Organizational Analysis: Week 9 Questions (Institutional Change)

DiMaggio

In the Dimaggio (1988) piece on interest and agency in institutional theory, Dimaggio attempts
to explain the role of interest and agency in institutional theory, which traditionally emphasizes
the taken-for-granted nature of organizations and their intractability and opacity in preventing
individual actors from being calculating and manipulative. I felt that Dimaggio basically
presented a political argument for the role of interest and agency in institutional theory, stating
that successful institutionalization is a product of the political efforts of actors to accomplish
their ends, and changes that jeopardize entrenched parochial interests are not likely to diffuse
widely. Do we think that Dimaggio adequately situated agency in institutional theory and found
a balance for the seemingly antagonistic institutional and interest-based explanations? (Sabrina)

DiMaggio states that “rules, structures, or practices favored by corporate CEOs diffuse according
to the same laws as those favored by social reformers”, and then says as well that “institutional
theory tells us relatively little about “institutionalization” as an unfinished process. . . why some
organizational innovations diffuse while others do not”.   Would he say that diffusion is
explained by properties of knowledge transfer, and if so, what those properties might be?  In
short, what does institutionalization have to say about the (unfinished) process of organizational
learning?   (Jennifer Lawrence)

How much can be expected from a theory? DiMaggio seems to make a good case that
institutional theory may not have adequate explanatory power to understand certain types of
change. But is is appropriate/feasible to expand institutional theory to encompass the interests of
actors within the organizational field? Do we need to be concerned about the challenges of
measuring/interpreting variable units of analysis (individual vs. collective)? (Rebecca)

Leblebici et al

Does the Leblebici et al piece actually make a convincing case of incorporating endogenous
factors in an analysis of institutional change distinct from other institutional authors (do they
make a real theoretical contribution rather than just another industry case study)? During the
formation of institutions at the very beginning of an industry (radio) lifecycle, powerful actors
prevailed (analogy was government mandated; private agreement was between the most
powerful patent-holders); while subsequent convention changes were in large part due to either
competitive forces (1940’s competition for live talent) or completely exogenous factors (1950’s
FCC regulatory changes and the emergence of TV). All of these causal explanations (power,
competition, exogenous shocks) were criticized by the authors, yet they resort to such causes in
their institutional change story as well. (Vince)

The U.S. radio broadcasting industry paper by Leblebici, Salancik, Copay, and King (1991)
reminded me in some ways of the Carroll and Swaminathan (2000) resource partitioning
microbrewery paper:  (1) both focus on an unexpected phenomena in a certain industry (the
dynamic role of radio broadcasting’s institutional players’ in triggering and spreading new
practices (L,S,C,&K, 1991) and the existence and survival of a multitude of microbreweries
alongside large national breweries), and (2) they both show how the larger players in the industry

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desire to adopt certain practices from smaller players and how in one (the radio industry) they
succeed in a way (“practical solutions developed at the micro level and institutionalized through
conventions at the macro level” (L,S,C&K, 1991, p.357)) and in the other (breweries) the larger
breweries are unable to replicate the unique, authentic beers that each of the fringe players
(microbreweries) create, and (3) contrary to expectations, it is the behavior of the larger players
in both industries that (in some senses) allowed for the existence of the smaller players
(L,S,C,&K, 356). (Mary Carol)

How has the interorganizationl field of 'Aid' changed? Have conventions played a large role in
change?  Although they are defined in this paper as " a subset of practices, they originate as
practical solutions to coordination problems at the micro level...", do you think that conventions
could operate on a more macro-level as well? Instead of not just being conventions between
people, but also between organizations? (especially given that we are looking at an
interorganizational field)?  For example, could the innumberable amount of actual conventions,
conferences, summits, etc. play a large role in changing the field as method for attempting to
align priorities and coordinate actions and funding? Why or why not? Could this be added into
Figure 6 as a macro-order mechanism? (Jessica)

