Institutional theory

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Institutional theory



Alternate name(s)

Institutionalism, New Institutional Theory

Main dependent construct(s)/factor(s)

Institutional emergence, conformity, conflict, change, isomorphism

Main independent construct(s)/factor(s)

Processes which establish schemas, rules, norms and routines

Concise description of theory

Institutional theory attends to the deeper and more resilient 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 perforce attend not just to consensus and conformity but to conflict and change in social structures.

Source: Scott, W. Richard 2004. “Institutional theory” P408-14 in Encyclopedia of Social Theory, George Ritzer, ed. Thousand Oaks, CA: Sage.

A. Defining ’institutions’ … there is no single and universally agreed definition of an ’institution’ in the institutional school of thought... Scott (1995:33, 2001:48) asserts that ”Institutions are social structures that have attained a high degree of resilience. [They] are composed of cultural-cognitive, normative, and regulative elements that, together with associated activities and resources, provide stability and meaning to social life. Institutions are transmitted by various types of carriers, including symbolic systems, relational systems, routines, and artifacts. Institutions operate at different levels of jurisdiction, from the world system to localized interpersonal relationships. Institutions by definition connote stability but are subject to change processes, both incremental and discontinuous”… Powell and DiMaggio (1991:8) shed light on the meaning of ’institutions’ by offering a definition of the (neo-)institutional field: ”The new institutionalism in organization theory and sociology comprises a rejection of rational-actor models, an interest in institutions as independent variables, a turn toward cognitive and cultural explanations, and an interest in properties of supra-individual units of analysis that cannot be reduced to aggregations or direct consequences of individuals’ attributes or motives”.

B. Enactment and (re-)production of institutions These social structures (mentioned above) are both imposed on and upheld by the actors (e.g. an individual, an organisation, etc.) behaviour.... One cognitively oriented view is that a given institution is encoded into an actor through a socialization process. When internalized, it transforms to a script (patterned behavior). When (or if) the actor behaves according to the script, the institution is enacted. In this manner, institutions are continuously (re-)produced. The enactment of an institution externalizes or objectifies it - other actors can see that the institution is in play, and a new round of socialization starts. After some time, the institution (and the resulting patterned behaviour) becomes sedimented and taken for-granted. Then, it might be difficult for the actors even to realize that their behaviour is in fact partly controlled by an institution. Acting in accordance with the institution is viewed as rational by those who share the institution.

Source: Fredrik Bjorck. "Institutional Theory: A New Perspective for Research into IS/IT Security in Organisations," HICSS, p. 70186b, Proceedings of the 37th Annual Hawaii International Conference on System Sciences (HICSS'04) - Track 7, 2004

Diagram/schematic of theory

Theory element Regulative Normative Cognitive
Basis of compliance Expedience Social Obligation Taken for granted
Mechanisms Coercive Normative Mimetic
Logic Instrumentality Appropriateness Orthodoxy
Indicators Rules, laws, sanctions Certification, accreditation Prevalence, isomorphism
Basis of legitimacy Legally sanctioned Morally governed Culturally supported, conceptually correct

Three Pillars of Institutions

Source: Source: Scott, W. R. (1995). Institutions and Organizations. Thousand Oaks, CA, Sage

Originating author(s)

Philip Selznick, Paul J. DiMaggio, Walter W. Powell, W. Richard Scott, Lynne G. Zucker

Seminal articles

Selznick, P. (1948). Foundations of the Theory of Organizations. American Sociological Review 13: 25-35

Selznick, P. (1949) TVA and the Grass Roots. University of California Press, Berkley, CA.

Selznick, P. (1957) Leadership in Administration, A Sociological Interpretation New York: Harper & Row.

Selznick, P. (1969) Law, Society and Industrial justice, New York: Russel Sage Foundation.

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.

Oliver, C. (1991). Strategic Responses to Institutional Processes, Academy of Management Review, Vol. 16, 191: pp.145-179.

Powell, W. W. & Dimaggio, P. J. (1991). The new institutionalism in organizational analysis. Chicago, University of Chicago Press.

Scott, W. R. (1987). The adolescence of institutional theory. Administrative Science Quarterly, 32(4), 493

Scott, W. R. (1995 and 2001). Institutions and Organizations. Thousand Oaks, CA, Sage

Originating area

Sociology, Industrial Psychology, Organizational Theory, Organizational Behavior

Level of analysis

Group, firm, industry

IS articles that use the theory

Adler, P. S. (2005). The evolving object of software development. Organization, 12(3), 401.

Aguila, A. R. d., Bruque, S., & Padilla, A. (2002). Global information technology management and organizational analysis: Research issues. Journal of Global Information Technology Management, 5(4), 18.

