Copyrighted Material Social Construction of Realtey (Berger and Luckmann), 21 Social controls, 150, 297, 307-10 Social networks, 252-53 Social orders or patterns, 145, 294, 295, 310; reproduction of, 148 Social psychology, 156 Social Security Administration (SSA), 133 Social structure, 153-54, 156-57 Social theory, 78-80, 247 Socialization, 203n.10 Societal sectors, 108-40, 173 Society-centered theory, 232-35 Sociology, 143; of institutional forms/institutional change, 343-45 South Korea, 219, 363, 365-68, 376-82, 386, 387, 388 Specialist/generalist organizations, 398, 418; differential founding patterns, 405-10 Spencer, Edson, 303 Sri Lanka, 358n. 10 Stackhouse, E. Ann, 134 Standard Industrial Classification (SIC), 118, 119 Starr, Paul, 64, 346, 356 State, the, 347~48; intervention of, 195-96; and organizational diversification, 314, 321, 336n. 1; role of, 187-88, 366, 375, 378, 380-82, 385, 391, 393 ‘State-centered theory, 235-38 Statist polity, 216, 223-24, 227-28 ‘Status deprivation/competition’confict, 351, 353-54, 360n. 19 Staw, B M., 37n.22 Stenbeck, M. J. E,, 261n. 11 Step or stage models, 295 Stepan, Alfred. 216 Stinchcombe, Arthur L., 160an. 7, 9. 1611.16, 178, 191, 200, 344 Stock markets, 377-78 Strang, David, 134, 177 Strategic variation in response to institutional environments, 10S Streeck, Wolfgang, 121-22, 133 Structural controls, 136 Structural elements, introduction of, 171-12 Structural equivalence. 65. 81n.1 Structural isomorphism, 171 Structural power of business, 347, 3581.10 Structuralist imagery, 153, 154 Index Structuration, 65, 77. 171. 192, 267-68 Subcontracting relations, 370, 385 Sudnow, David, 358n.7 Sumitomo, 371, 372-73 Summer, James A., 304 Sundguist, James L., 116, 137-38 Sundstrom, William, 203n.8 Swidler, Ann, 28, 169 Switzerland, 217 Symbolism, 250, 394, 395 Szelenyi, Iven, 3600.22 Taiwan, 219, 363, 365-68, 386-88 ‘Taken-for-grantedness, 147, 152, 165, 179, 191, 390 Tamuz, Michal, 135 Task-performance, 342 ‘Technical environments, 122-26, 167-69, 184, 361, 362-63 ‘Television stations, 127-28, 139 “Tennessee Valley Authority, 12, 344 Theory of action, 15-19 Thévenot, Laurent, 38n.28 ‘Thomas, George, 188-89, 344 ‘Thompson, E, P., 255 ‘Thompson, James D., 47, 74, 125, 191 ‘Thompson, Wayne, 301 Time, 299 ‘Tocqueville, Alexis de, 145, 220 ‘Tolbert, Pamela S.,.65, 105, 178, 184, 243 ‘Total institutions /institutionalization, 151 ‘Townsend movement, 3580.7 ‘Training markets, 346-47 Transaction-cost perspective, 364 ‘Tribal systems, 160n.9 Trist, Bric L., 47 ‘Troy, Kathryn, 3045 ‘Tucker, David J., 32, 126, 175-76, 391-92 TVA and the Grass Roots (Selznick), 34n.9, 35n.13, 3580.7 ‘Tyack, David, 64, 351, 356, 3590.13 Udy, Stanley H., Jr., 47 United Kingdom, 216 United States: art museums, 272; Congress, 5-6; freedom in, 246; iberal/individualist polity, 220, 227; welfare state, 237 USSR, 230n.4 Utilitarian individual, 232-35 Utiltarian theory, 17, 35n.15 477 Copyrighted MaterialCopyrighted Material The New Institutionalism in Organizational Analysis Copyrighted MaterialCopyrighted Material The New Institutionalism in Organizational Analysis Edited by Walter W. Powell and Paul J. DiMaggio The University of Chicago Press Chicago and London Copyrighted MaterialCopyrighted Material Domhoff, J. William, 230n. Dombusch, Sanford M. , 17% Douglas, Mary, 24-25, 160.9, 162n.22, 251-52, 262.22 Downs, Anthony, 114 Dumont, Louis, 261n.9 Durkheim, Emile, 143, 158, 1631.32, 239, 247, 343-44 3590.14 East Asia, 218-19, 361-89 Ecological processes, 188, 391. See also Population ecology Economic sectors, resource-based /knowledge- based. 203n.9 Economy, 210-11 Economy effects, extemal, 193 Edelman, Lauren, 257 Educational programs, federal, 132, 176, 177 Ezls, Walter Crosby, 339 Eighteenth Brumaire, The (Marx), 346 Eisenstadt, Schmuel N., 159n.2, 261n.& Elites, 79, 237, 350-52, 353, 3580.8 359n. 14: philanthropic, 300-302, 307-9 Emery, Fred L.. 47 Enlightened self-interest, 302-4, 309 Enterprise groups, 218-19, 366-68; in Japan, 368-76; in South Korea, 376-82; in Taiwan, 383-87 Entry barriers, 394 Environment, 48, 161n. 14, 165-74. 