The natural follow-up to Leblebici, Salancik, Copay, and King (1991) might be how the authors
make sense of the internet revolution of the last two decades and how that would compare to
their analysis of the U.S. radio broadcasting industry.  (For example, I am not sure the internet
would be considered to be a “combination of competitive private enterprise and government
franchise” like the radio, and such differences may impact the types of endogenous mechanisms
of change- but the comparison could certainly be useful (p. 334).)  Also the computer industry in
general, with Apple and Microsoft’s attempts to create the best product. (Mary Carol)

The natural follow-up to Leblebici, Salancik, Copay, and King (1991) might be how the authors
make sense of the internet revolution of the last two decades and how that would compare to
their analysis of the U.S. radio broadcasting industry.  (For example, I am not sure the internet
would be considered to be a “combination of competitive private enterprise and government
franchise” like the radio, and such differences may impact the types of endogenous mechanisms
of change- but the comparison could certainly be useful (p. 334).)  Also the computer industry in
general, with Apple and Microsoft’s attempts to create the best product. (Jessica)

Haveman

The findings in the Haveman about the relationship between environmental change and
institutional change is limited, because his data is truncated at the point where the environmental
change already happened. To provide more complete picture, he should have included time
period in which there was no incentive to diversify, and showed that there is no positive
relationship between diversification and performance and survival of organizations. I know it is a
cheap talk given the limitation of data availability but, without showing the negative or zero
relationship before the environmental change, his argument about institutional change as a way
of “adaptation” to environmental  cannot be fully supported. (Dong Ju Lee)

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I am having a little trouble with the novelty and impact of Haveman’s paper, particularly at a
level that is normally found in ASQ. Also, I am not sure that she needs to invoke institutional
ecology to the extent that she does, and I wonder if others in the class feel the same way. I
realize it was published 18 years ago (and thus, probably submitted 20 years ago) but what is
being argued here (I think – when everything is distilled down) is essentially that if an
organization makes an effort to change in response to sudden environmental change, that
organization will fare better than an organization that does not do this. And, if an organization
strays too far from its core competencies, it won’t do as well as those who stick to their core
competencies (and the empirical support here works only for successes, not failures). So, I am
curious what others think about the novelty and significance of this contribution along with its
relationship to institutional ecology. (Aaron)

haveman attributes performance and avoidance of failure to specific types of diversification, but
her theoretical framing indicates that these other forms of diversification often are attractive
because relatively underpopulated. how is haveman's framing of the motivation/process at work
here substantively different from the explanation from opportunism in the economic mode
(seeking supernormal profits under conditions of relatively perfect information about profits in
different markets)? [vt]

Haveman (1992) finds that when the organizational field is changing it is beneficial to diversify
into fields that were related rather than unrelated. But are there other factors that should be taken
into consideration in the model that could also be causing success or failure upon diversification?
What jumps into my head first is the structure of the organization and how suited it is to operate
in the fields it is moving into. While Haveman does control for a number of structural
characteristics, might she be missing others such as the way the company hierarchy is arranged
or how much the organization typically interacts with other organizations and customers in the
environment? Is this something her data could have provided for? (Anshul)

Haveman (1992) theoretically orients her study using ecological organizational theory. Could she
not have approached it from an Institutional Theory standpoint? Even just on page 4, DiMaggio
(1988) reminds us that institutional theorists spend a lot of time looking at DiMaggio's 1988
article reminds us that institutional theorists look at situations in which interest-driven behavior
is attempted but fails. Haveman describes this very situation in her proposition 2 which examines
how interest-driven thrifts fail or do not fail when trying to diversify. (Anshul)

Is "organizational domain" same with "organizational environment"? What about "environmental

conditions"? If these terms are different, what are the relations among them? (Phoenix)

Haveman argues that when an organization changes in a manner that is too unrelated to its
existing competencies, it will fare worse than an organization that changes in a manner that is
more consistent with its existing competencies. Can this kind of argument be supported
sufficiently by looking at what she does – investment diversification by savings and loans after
deregulation? I realize these are banks and managing investments is their main business process,
but I think there is some weakness around generalizability here. Also, if one wants to study
organizational change in the face of major environmental pressure, why not look at Kodak after
(most) people stopped using film? Why not look at Apple? Wouldn’t these kinds of cases be

