The Response of Organizations to their Environments

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The Response of Organizations to their
Environments

• And the changing contexts of Institutional Theory

Tracy Alberry EDU 730 Spring 2009
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Key Terms

• New Institutionalism
• Structuralism
• Legitimacy
• Isomorphism

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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/new-institution
  alism

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Meyer and Rowan

• Describes how todays 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 organizations
  successin hopes that they too will succeed.

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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)

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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?
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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.

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Isomorphism

• Do we see isomorphism in current trends in
  education?
• What are some examples?

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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).

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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.

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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.

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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 organizations
  activities fit together (Meyer and Rowan, 1991).

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Scott-Distinction between Institutional and
Technical

• Technical Environments
• Exercise output control over organizations-rewards
  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
• (Scott, p. 167)

Most organizations have both. Seems to be a new
cultural emphasis.
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Legitimacy

• Legitimacy is the way organizations claim
  societal values. Organizations deal actively and
  strategically with their environments. Their goal
  is to gain legitimacy.

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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.

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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

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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.

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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

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Imposition
Imposition describes the situation when
environmental agents exist that have sufficient
power to impose structural forms on subordinate
organizational unit.
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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.

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Inducement

• In this scenario inducement mechanisms emerge
  whereby environments provide incentives (e.g.
  funding) to organizations that comply with the
  environmental agents demands.

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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.

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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.

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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.

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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)

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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.

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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.

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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.