179-80 Environmental adaptation theory, 348-49 Environmental Protection Agency (EPA), 136 Equity markets, 384 Ethnomethodology, 19-2: Europe, 222, 230n.3, 246 Exogenous/endogenous variables, 162n.28, 225, 231n.9 85-88, 106n.1 Fararo, Thomas J., 156 Federal system, 114, 130, 132, 139, 176, 196, 200 Feminists, 256-57 Fennell, Mary L., 73 Financing, 384 Firestone, William A., 125 Flacks, Richard, 251 Flam, Helen, 28 Fligstein, Neil, 30, 31, 32, 178 Formal organizing, 150, 207-9. 213-14, 217-28 Formal structure, 42-53 Index Fortune, 298, 302, 3360.3 Foucault, Michel, 202n 6, 253, 254, 260, 262nn. 23, 24, 263n.28 France, 216, 223, 224, 227-28, 237, 250-31 Freedom, 146, 246 Freeman, John H., 65, 66, 126, 140, 187, 198, 358n.11, 400 Friedland, Roger, 25, 28, 29-30, 121, 187 Function of the Executive (Barnard), 36n.19 Functional organizational fields, 173 Funding, 130-31, 176-77, 393-94, 396 Galaskiewicz. Joseph, 30, 32, 65, 287. 298. 306 Garfinkel, Harold, 19-21, 37an. 20, 21 Geertz, Clisford, 247-48 Generational uniformity, 87, 101-2; transmission experiment, 89-98 Germany, 217, 222, 228; Social Democratic party, 344 Giddens, Anthony, 20, 263n.30 Gilman, Benjamin Ives. 269, 270 Ginsberg, Benjamin, 162n.20 Goal displacement, 355, 360n.20 Goffman, Erving, 23, 150, 151 Goldner, Fred H., 67 Goode, George Brown, 233 Goodstein, Jerry, 134, 188 Gort, M., 332 Gouldner. Alvin W., 286, 360n.22 Gramsci, Antonio, 38n.29, 259 Granovetter, Mark, 252 Great Britain, 237 Greece, ancient, 238-39, 255 Greenwood, Royston, 29 Grodzins, Morton, 114, 139 Group interests, 344 Gusfield, Joseph, 3581.7 Gyenes, Antal, 134 2-23, 192, 262nn. 17, Habermas, Jurgen, 259 Habitus, 25-26 Hage, Jerald, 47 Hall, Peter, 187 Hall, Richard H., 116-17 Hamilton, Gary G., 32, 218, 231n.8, 312 Hannan, Michael T., 65, 66, 126, 140, 187, 198, 358n.11, 400 Hansot, Elizabeth, 356, 359n.13 Harper, William Rainey, 338 —41— Copyrighted MaterialCopyrighted Material Index Abbott, Andrew, 356 Abrams, M. A., 270 Accounting systems, 130-31, 177, 245 Aequisition process, 178 Action, theory of, 15-16, 2021.6 ‘Adaptation theories, 358n.11 Africa, 230n.4 ‘Aiken, Michael, 47 Akerlof, George, 4 Aldrich, Howard E. , 66, 82n.6. 362 Alexander, Jefitey, 360,16, 370,21 Alford, Robert R.. 25, 28, 29-30, 122, 187 ‘American Association of Adult Education, 279 American Association of Junior Colleges (AAIC), 339, 353 American Association of Museums (AAM), 274, 275, 276, 277, 279, 280, 284, 285 American Federation of Arts, 274,275 ‘American Library Association, 279 ‘American Management Association, 319-20 Anthropology, 202n.6, 365 “Anticipatory subordination,” 348 Ansirust suits, 321 Art museums, professionaization of, 267-89 Arthur, Brian, 193, 194, 203n.9 Assessment criteria, extemal, 51-$2 Association, defined, £59n.1 Australia, 216 Austria, 217 Authority structures, 384-88 ‘Authorization process, 175~76 Autokinetic phenomenon experiment, 88-101 Backman, Elaine, 135 Baker, Wayne, 185 Balinese cockfights, 247-48, 262n.18 Banks, 369, 378, 384 Bardach, Eugene. 115 Barnard, Chester, 36n.19 Barnouw, Erk, 64, 79 Belgium, 216 Beliefs, 180-81. 237, 390 Bell, Daniel, 25, 120-21 Bemis, Judson, 303 Benson, J. Kenneth, 120, 139 Berger, Brigitte, 165-66, 167-68 Berger, Peter L., 21, 151, 160n.8, 165-66, 167-68, 169, 178 Bergunder, Ann, 419n.1 Berk, Sarah Fenstermaker, 235 Best, Robert S.. 395 geart, Nicole Woolsey, 32, 218, 231n.8, 312 Boli, John, 188-89 Boston Globe, 299 Boston Muscum of Fine Arts, 269 ‘Bounded rationality, 315 Bourdieu, Pierre, 25-26, 38nn, 27,28 Boume, Edmund J., 261.7 Bourricaud, Francois, 35n.15 Braudel, Fermand, 183, Brint, Steven, 31. 