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Iron Cage Revisited
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The Iron Cage Revisited
What is The Iron Cage?
A concept created by Max Weber:
- "The rationalist spirit ushered in by simplicity had achieved a momentum of its own and that, under capitalism, the rationalist order had become an Iron Cage in which humanity was imprisoned."
Weber believed bureaucracies resulted from three things:
The Most Important Being:
Competition among capitalist firms in the marketplace
1. Competition among capitalist firms in the marketplace
2. Competition among states (Rulers need to control their staff and citizenry)
3. Middle-class demands for equal protection under the law
Three Mechanisms of Institutional Isomorphic Change
1. Coercive Isomorphism
2. Mimetic Isomorphism
3. Normative Isomorphism
Isomorphism
A constraining process that forces one unit in a population to resemble other units that face the same set of environmental conditions. The two types of isomorphism are competitive and institutional.
How are we competitive?
Questions
Resources
Organizational Theory & Organizational Diversity
• Organizational Theory of the time (~1983) attempted to explain why there was so much diversity among organizations.
• DiMaggio and Powell attempted to explain why it actually seemed there was a lack of diversity within organizations
• They pointed to the fact that when organizations in a field attempt to seek legitimacy there is a natural tendency for the organizations to have similar traits.
Mimetic Isomorphism
Normative Isomorphism
- Results from standard response to uncertainty
- Stems from political influence and the problem of legitimacy
- Associated with professionalism
Coercive Isomorphism
Institutional Isomorphism
Competitive Isomorphism
Organizations compete not only for customers and resources, but for political power and institutional legitimacy, for social and economic fitness.
This is where organizations compete for resources and customers in a completely free market system.
DiMaggio and Powell Believe there has been a shift in the causes of bureaucracies
- Structural changes in organizations are less driven by competition or the need for efficiency
- Instead organizational changes occur as the result of processes that make organizations more similar without necessarily making them more efficient.
Important Take Away
Organizations must understand the reason for structural, policy and strategy changes and that by mimicking a successful organization does not guarantee efficiency or success.