Miles A. Zachary Taking Social Construction Seriously: Extending the Discursive Approach in Institutional Theory

About the Authors Nelson Phillips Namrata Malhotra Professor of Strategy and Organizational Behavior at Imperial College London Research Interests: Knowledge Management, Technology Strategy, Institutional Theory, Social Entrepreneurship, Management in Cultural Industries, and International Management Namrata Malhotra Faculty member at Tanaka Business School at Imperial College of London Research Interests: Organizational Change, especially within professional service organizations

Brief History of Institutionalism Early institutional works were based in the social construction of institutions “institutionalization involves the processes by which social processes, obligations, or actualities, come to take on a rulelike status in social thought and action” – Meyer & Rowan (1977: p.341) Berger & Luckmann (1967: p.54) referred to institutions as ‘shared typifications of habituated actions by types of actors’ constructed through social interaction Early institutional authors included: Berger & Luckmann, 1967; Meyer & Rowan, 1977 New Institutional Theorists include: DiMaggio & Powell, 1991

New Institutional Theory New institutional theory are critical of “rational-actor models” of organizations Replaced with alternative theory based on individual action, stressing: Unreflective, routine, taken-for-granted nature of humans Actors constituted themselves by institutions Resource dependencies

Criticisms of the New Institutional Perspective The authors main criticism involves a lack of definition; modern institutionalism revolves around a result rather than a process This lack of process creates a definitional problem (Zucker, 1991) ‘Taxonomic’ approach dominates modern institutionalism but ignores the process of institutionalization and the inherent meaning of institutions The authors point to the problematic nature of defining an institution based on its effects (mainly referring to isomorphism/resource dependency) The authors regard the process of institutionalization as paramount within institutional theory

Old v. New Institutional Theory Authors idea of the most significant differences between both involve the underlying conception of cognitive bases of institutionalized behavior Old: organizations are institutionalized when they are ‘infused with value’ as ends themselves (Selznick, 1957) New: the basis of institutions resides in the taken-for-granted scripts, rules, and classifications In general, there has been a shift from institutions and how they form to the effects of institutionalization

Social Construction Explains the creation and development of social phenomena within a social context Social construction of institutions has early philosophical roots (e.g., Veblen, 1909; Menger, 1871; Commons, 1924; Sumner, 1906) Menger (1871) acknowledged the importance of institutions, a social phenomenon Later, Selznick (1957: p.16) stated that to institutionalize is to ‘infuse with beyond the technical requirements of the task at hand’

Institutionalization From a social constructionist point of view, institutionalization is primarily cognitive Rules are not externally imposed, rather are a function of social institutional processes Their (the rules) broad acceptability makes them unavoidable Despite an explosion of literature regarding institutional theory, the definition and processes of institutions remains ambiguous

DiMaggio & Powell’s Three pillars Three (3) Pillars of Isomorphic Change within Institutions: Cognitive Normative Mimetic Authors critique this view of institutional change as a ‘distraction’ Regard institutionalization as a taken-for-granted process

Scott’s typology What comprises an institution? Regulatory- explicit regulatory processes—expedient and coercive action that is socially sanctioned Normative- norms shape behavior that is socially enforced Cultural-Cognative- based on early social constructionist thought—”the way we do things around here” An all-inclusive framework for institionalism

Scott’s Typology- the critique Author offers several problematic observations: Individual differences in the ontological background of each pillar is problematic in creating a unified theory of institutionalism The dynamics arising from the three pillars are fundamentally different Sanctions (as presented by Scott (1995)) would serve to deinstitutionalize rather than reinforce institutional norms; Berger and Luckman (1967) regard additional enforcement mechanisms as a sign of less-than-institutional status

The Discursive Alternative Authors offer an alternative to Scott’s (1995) explanation of institutionalism A discursive approach is “a useful theoretical and methodological approach for understanding microprocesses of institutionalization at the macro-organizational level and clarifies the cognitive nature of institutions”

The discursive alternative Discursive analysis serves to answer the question ‘where does meaning come from?’ Furthermore, it is a study of discourse and the social reality it constitutes Can never be identified in its entirety, rather it exists on a continuum Texts (which are not limited to written words) are not individually meaningful

The discursive alternative Discourse has a dialectic effect on action in which both are a function of the previous variable (t-n)

The Discursive Alternative Authors ask “what are the ramifications for institutional theory?” Changing the focus of empirical research Refocuses the processes of institutionalization itself Reframing the symbolic v. practice debate Discourse analysis allows a tandem view of institutionalization—both practice and symbolic Bringing society back into the picture Focuses on complex societal nature of institutions and institutionalization

OT questions Why do organizations exist? Why are firms the same/different? What causes changes in organizations? Why do some firms survive and others don’t? Emerging issue?