287, 3600.22 Brown, Lawrence D.. 116 Brown, Richard H., 170 Buckley, Walter, 160n.11 Bureaucracy, 63-64, 166, 167-68, 261n.12 Burma, 2300.4 Bums, Tom, 28 Burt, Ronald S., 171, 306 Business, structural power of, 347, 358.10 Business dornination model, 338, 240, 344 Business-state relations, 195—96 California, 339, 343, 353, 358n.7, 360n. 18 ‘Campbell, D. T., 89 ‘Campbell, Doak, 339° ‘Canada, 216; VSSOs, 126, 175-76, 390-419 Capitalism, 257-58, 259, 358n.10 Carnegie Corporation, 268, 269, 274-85 ‘Camegie Foundation’s “State of Higher Education in California” (1932), 339 ‘Carnegie school, 18, 19 Carroll, Glenn R., 66, 82n.6, 134, 188, 400 Cartels, 318 —469— Copyrighted MaterialCopyrighted Material Introduction North is one of the few economists to attend to the importance of ideology and the state in maintaining institutions. As exchanges among individuals grow more specialized and complex, contracts require third-party enforcement, a de~ mand that is met by political institutions, which play a positive role in specifying and enforcing property rights. But states vary greatly in the ways they define property rights, and citizens may view political institutions as more or less legitimate, depending on their ideologies. When ideological consensus is high, opportunistic behavior is curbed. When it is low, contracting costs are higher and more energy is expended on efforts at institutional change. Thus ideological consensus represents an efficient substitute for formal rules. ‘THE Positive THEORY OF INSTITUTIONS ‘A new institutionalism has emerged in the field of politics in reaction to earlier conceptions of political behavior that were atomistic not only in their view of action as the product of goal-oriented, rational individuals (a position many “positive theorists” still share) but in an abstract, asocial conception of the contexts in which these goals are pursued. One strand of political science institutionalism (positive theory) focuses on domestic political institutions; an- other (regime theory) deals with international relations. ‘The positive theory of institutions is concerned with political decision mak- ing, especially the ways in which political structures (or institutions) shape political outcomes (Shepsle 1986). Atomistic versions of social-choice theory, to which this work responds, predicted unstable and paradoxical decisions un- der majority voting rules. Yet political life is not in constant flux; indeed, the key feature of U.S. politics is its pervasive stability (Moe 1987), What, then, accounts for this stability? The answer given by institutionalists in political sci- ence is that much of the instability inherent in pure majority voting systems is eliminated by legislative rules. This approach complements the new institutional economics in its effort to link actor interests to political outcomes. The institutional arrangements that structure U.S. politics are viewed as responses to collective action problems, which arise precisely because the transaction costs of political exchange are high. Shepsle describes political institutions as “ex ante agreements about a structure of cooperation” that “economize on transaction costs, reduce oppor- tunism and other forms of agency ‘slippage,’ and thereby enhance the prospects of gains through cooperation” (1986:74). Political institutions thus create sta- bility in political life. Most of the positive theorists’ research deals with the relatively fixed struc- tural features of the U.S. Congress—the agenda powers of congressional committees, and the rules that define legislative procedures and committee ju- risdictions (Riker 1980; Shepsle and Weingast 1981, 1987; Weingast and Marshall 1988). The public-choice models that inform this work give special prominence to the mechanics of legislating, for example, the distribution of Copyrighted MaterialCopyrighted Material I Introduction Paut J. DIMAGGIO AND WALTER W. POWELL. Institutional theory presents a paradox. Institutional analysis is as old as Emile Durkheim's exhortation to study “social facts as things,” yet sufficiently novel to be preceded by ew in much of the contemporary literature. Institutionalism purportedly represents a distinctive approach to the study of