Z, TQM, ISO, BPR, etc. ad nauseum.

Three Pillars of Institutions Dick Scott defined institutions as “multifaceted, durable social structures, made up of symbolic elements, social activities, and material resources. … They are relatively resistant to change.” His typology comprised 3 pillars:   Regulative Normative Cultural-Cognitive Basis of compliance Expedience Social obligation Taken-for-grantedness Shared understanding Basis of order Regulative rules Binding expectations Constitutive schemes Mechanisms Coercive Mimetic Logic Instrumentality Appropriateness Orthodoxy Indicators Rules Laws Sanctions Certification Accreditation Common beliefs Shared logics of action Basis of legitimacy Legally sanctioned Morally governed Comprehensible Recognizable Culturally supported