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Institutions are social structures that are constructed by humans to provide stability and meaning to life. They are the “rules of the game” (North, 1990) that both enable and constrain human behavior. In economics, institutionalism emerged at the end of the nineteenth century in reaction to the assumptions of methodological individualism that viewed human beings as rational, utility maximizing, and atomized. Some of the “old” institutional economists--Veblen, Mitchell, Ayres--were primarily interested in the emergence and diffusion of “taken for granted” customs and habits, while others such as Commons focused on social movements (e.g., labor unionization and monopoly busting) and examined how institutional working rules are created to address disputes and injustices among parties and classes with unequal power and diverse interests.
In the last quarter of the 20th century, a new school of institutionalism emerged among organizational sociologists to address questions of how and why organizations adopt similar institutional arrangements. Powell and DiMaggio (1991) note that this new institutionalism was built on the foundation laid by the “cognitive revolution” in sociology and social construction theory (Berger & Luckmann, 1967). It viewed institutionalization as a collective framing process that treats rules, values, and conflict as peripheral and less important than cognitive processes. The new institutionalists viewed the social construction of scripts, norms, and classifications as the “stuff of which institutions are made” (Powell & DiMaggio, 1991, p.15). Some also adopted a population-level evolutionary approach that marginalized the purposive actions and frames of divergent interest groups in changing institutions. As we shall see, some neoinstitutional scholars have begun to address this shortcoming by examining the interplay between structural determinism and individual agency.
Prof. Van de Ven’s slides class slides on institutional theory
Required Readings
Scott (2001) Institutions and Organizations, Second edition, Chpts. 3 & 4, pp. 47-90.
Meyer & Rowan (1977) “Institutionalized Orgs.: Formal Structure as Myth and Ceremony,” AJS, 83: 340-363.
DiMaggio & Powell (1983) “The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields,” ASR, 48: 147-160.
Greenwood & Suddaby (2006) “Institutional entrepreneurship in mature fields: The big five accounting firms,” AMJ, 49:27-48.
Van de Ven & Lifschitz (2009) “John R. Commons: Back to the future of org. studies,” Chpt 23, pp. 510-534 in Adler op.cit.
Supplementary Readings
Commons (1950) “The Economics of Collective Action,” NY: MacMillan, Chpt iii, pp. 43-57.
North (1990) “Institutions, Institutional Change and Economic Perf.,” NY: Cambridge, pp. 3-26 & 73-104.
Oliver (1991) “Strategic Responses to Institutional Processes,” AMR, 16: 145-179.
Leblebici, Salancik, Copay, & Ting (1991) “Inst. Change and Transform. Of Interorg. Fields,” ASQ, 36: 333-63.
Powell & DiMaggio (1991) "The New Institutionalism in Organizational Analysis," Chicago Press, Chpt. 1.
Fligstein (1996) “Markets as Politics: A Political-Cultural Approach to Market Institutions,” ASR, 61: 228-244.
Kraatz & Zajac (1996) “Exploring the Limits of the New Institutionalism: The causes and consequences of illegitimate organizational change,” ASR, 61: 812-836.
Barley & Tolbert (1997) “Institutionalization and Structuration: Studying the Links between Action and Institution,” OS 18, 1: 93-117.
Westphal, Gulati, & Shortell (1997) “Customization or Conformity? …TQM Adoption," ASQ, 42: 366-394.
Haveman & Rao (1997) “Structuring a Theory of Moral Sentiments: Institutional and Organizational Coevolution in the Early Thrift Industry,” AJS, 102: 1606-1651.
Stinchcombe (1997) “On the Virtues of the Old Institutionalism,” Annu Rev. Sociol. 23: 1-18.
Dobbin (1998) The strength of a weak state: The rights revolution and the rise of HRM”. AJS, 104 (2): 441-476.
Galaskiewicz (1997) “An Urban Grants Economy Revisited: Corporate Charitable Contributions in the Twin Cities, 1979-81, 1987-89,” ASQ, 42: 445-471.
Hirsch & Lounsbury (1997) “Ending the family quarrel,” Amer Behavioral Scientist, 40, 4:406-418
Schneiberg & Clemens (2006) “The typical tools for the job: Research strategies in institutional analysis,” Sociological Theory, 24:195-227.
Greenwood, Oliver, Suddaby & Sahlin (Eds.) (2008) “Introduction to Sage Handbook of Organizational Institutionalism,” pp. 1-46.
Jarzabkowski, Matthiesen, & Van de Ven (2009) “Doing Which Work? A Practice Approach to Institutional Pluralism” Chpt 11 in Lawrence Suddaby & Leca (Eds.) Institutional Work, Cambridge Univ. Press.
Hargrave & Van de Ven (2009) “Institutional work as the creative embrace of Contradiction” Chpt 5 in Lawrence, Suddaby & Leca (Eds.) Institutional Work, Cambridge Univ. Press.
Suddaby, Elsbach, Greenwood, Meyer & Zilber, (2010), “Organizations and their institutional environments – bringing meaning, values, and culture back in: Introduction to the special research forum,” AMJ, 53: 1234-1240.
Creed, DeJordy & Lok (2010), “Being the change: Resolving institutional contradiction through identity work,” AMJ: 1336-1364.
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