social, economic, and political phenomena; yet it is often easier to gain agreement about what itis not than about what it is. There are several reasons for this ambiguity: scholars who have written about institutions have often been rather casual about defining them; instiutionalism has disparate meanings in different disciplines; and, even within organization theory, “institutionalists” vary in their relative emphasis on micro and macro features, in their weightings of cognitive and normative as- pects of institutions, and in the importance they attribute to interests and relational networks in the creation and diffusion of institutions. Although there are as many “new institutionalisms” as there are social sci- ence disciplines, this book is about just one of them, the one that has made its mark on organization theory, especially that branch most closely associated with sociology. In presenting the papers assembled here, we hope to. accom- plish three things. First, by publishing together for the first time (in part 1) four often-cited foundation works, we provide a convenient opening for readers seeking an introduction to this literature.' Second, the papers that follow (es- pecially those in part 2) advance institutionalism's theoretical cutting edge by clarifying ambiguities in the paradigm and defining the processes through which institutions shape organizational structure and action. These papers con- solidate the work of the last decade and suggest several agendas for further investigation. ‘Third, the empirical contributions in part 3 illustrate the explanatory poten- tial of institutional theory in an area in which it has been relatively silent: the analysis of organizational change. Two of these chapters (DiMaggio; Ga- laskiewicz) analyze the emergence of organizational fields; two (Fligstein; Brint and Karabel) explain significant transformations within existing fields; and the last two chapters (Orr, Biggart, and Hamilton; Singh, Tucker, and Meinhard) explore the relationship between institutional processes and in- terorganizational competition. Copyrighted MaterialCopyrighted Material Index Price sewing, 318-19 Princeton University, 276 “Private interest government,” 133 Process controls, 136 Product-dominant/product-related/product- unrelated diversification pattems, 325, 326— 34, 3360.6 Production, types of. and organizational forms, 366 Professional diversity, 196-97 Professionalization, 70-72, 77, 130, 172, 356, 3600.22; of art museums, 267-89; of corporate philanthropy, 304-7, 308, 310 Profit maximization, 375 Programmatic decision, 176-77 Protestant Ethic and ihe Spirit of Capitalism (Weber), 63 Praeworski, Adam, 230n.5 Public-choice theory, 233, 252, 260 Public opinion, 237 Public policy, 113-15, 120 Publishers, 127-28 Putterman, Louis, 34.4 Ramirez, Francisco, 160n.10 Rational-choice theory, 157, 232-33, 251, 255 Rational myths, 47-49, 166-67, 390 Rationality, 315: collective, 63-81; individual instrumental, 232-35; insttutionalizing, 304-7 Rationalization, organizational/social, 207-8 Rationalized society, 207 Rea, Paul Marshall, 280-81, 282, 284, 285 Reagan era, 162n.20, 200 Realist imagery, 153, 162n.26 Recombination, 199 Reductionism, 365; 40 Regimes, and international relations, 6-7, 150 Reinstitutionalization, 152 Relational frameworks, 171 Relational networks, elaboration of, 48 Resistance to change, 88, 102-3; experiment, 99-101 Resource dependency, 76, 104, 195, 235, 353, 359.15, 361, 364, 391 Rewards, 145, 1601.6 Richards, Chatles R., 279 Riesman, David, 348 istorical limits of, 238~ —476— Risk, 246, 375 Ritti, R.R., 67 Ritual, 250 Rockefeller philanthropies, 274, 279 Role theory, 255 Roman Empire, 230n.2, 261n.2 Rose, Stephen, 419n.1 Rothman, Mitchell, 64 Rowan, Brian, 21-22, 30, 75, 125, 128, 131, 165, 166, 169, 180, 190, 337, 390 Roy, William, 187 Rumelt, Richard, 324, 3360.5 Sachs, Paul J., 275, 276, 279, 285 Salancik, Gerald, 67-68, 74, 359n.15 Sales and marketing strategy, 320-21 Sanctions, 37n.23, 102, 145, 160n.6 Sappho, 2610.4 Schacht, Henry, 303 Schelling, Thomas, 65 Schmitter, Philippe C., 121-22, 133 Schneider, Mark A., 363n.18 School policy, 125, 127, 128-29, 133-35, 180-81 Schotter, Andrew, 162n.21 Scitovsky, Tibor, 385 Scott, Joan Wallace, 257 Scott, W. Richard, 12, 25. 