The Response of Organizations
to their Environments
And the changing contexts of
Institutional Theory
Tracy Alberry
EDU 730
Spring 2009
Key Terms
•
•
•
•
New Institutionalism
Structuralism
Legitimacy
Isomorphism
New institutionalism or
neoinstitutionalism
• “describes social theory that focuses on developing a
sociological view of institutions--the way they interact
and the way they affect society. It provides a way of
viewing institutions outside of the traditional views of
economics by explaining why so many businesses end
up having the same organizational structure
(isomorphism) even though they evolved in different
ways, and how institutions shape the behavior of
individual members.”
From: http://www.answers.com/topic/newinstitutionalism
Meyer and Rowan
•Describes how today’s formal structure of
organizations reflects the “myths” of the institutional
environment rather than the “demands of work
•Meyer and Rowan explain that organizations
incorporate the practices and procedures defined by
rationalized concepts to increase their legitimacy.
• Organizations adopt the practices and procedures employed
by successful organizations – assumed to be rational based
on another organization’s success–in hopes that they too will
succeed.
THE IRON CAGE REVISITED: INSTITUTIONAL
ISOMORPHISM AND COLLECTIVE RATIONALITY
IN ORGANIZATIONAL FIELDS
• “Structural change in organizations is less driven by
competition or efficiency. Rather, bureaucratization
and organizational change occur as the result of
processes that make organizations more similar
without necessarily making them more efficient.
Bureaucratization and other forms of homogenization
emerge, we argue, out of the structuration (Giddens,
1979)” DiMaggio & Powell (1983)
Scott would argue that organizations become similar in
hopes of becoming as successful as other
organizations.
Organizations choose structures that will make them
more acceptable to the culture or society.(legitimacy)
THE IRON CAGE REVISITED: INSTITUTIONAL
ISOMORPHISM AND COLLECTIVE RATIONALITY IN
ORGANIZATIONAL FIELDS
Structuration consists of four parts:
• an increase in the extent of interaction among organizations
in the field;
• the emergence of sharply defined interorganizational
structures of domination and patterns of coalition;
• an increase in the information load with which organizations
in a field must contend;
• and the development of a mutual awareness among
participants in a set of organizations that they are Involved
in a common enterprise (DiMaggio, 1982).
Do we see structuration in Education?
Isomorphism from
Dimaggio & Powell (1983)
• Isomorphism is a "constraining process that
forces one unit in a population to resemble other
units that face the same set of environmental
conditions". " There are two types of ismorphism:
competitive and institutional, "Organizations
compete not just for resources and customers,
but for political power and institutional
legitimacy, for social as well as economic fitness".
• If there is uncertainty, some organizations may
try to imitate or model other organizations.
Isomorphism
• Do we see isomorphism in current trends in
education?
• What are some examples?
INSTITUTIONAL THEORY ACCORDING
TO SCOTT
• Institutional theory is related to the aspects of social
structure. “It considers the processes by which
structures, including schemas, rules, norms, and
routines, become established as authoritative
guidelines for social behavior. It inquires into how
these elements are created, diffused, adopted, and
adapted over space and time; and how they fall into
decline and disuse. Although the ostensible subject is
stability and order in social life, students of institutions
must attend not just to consensus and conformity but
to conflict and change in social structures” (Scott , p. 1,
2004).
ORGANIZATIONS SOCIALLY
CONSTRUCTED
• According to Scott, in an unpublished paper
by Meyer, Meyer (1970) suggested that much
social order is a product of social norms and
rules that constitute particular types of actors
and specify ways in which they can take
action. Such behaviors are not so much
socially influenced as socially constructed. Pg
5.
W. Richard Scott, "Unpacking
Institutional Arguments"
• Scott focuses on the importance of
environments and the importance of different
cultures and the roles those play in
organizations. Scott sees organizations as
having not just one but multiple
environments. These environments affect an
organizations forms and functions.
Scott pulls from the work of Meyer
and Rowan
• Formal Structures: blueprints of the
organizations activities such as listing of
offices, departments and programs linked by
explicit goals and policies that make up the
rational theory of how all the organization’s
activities fit together (Meyer and Rowan,
1991).
