New Institutional Theory

New Institutional Theory

HISTORY

Comparison between the Old and New Institutionalism

The structure of Educational Organizations

(Meyer and Rowan 1978)

Reflections

- Schools serve societal needs -> meet expectations -> gain resources and legitimacy

Important concepts:

- Corporate society

- Bureaucratic organizations

- Decoupling

- Credentialing

- Theoretical background

Source: The New Institutionalism in Organizational Analysis, Powell and DiMaggio,

editors, Chicago: University of Chicago Press, 1991.

Previous theories -> institutions can influence individuals to act in one of two ways:

1) they can cause individuals within institutions to maximize benefits (regulative institutions, called (Rational Choice Institutionalism, rational choice theory);

2) to act out of duty or an awareness of what one is "supposed" to do (normative institutions, also called Historical Institutionalism).

Much of New Institutionalism: deals w/ pervasive influence of institutions on human behavior through rules, norms, and other frameworks.

New institutionalism context: was born out of a reaction to the behavioural revolution. In viewing institutions more widely as social constructs, and by taking into account the influence that institutions have on individual preferences and actions, new institutionalism has moved away from its institutional (formal legal descriptive historical) roots and become a more explanatory discipline within politics.

An important contribution of New institutionalism was to add a cognitive type influence. This perspective adds that, instead of acting under rules or based on obligation, individuals act because of conceptions. "Compliance occurs in many circumstances because other types of behavior are inconceivable; routines are followed because they are taken for granted as 'the way we do these things'" (Scott 2001, p. 57)

New institutionalism

'Old' institutionalism, focused on analysing the formal institutions of govt. and the state in comparative perspective.

After the behavioural revolution, the focus on institutions was discarded as it was too narrow.

The focus then moved to analysing the individual rather than the institutions which surrounded him/her.

New institutionalism is a 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

Sources

Powell, Walter and DiMaggio, Paul J. 1991. The New Institutionalism in Organizational Analysis, Chicago: University of Chicago Press.

Scott, Richard W. 2001. Institutions and Organizations, 2nd ed. Thousand Oaks: Sage Publications.

New institutionalism explained:

http://everything.explained.today/New_institutionalism/

DiMaggio, Paul J., and Walter Powell. 1983. "The iron cage revisited: institutional

isomorphism and collective rationality." American Sociological Review 42 (2):147-160.

Meyer, John W., and Brain Rowan. 1977. "Institutionalized organizations: formal

structure as myths and ceremony." American Journal of Sociology 83 (2):340-63.

Meyer, John W., and Brian Rowan. 1978. "The structure of educational organizations."

In Environments and organizations, edited by John W. Meyer, 78-109. San Francisco:

Jossey-Bass.

The concept of Isomorphism

THANK YOU!

Isomorphism and homogenous similarity in institutions

Organizational predictors of isomorphic change (DiMaggio & Powell, 1983)

• DiMaggio & Powell (1983) present another perspective to institutional theory by asking: “Why there is … homogeneity of organizational forms and practices”

• They seek to explain similarities, not variation between institutions.

• Institution or an organization: Sauna example

• Predictors on organizational level, 6 hypotheses in total

• Organizational/institutional field level predictors, 6 hypotheses in total

• Wider views from macrosocial theories (functionalist, Marxist theories etc.) give different explanations to isomorphic phenomena in institutions, organizations and fields.

• An example of isomorphism from Oamk (Oulu University of Applied Sciences)

Institutional isomorphism (DiMaggio & Powell, 1983)

• Three mechanism of isomorphism
• Coercive isomorphism
• Mimetic isomorphism
• Normative isomorphism

Important definitions

• Organization field; connectedness and structural equivalence of organizations

FORMAL STRUCTURE AS MYTH AND CEREMONY

(Meyer & Rowan 1977)

Background

• Myths generating formal organizational structure

• Rationalized and impersonal prescriptions

• Identifies various social purposes as technical ones in a rule-like way to pursue technical purposes rationally

• Organizational language

• Ceremony useful to organizations

• Professions, policies and programs are created along with the products and services

• Formal structure of organization

• The Problem:

• Assumption that coordination and control maintains success of formal organizations in the modern world

• Gap between formal and informal organization

• Structural elements are loosely linked to each other and to activities, rules violated, decisions unimplemented or have uncertain consequences

The Origins of Rational Institutional Myths

• Bureaucratization is caused in part by spreading of rationalized myths in society

• Elaboration of complex relational networks

• The degree of collective organization of the environment

• Leadership efforts of local organizations

Patricia Akamp, Jari-Pekka Kanniainen & Sari Törmälä