28, 29. 30, 32 37n.23, 124, 128, 134, 159n.2, 167, 168, 170, 171-72, 173, 176-77, 184, 190, 197, 202n.2, 362, 363 Sectors: controls, 135-37; decision making, 129-35; levels, 126-29; organization, 122- 0 Selection pressures, 66, 81n.4 Selznick Philip. 12, 16, 34n.9, 35.13, 65, 124, 180, 344, 355, 358nn. 7.8 Sergiovanni, Thomas J., 132 Shareholding, mutual, 371-73, 377, 378 Shefter, Martin, 162n.20 Shepsle, Kenneth A., 5, 10 Sherif, M., 88-89 Shin, Don, 38n.29 Shweder, Richard A., 2610.7 Simon, Herbert A., 18-19, 35n. 11, 80 Singh, Jitendra V., 32, 126, 175-76, 391-92 Skocpol, Theda, 236, 237, 238, 2600.1 Skowronek, Stephen, 222 Skvortez, John, 156 Smelser, Neil, 257 Copyrighted MaterialCopyrighted Material Introduction A different strand of institutional thinking comes from such fields as mac- rosociology, social history, and cultural studies, in which behavioralism never took hold. In these areas, institutions have always been regarded as the basic building blocks of social and political life. New insights from anthropology, history, and continental social theory challenge deterministic varieties of both functionalism and individualism, shedding light on how meaning is socially constructed and how symbolic action transforms notions of agency. This linc of thinking suggests that individual preferences and such basic categories of thought as the self, social action, the state, and citizenship are shaped by in- stitutional forces. Within organizational studies, institutional theory has responded to em- pirical anomalies, to the fact that, as March and Olsen (1984:747) put it, “what we observe in the world is inconsistent with the ways in which contemporary theories ask us to talk.” Studics of organizational and political change routinely point to findings that are hard to square with either rational-actor or func- tionalist accounts (see DiMaggio and Powell, ch. 3). Administrators and politicians champion programs that are established but not implemented; man- agers gather information assiduously, but fail to analyze it; experts are hired not for advice but to signal legitimacy. Such pervasive findings of case-based re- search provoke efforts to replace rational theories of technical contingency or strategic choice with alternative models that are more consistent with the orga- nizational reality that rescarchers have observed. Approaches to institutions rooted in such different soils cannot be expected to converge on a single set of assumptions and goals. There are, in fact, many new institutionalisms—in economics, organization theory, political science and public choice, history, and sociology—united by little but a common skep- ticism toward atomistic accounts of social processes and a common conviction that institutional arrangements and social processes matter. In this brief review, we focus only on a few of the major tendencics and contrast them with the “new institutionalism” in organizational analysis.> ‘Tue New INSTITUTIONAL ECONOMICS: The analytic tradition initiated by Coase (1937, 1960) and reinvigorated by Williamson (1975, 1985) has been taken up by economic historians (North 1981), students of law and economics (Posner 1981), game theorists (Schotter 1981), and organizational economists (Alchian and Demsetz 1972; Nelson and Winter 1982; Grossman and Hart 1987). The new institutional economics adds a healthy dose of realism to the stan- dard assumptions of microeconomic theory. Individuals attempt to maximize their behavior over stable and consistent preference orderings, but they do so, institutional economists argue, in the face of cognitive limits, incomplete infor- mation, and difficulties in monitoring and enforcing agreements. Institutions