Alvarez, R. (2001). "It was a great system": Face-work and the discursive construction of technology during information systems development. Information Technology & People, 14(4), 385.

Avgerou, C. (2000). IT and organizational change: An institutionalist perspective. Information Technology & People, 13(4), 234.

Bada, A. O., Aniebonam, M. C., & Owei, V. (2004). Institutional pressures as sources of improvisations: A case study from a developing country context. Journal of Global Information Technology Management, 7(3), 27.

Baptista , J. (2009). Institutionalisation as a process of interplay between technology and its organisational context of use. Journal Of Information Technology, 24(4): 305-320.

Barley, S. R. (1986). Technology as an occasion for structuring: Evidence from observations of CT scanners and the social order of radiology departments. Administrative Science Quarterly, 31(1), 78.

Barley, S. R., & Tolbert, P. S. (1997). Institutionalization and structuration: Studying the links between action and institution. Organization Studies (Walter De Gruyter GmbH & Co.KG.), 18(1), 93.

Bharati, P., Zhang, C., and Chaudhury, A. (Forthcoming), “Social Media Assimilation in Firms: Investigating the Roles of Absorptive Capacity and Institutional Pressures,” Information Systems Frontiers, Springer.

Bharati, P. and Chaudhury, A. (2012), “Technology Assimilation Across the Value Chain: An Empirical Study of Small and Medium-Sized Enterprises,” Information Resources Management Journal, 25(1), pp. 38-60, January-March.

Boudreau, Marie-Claude, & Robey, Daniel. (1996). Coping with contradictions in business process re-engineering. Information Technology & People, 9(4), 40.

Butler, T. (2003). An institutional perspective on developing and implementing intranet- and internet-based information systems. Information Systems Journal, 13(3), 209-231.

Cannon, A. R., & Woszczynski, A. B. (2002). Crises and revolutions in information technology: Lessons learned from Y2K. Industrial Management + Data Systems, 102(5/6), 318.

Chatterjee, D., Grewal, R., & Sambamurthy, V. (2002). Shaping up for E-commerce: Institutional enablers of the organizational assimilation of web technologies. MIS Quarterly, 26(2), 65.

Cukier, W., Shortt, D., & Devine, I. (2002). ISECON 2001 best paper award winner--gender and information technology: Implications of definitions. Journal of Information Systems Education, 13(1), 7.

Currie, W. L. (2004). The organizing vision of application service provision: A process-oriented analysis. Information & Organization, 14(4), 237-267.

Dibbern, J., Goles, T., Hirschheim, R., & Jayatilaka, B. (2004). Information systems outsourcing: A survey and analysis of the literature. Database for Advances in Information Systems, 35(4), 6.

Doh, J. P., Teegen, H., & Mudambi, R. (2004). Balancing private and state ownership in emerging markets' telecommunications infrastructure: Country, industry, and firm influences. Journal of International Business Studies, 35(3), 233.

Gibbs, J. L., & Kraemer, K. L. (2004). A cross-country investigation of the determinants of scope of E-commerce use: An institutional approach. Electronic Markets, 14(2), 124-137.

Hedman, J., & Borell, A. (2004). Narratives in ERP systems evaluation. Journal of Enterprise Information Management, 17(4), 283.

Jarvenpaa, L, S., & Leidner, E, D. (1998). An information company in mexico extending the resource-based view of the firm to a developing country context. Information Systems Research, 9(4), 342.

King, J. L., Gurbaxani, V., Kraemer, K. L., McFarlan, F. W., Raman, K. S., & Yap, C. S. (1994). Institutional factors in information technology innovation. Information Systems Research, 5(2), 139-169.

Kinsella, W. J. (2005). Rhetoric, action, and agency in institutionalized science and technology. Technical Communication Quarterly, 14(3), 303.

Kling, R. (1980). Social analyses of computing: Theoretical perspectives in recent empirical research. ACM Computing Surveys, 12(1), 61-110.

Lamb, R., & Davidson, E. (2005). Understanding intranets in the context of end-user computing. Database for Advances in Information Systems, 36(1), 64.

Lamb, R., King, J. L., & Kling, R. (2003). Informational environments: Organizational contexts of online information use. Journal of the American Society for Information Science and Technology, 54(2), 97.

Lamb, R., & Kling, R. (2003). Reconceptualizing users as social actors in information systems research1. MIS Quarterly, 27(2), 197.

Laudon, K. C., & King, R. (1985). Environmental and institutional modes of system development: A national criminal history system. Communications of the ACM, 28(7), 728.

Lawrence, C. (2003). Institutions and organizations (2nd ed.). Information Technology & People, 16(3), 374.

