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Iron Cage Revisited

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Ryan Johnson

on 11 July 2013

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Transcript of Iron Cage Revisited

How are we competitive?
Organizational Theory & Organizational Diversity
1. Coercive Isomorphism
2. Mimetic Isomorphism
3. Normative Isomorphism
Three Mechanisms of Institutional Isomorphic Change
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.
Organizations must understand the reason for structural, policy and strategy changes and that by mimicking a successful organization does not guarantee efficiency or success.
Important Take Away
This is where organizations compete for resources and customers in a completely free market system.
A concept created by Max Weber:
What is The Iron Cage?
Weber believed bureaucracies resulted from three things:
The Most Important Being:
DiMaggio and Powell Believe there has been a shift in the causes of bureaucracies
- "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."
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.
The Iron Cage Revisited
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
Competition among capitalist firms in the marketplace
• 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.

Competitive Isomorphism
Institutional Isomorphism
Organizations compete not only for customers and resources, but for political power and institutional legitimacy, for social and economic fitness.
Coercive Isomorphism
Stems from political influence and the problem of legitimacy
Mimetic Isomorphism
Results from standard response to uncertainty
Normative Isomorphism
Associated with professionalism
Full transcript