arise and persist when they confer benefits greater than the transaction cots (that sages Copyrighted MaterialNEW SuuCopyrighted Material ‘The University of Chicago Press, Chicago 60637 ‘The University of Chicago Press, Lud.. London © 1991 by The University of Chicago All rights reserved. Published 1991 Printed in the United States of America ISBN-13: 978.0-226-67709-5 ISBN-10: 0-226-67709-5 IOIBITIGIS 1413121010 91011 1213 Library of Congress Cataloging-in-Publication Data ‘The New institutionalism in organizational analysis / edited by ‘Walter W. Powell and Paul J. DiMaggio. Pp em Includes bibliographical references (p. _) and index. 1. Organization. 2. Social institutions, 3. Social change. 1, Powell, Walter W. I]. DiMaggio, Paul, HMI31.N47_ 1991 302.3'5—de20 91.9999 cr © The paper used in this publication meets the minimum requirements of the American National Standard for Information Seiences—Permanence of Paper for Printed Library Materials, ANSI 239.48-1992 Copyrighted MaterialCopyrighted Material Introduction is, the costs of negotiation, execution, and enforcement) incurred in creating and sustaining them. The new institutional economics takes the transaction as the primary unit of analysis. The parties to an exchange wish to economize on transaction costs ina world in which information is costly, some people behave opportunistically, and rationality is bounded. The challenge, then, is to understand how such at- tributes of transactions as asset specificity, uncertainty, and frequency give rise to specific kinds of economic institutions. According to organizational econo- mists, institutions reduce uncertainty by providing dependable and efficient frameworks for economic exchange (North 1988). Despite these shared assumptions there are points of divergence even within the new institutional economics. In particular, there are differences in treat- ments of transaction costs, contention over the optimality of institutions, and differential explanatory weight given to the state and ideology. Williamson (1985) sees opportunism (self-interest-seeking with guile) as a key source of transaction costs. By contrast, Matthews (1986) emphasizes the purely cog- nitive costs of organizing and monitoring transactions, even when participants are honest. North (1984) also defines transaction costs more broadly, viewing them as the general overhead costs of maintaining a system of property rights, under conditions of growing specialization and a complex division of labor. Another unresolved issue concerns the extent to which institutions represent optimal responses to social needs. Throughout much of this literature there is, to use Kuran’s (1988:144) term, an air of “optimistic functionalism, a mode of explanation whereby outcomes are attributed to their beneficial consequences.” Williamson (1985), for example, implies that considerable foresight is exer- cised in the development of institutional arrangements and that competition eliminates institutions that have become inefficient. By contrast, Akerlof (1976) demonstrates that institutions may persist even when they serve no one's interests. For example, although everyone may be worse off under a caste sys tem, rational individuals may comply with its norms because they do not want to risk ostracism. In other words, once institutions are established, they may persist even though they are collectively suboptimal (Zucker 1986). Nelson and Winter (1982), who take an evolutionary approach, view institu- tions as end products of random variation, selection, and retention, rather than individual foresight. North (1988) argues that institutions are shaped by histor- ical factors that limit the range of options open to decision makers; thus they produce different results than those implied by a theory of unlimited choices and strategic responses. Matthews (1986) argues that inertia plays an important role in institutional persistence. Even when institutions do not conform to the demands of a given environment, they may nevertheless endure because, as North suggests, the prospective gains from altering them are outweighed by the costs of making the changes. Thus, for North and others, the transaction costs of institutional change provide institutions with something of a cushion. Copyrighted MaterialCopyrighted Material Index Harvard Business Review, 299 Harvard University. 