Lucas, L. M., & Ogilvie, D. (2005). The evolution of organisations' search strategies for knowledge. International Journal of Information Technology & Management, 4(3), 1-1.

Lynskey, M. J. (2004). Knowledge. finance and human capital: The role of social institutional variables on entrepreneurship in japan. Industry and Innovation, 11(4), 373.

Markus, M. L., & Robey, D. (1988). Information technology and organizational change: Causal structure in theory and research. Management Science, 34(5), 583-598.

Nicolaou, A. I. (1999). Social control in information systems development. Information Technology & People, 12(2), 130.

Orlikowski, W. J. (1992). The duality of technology: Rethinking the concept of technology in organizations. Organization Science: A Journal of the Institute of Management Sciences, 3(3), 398-427.

Orlikowski, W. J., & Barley, S. R. (2001). Technology and institutions: What can research on information technology and research on organizations learn from each other? MIS Quarterly, 25(2), 145.

Orlikowski, W., & Robey, D. (1991). Information technology and the structuring of organizations. Information Systems Research, 2(2), 143-169.

Premkumar, G., K. Ramamurthy, and M. Crum. (1997). Determinants of EDI Adoption in the Transportation Industry. European Journal of Information Systems, 6, 107-121.

Ramiller, N. C. (2003). Information systems and global diversity. Information Technology & People, 16(2), 235.

Reimers, K. (2003). Developing sustainable B2B E-commerce scenarios in the Chinese context: A research proposal. Electronic Markets, 13(4), 261-270.

Robey, D., & Boudreau, M. (1999). Accounting for the contradictory organizational consequences of information technology: Theoretical directions and methodological implications. Information Systems Research, 10(2), 167-185.

Robey, D., & Holmstrom, J. (2001). Transforming municipal governance in global context: A case study of the dialectics of social change. Journal of Global Information Technology Management, 4(4), 19.

Robey, Daniel, & Boudreau, Marie-Claude. (1999). Accounting for the contradictory organizational consequences of information technology: Theoretical directions and methodological implications. Information Systems Research, 10(2), 167.

Sahay, S. (2003). Information systems and global diversity. Information Technology & People, 16(2), 240.

Silva, L., & B, Eugenio Figueroa. (2002). Institutional intervention and the expansion of ICTs in latin america: The case of chile. Information Technology & People, 15(1), 8.

Swanson, E. B., & Ramiller, N. C. (2004). Innovating mindfully with information Technology1. MIS Quarterly, 28(4), 553.

Teo, H. H., Wei, K. K., & Benbasat, I. (2003). Predicting intention to adopt interorganizational linkages: An institutional perspective. MIS Quarterly, 27(1), 19-49.

Tillquist, J., King, J. L., & Woo, C. (2002). A representational scheme for analyzing information technology and organizational dependency. MIS Quarterly, 26(2), 91.

Tingling, P. M. and M. Parent (2002). "Mimetic Isomorphism & Technology Evaluation: Does Imitation Transcend Judgment?" Journal for the Association of Information Systems 3,5: 113-143.

Ulhøi, J. P. (2004). Open source development: A hybrid in innovation and management theory. Management Decision, 42(9), 1095.

Umanath, S, N., & Campbell, L, T. (1994). Differential diffusion of information systems technology in multinational enterprises: A research model. Information Resources Management Journal, 7(1), 6.

Wang, S., & Cheung, W. (2004). E-business adoption by travel agencies: Prime candidates for mobile e-business. International Journal of Electronic Commerce, 8(3), 43-63.

Wareham, J. (2002). Anthropologies of Information Costs: Expanding the Neo-Institutional View, Information and Organization 12(4), 219

Watson, H. J., Abraham, D. L., Chen, D., Preston, D., & Thomas, D. (2004). Data warehousing ROI: Justifying and assessing a data warehouse. Business Intelligence Journal, 9(2), 6.

Wu, F., Mahajan, V., & Balasubramanian, S. (2003). An analysis of e-business adoption and its impact on business performance. Academy of Marketing Science.Journal, 31(4), 425.

Links from this theory to other theories

Transaction cost economics, Resource dependency theory, Evolutionary theory, historical institutionalism, organization culture and identity, population ecology, and traditional- and neo-institutional sociology.

External links, Chapter prepared by Scott W. R. for Great Minds in Management: The Process of Theory Development, Ken G. Smith and Michael A. Hitt, eds. Oxford UK: Oxford University Press , Institute for Social Science Research, University of California, Los Angeles, Jan Chong web site, Encyclopedia of Organizationa Theory - Babson College

Original Contributor(s)

Hossam Ali-Hassan

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