Strategic management of an organization’s institutional environment requires an understanding of isomorphism. Hawley (1968) defined isomorphism as a constraining process that forces one unit in a population to resemble other units that face the same set of environmental conditions. With their path breaking analysis of environmental effects on organization structure, Meyer and Rowan (1977) first applied the term isomorphism to institutions. DiMaggio and Powell (1983) elaborated the concept in their influential theory of institutional isomorphism in organizational fields.
Scholars who study entrepreneurship have lent great value by exploring the factors that explain how entrepreneurs create new businesses and thus, how societies and economies grow and prosper. Although there has considerable research based on psychological and economic approaches to entrepreneurship, the influence of socio-cultural factors on enterprise development remains under studied. Therefore, the aim of this paper is to integrate, from a theoretical perspective, the socio-cultural factors and entrepreneurial activity. In this sense, the article points out that the institutional approach could be an apt framework to develop future research analyzing the socio-cultural factors that influence the decisions to create new businesses. Also, a brief overview of the content of each of the papers included in this special issue is presented.
In this chapter, I suggest that whatever form new theorizing will take, a good way to conduct such research and for organization and management studies to remain a vital segment of the social sciences is to examine and consider building on the foundations of the classics. To support this argument, I sketch three mini-cases to illustrate how the classics have been used to develop cumulative research programs (Berger 1993).
The phrase, ‘institutional logic’ has become somewhat of a buzz-word. Buzz words are over used; as a result their meanings often get distorted and overextended and they burn-out of existence. Mizruchi and Fein (1999) showed in the institutional theory literature how meanings get distorted and then taken for granted. To avoid misunderstandings of the institutional logic concept and to build on research in this genre, now is the time to reflect on definitions and the theoretical and methodological contributions this perspective brings to the analysis of institutions.
Institutional Logics and Institutional Change in Organizations: Transformation in Accounting, Architecture, and Publishing
We contribute to the literature on institutional and organizational change by integrating two related areas of study: the theory and methods of analysis informed by the research on institutional logics and historicalevent sequencing. Institutional logics provide the theory to understand how the content of culture influences organizational change; historicalevent sequencing reveals the underlying patterns of cultural transformation. We apply this dual perspective to the cases of institutional stability and change in organizational governance in three industries: accounting, architecture, and higher-education publishing. Research on governance has focused on changes in organizational design between markets, hierarchies, and networks. Missing from this research is an understanding of how institutions at the wider societal level motivate organizations to adopt one of these governance forms over another. We examine how the governance of firms in these industries has been influenced by the institutional logics of the professions, the market, the state, and the corporation by focusing on three mechanisms – institutional entrepreneurs, structural overlap, and historical-event sequencing. Overall, our findings reveal how accounting was influenced by state regulation producing a punctuated equilibrium model, architecture by professional duality producing a cyclical model, and publishing by market rationalization producing an evolutionary model of institutional change in organizational governance.
This study tests a theory of how a craft- and profession-based industry adopted multidivisional organization, examining higher education puhlishing from 1958 through 1990. I combined interviews and historical analysis to identify two institutional logics, an editorial and a market logic. Hazard rate models of differences in the effects of these logics showed a decrease in the importance of professional determinants of organization structure and an increase in the salience of its market determinants. The covariates explaining the rate at which firms divisionalized changed as a consequence of their strategic and structural conformity with the prevailing institutional logic.
Personal Versus Market Logics of Control: A Historically Contigent Theory of the Risk of Acquisition
This paper develops and tests a theory of the historical contingency of the risk of acquisition using data from the higher education publishing market from 1958-1990. Interviews and historical analyses are combined to identify two forms of capitalism–personal and market, and in particular to publishing, to identify the institutional logics identified with each form of capitalism (an editorial and a market logic). Hazard-rate models are used to test for differences in the effects of these two logics on the organization and market determinants of acquisition. Publishers with relational network forms of organization in production and distribution were at higher risk of acquisition in the market period but not in the editorial period. Competition in the product market increased the risk of acquisition in the market period, but not the editorial period. The covariants explaining the risk of acquisition change as a consequence of the evolution of capitalism and as a result of a firm’s strategic and structural conformity with the institutional logic of the prevailing form of capitalism.
Institutional Logics and the Historical Contigency of Power in Organizations: Executive Succession in the Higher Education Publishing Industry, 1958-1990
This article examines the historical contingency of executive power and succession in the higher education publishing industry. We combine interview data with historical analysis to identify how institutional logics changed from an editorial to a market focus. Event history models are used to test for differences in the effects of these two institutional logics on the positional, relational, and economic determinants of executive succession. The quantitative findings indicate that a shift in logics led to different determinants of executive succession. Under an editorial logic, executive attention is directed to author-editor relationships and internal growth, and executive succession is determined by organization size and structure. Under a market logic, executive attention is directed to issues of resource competition and acquisition growth, and executive succession is determined by the product market and the market for corporate control.
Recent research on entrepreneurship by sociologists has focused on subsectors of the discipline rather than on entrepreneurship as a class. This review draws insights from diverse literatures to develop a sociological perspective on entrepreneurship as a whole. Until recently, the supply-side perspective, which focuses on the individual traits of entrepreneurs, has been the dominant school of research. Newer work from the demand-side perspective has focused on rates, or the context in which entrepreneurship occurs. This review emphasizes this less developed demand-side perspectivein particular, the influence of firms and markets on how, where, and why new enterprises are founded. I take stock of the differences and separation in the two perspectives and argue that sociological frameworks, an embeddedness perspective, institutional and ecological theory, and multilevel models can be used to integrate the two schools and extend their research implications.
An important but under theorized issue in organization research concerns how to partition the universe of organizations into subsets suitable for theoretical and empirical analysis. To shed light on the boundary problem we review and synthesize seven organization theories and present a case study of the college publishing industry.
Focusing on professional knowledge and occupations and drawing on institutional, resource dependence, and ecological theories, reasons why psychiatric nomenclature has changed are postulated. The effects that these changes may have on the division of labor among mental health professionals and organizational forms of service delivery are conceptualized. Through the development and control of knowledge and belief systems, professions gain power by resituating whose professional competence becomes most relevant. In highly institutional environments such as mental health setting, where etiology, technology, and outcomes can be intangible and unclear, attempts to standardize rules of classification and practice according to a scientific model of medicine reduce uncertainty and enhance professional and organizational legitimacy. With increasing pressure to rationalize health care, diagnoses can be viewed as resource and a commodity that administrators negotiate with funding environments and regulatory agencies. Treatment organizations operating in conflicting institutional environments will “decouple” their research, clinical, and administrative organizational structures.