Scott-Distinction between
Institutional and Technical
Technical Environments
• Exercise output control
over organizationsrewards for effective
and efficient control of
the work process
(service or process)
• Complex technologies
• exchanges
Institutional Environments
• reward organizations for
implementing the correct
structures and processes
• Rules
• Socially defined
categories
Most organizations have both. Seems to be a “new cultural emphasis”.
(Scott, p. 167)
Legitimacy
• Legitimacy is the way organizations claim
societal values. Organizations deal actively
and strategically with their environments.
Their goal is to gain legitimacy.
Legitimacy
• Legitimacy is the societal evaluations of
organizational goals.
• Explaining or justifying the means to an end.
• Meyer and Scott (1983) organizational
legitimacy refers to the degree of cultural
support for an organization.
Scott specifically:
This article examines
• how institutional environments affect
organizational focus and functions.
• It examines causal arguments being made.
• How cultural and structural elements in
environments affect an organization
• Creates the argument between new and old
institutional theories
Old vs. New
• Scott seems to be presenting the new
institutional theory versus the old
• Selznick (1996) summarizes - maybe the old
and new theories of institutional
environments are not so far apart.
• He warns that if you differentiate between the
old and the new, it may affect the contribution
of institutional theory to major issues of
bureaucracy and social policy.
Scott presents seven arguments to explain the
ways environments affect organizations.
•
•
•
•
•
•
•
The Imposition of Organizational Structure
The Authorization of Organizational Structure
The Inducement of Organizational Structure
The Acquisition of Organizational Structure
The Imprinting of Organizational Structure
The Incorporation of Environmental Structure
The Bypassing of Organizational Structure
Imposition
Imposition describes the situation when
environmental agents exist that have
sufficient power to impose structural
forms on subordinate organizational unit.
Authorization
• authorization, differs because the
subordinate unit is not compelled to
conform to the environmental demand
but does so voluntarily in order to
receive legitimating. Some environments
do not have agents with the power
and/or authority to impose
organizational change.
Inducement
• In this scenario inducement mechanisms
emerge whereby environments provide
incentives (e.g. funding) to organizations that
comply with the environmental agents’
demands.
Acquisition
• The deliberate choosing of structural models
by organizational actors.
• The adoption of institutional designs in order
to be more modern, appropriate or rational.
• Voluntary adoption of structural patterns.
Imprinting
• In some situations imprinting occurs where
the structure of the organization follows the
basic logic common to most organizations in
the same environment at the time of the
organizations founding.
Incorporation
Incorporation refers to the tendency of organizations
to have things happen that may not be intended.
The more complex the environmental elements the
greater the administrative complexity and the less
program coherence.
Bypassing
• Bypassing occurs when institutionally shared
beliefs, rather than organizational structure,
determine actions.
• Orderliness and coherence in American
schools is based on institutionally shared
beliefs rather than organizational structures
(Meyer, Scott and Deal, 1981)
Scott Summary
• Scott shows us that organizations face many
types of organizational structures that are
affected by cultural systems. He seems to
argue that organizations may have some
choice in selecting the cultural “systems with
which to connect”.
• The seven mechanisms/arguments presented
should be further examined in relation to
developing institutional theory.
References
• DiMaggio, P. J., & Powell, W. W. (1983). The iron
cage revisited: Institutional isomorphism and
collective rationality in organizational fields.
American Sociological Review, 48(2), 147-160.
• Meyer, J. & Rowan, B. (1991) Institutionalized
organizations: Formal structure as myth
and ceremony. In Powell & Dimaggio, The new
institutionalism in organizational analysis, 63-75.
References
• Scott, W. Richard. (1991). "Unpacking
institutional arguments." Pp. 164-182 (Ch. 7) )
in Walter W. Powell and Paul J. DiMaggio
(Eds.), The New Institutionalism in
Organizational Analysis. Chicago: The
University of Chicago Press.
• Selznick, P. (1996). Institutionalism "Old" and
"New". Administrative Science Quarterly,
41(2), 270-277.