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more applicable to the research question (and more broadly generalizable to org change)? I
suppose, from my perspective of working as a consultant implementing organizational change
for 4 years, I’m finding it hard to see many connections to what I consider organizational change
(in practice). I just see a bank changing around its portfolio. Sometimes, the banks go too far
out of their comfort zone and screw up. So, what other arguments can support the idea that these
findings could be extrapolated to organizational change more broadly? (Aaron)

Greenwood and Suddaby

if i read them correctly, their main thesis is that change in institutionalised fields can only arise
from relatively unembedded actors (either powerful central elites or marginalized fringe actors).
how does their theory address or resolve the so-called paradox of embedded agency if the agentic
actors are not actually embedded? [vt]

Greenwood & Suddabay present a more convincing institutional change story that also furnishes
a counter-example to the periphery/fringe agent of change hypothesis. But again, how much new
theoretical ground are the authors actually uncovering with this case study? For instance: much
of their causal mechanism seems to be a re-articulation of DiMaggio’s dialectical delegitimation,
or the contradiction theory (granted with more detailed description of the process of how the
dialectic plays out). (Vince)

Are the theories of institutional change in this week's articles at odd with the literature on
resource partitioning and density-dependence, or are they telling the same story differently? Can
we formulate a consistent theory that describes why, under competitive pressures, some
organizations die, others thrive, and still others change? Does institutional change describe the
state of certain industries following the recent economic downturn? (Sae)

Change from the Core or Periphery?

More than one of the readings distinguishes between actors at the core of an institutional field vs.
those on the periphery, yet they reach different conclusions. Greenwood and Suddaby identify
core actors as institutional entrepreneurs, while Leblebici et al. suggest that “fringe players” are
the key sources of agency. One explanation for this difference in accounts of professional
services versus radio is that in the radio industry, technological and demographic changes played
a key role in the obsolescence of extant forms. Fringe players were better able to react to these
changes, embedding new environmental realities into their core practices, e.g. local disc jockeys
(p.355). The key construct here seems to be something akin to organizational learning (or in
strategy, “absorptive capacity”). In radio, learning and adaptation was key to survival, whereas in
professional services, existing power and resources were more salient to the Big Five’s ability to
drive change. How would we go about unpacking the relationship between learning and agency
in creating institutional change? (Matt)

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 Organizational Analysis: Week 9 Questions (Institutional Change)

Two qualitative works of this week nicely show the origins of institutional change or new
innovations. I am just wondering to what extent this literature add new insights to the
traditional(?) institutional theory which mainly focus on the diffusion of institutions rather than
on the emergence of institutions. We all knew that early adoption of innovation is derived more
by technological and economical concerns than by legitimacy concerns, and powerful actors are
the most important players in those early stage of adoption. What different aspect of
institutionalization process are the authors of this week revealing? I found their argument about
the endogenous mechanisms of change is very novel. But what else? (Dong Ju Lee)

Methodological

Greenwood and Suddaby’s description of their data collection and analysis process was so clear
and thorough.  They state that they invented design steps “opportunistically” as events unfolded. 
What guideposts or steps can a qualitative researcher use to determine if “opportunistic” design
steps are leading to reasonable and valid results and conclusions?   (Jennifer Lawrence)

Greenwood and Suddaby (2006) explain that one reason for choosing qualitative methods was
that “the changes observed in the field of professional business services constituted a complex
social setting in which causal dynamics were not immediately apparent and the motivations of
actors were obscure” (p. 31). Doesn’t the nature of endogenous change make it a poor “fit” for
most statistical and econometric methods, many of which assume the identification of exogenous
causal, or “treatment” variables? Besides inductive techniques such as those employed here,
what are the methodological alternatives? (Matt)

My question for this week’s reading is on conducting research on institutional change :

It seems to me that most of the research on institutional change is done few years after the
change was completed. In my research, I face a situation in which the change is currently starting
to take place. I would be happy to discuss what can be tested in such a period of the change and
whether this theory is a good fit for exploring such a phase of the change. (Hila)