275, 276 Hawley, Amos, 47, 66, 364 Hawthorne, Bower, 301 Hechter, Michael, 255 Herriott, Robert E., 125 Higher Learning in America, The (Veblen), 358n.9 Hinings, C. R.,29 Hirsch, Paul M., 71, 120, 173 Hirschman, Albert ., 245, 2611.14, 296 Hoffer, Thomas, 133 Hofstede, Geer, 218 Hollis, Martin, 262n.25 Homeless Mind, The (Berger, Berger, and Kellne:), 165-66 Homer, 239, 261.3 Horizontal diversification, 371, 376 Horizontal/ vertical patterns of relations, 112 Hospitals, 73, 175 House, Robert J., 126, 175-76 Households, 235 Hows Institutions Think (Douglas), 251 Human services systems, 115-17 Hungary, 258; agricultural cooperatives, 134 Hunt, Lynn, 250 Huntington, Samuel, 1611.20 Huo, Yang-chung Paul, 400 Ideologies. 262n.21 Imitation, unsuccessful, 199 Imprinting process, 178-79 India, 230n.4, 239, 2610.7 Individual roles, 188-90 Individualist imagery, 153, 154, 163n.29 ‘duality, transformation of, 238-40 Inducement strategies, 176-77 Industry system, 120, 173 Inspection and evaluation, ceremonial, 59-60 Institution, 34n.3, 143, 145; and association distinguished, 159nn, 1, 2; and norm stinguished, 1600.6 Institution-building: corporate philanthropy, 293-310 Institutional analysis, 310 Institutional arguments and rational-choice arguments, 157 Institutional boundaries, 2620.20 Institutional change, 152-53, 254, 287; and ecological dynamics, 390-419; extrainstitutional sources of, 30-31; and institutional patterns, 197-200 —an— Institutional commonalities and modern polity. 209-14 Institutional contradiction, 29-30, 241, 255, 256-59 Institutional definition (structuration), 65, 77, 171, 192, 267-68 ional development, 152 ional diffusion, 268, 286-87, 335 7 Institutional environments, 123, 184, 361-63; change in, 393-96, 415-16, 418; impact on organizations, 49-53; and organizational death rates, 410-15; and organizational Foundings, 400-410; and organizational structures, 174-81; and population change, 391; and technical environments, 167-69 Institutional expectations, 188, 237 Institutional interests, 345-55 Institutional isomorphism, 186, 362, 376, 390; and collective rationality, 63-81; mechanisms of change, 67-74 Institutional origins and transformations, theory of, 345-55 Institutional pattems, 188; and institutional change, 197-200 Institutional reproduction, 189-94 Institutional sources of change in formal organizing, 225-28 Institutional structures and organizational activities, 54-60 Institutional terms, conceptualizations of, 149-50 Institutional theory, 153, 267, 390, 391; cultural persistence in, 84-89; microfoundations of, 19-22, 103-6; new directions in, 27-33 Institutional transformations, 246, 250-51; of individuality, 238-40 Institutionalism: and actors, 157-59; expanded, 186-89; and institutional effects, 153-37; and isomorphism, 386-89; restrictive, 183-86; and the theory of setion, 15-19 Institutionalization, 145, 180, 390; and action contrasted, 148; binding power to a value, 161n.16; comparison of, 151, 161n.19; of corporate public service activity, 299-307; and cultural persistence, 87-88: degrees of 104, 151-52; and diversification, 334 ethnomethodological approach to, 85-86; of formal organization, 213-14; forms of, Copyrighted MaterialCopyrighted Material Contents 12 Making Corporate Actors Accountable: Institution- Building in Minneapolis-St. Paul Joseph Galaskiewicz B. Institutional Change 13 The Structural Transformation of American Industry: An Institutional Account of the Causes of Diversification in the Largest Firms, 1919-1979 Neil Fligstein 14 _ Institutional Origins and Transformations: The Case of American Community Colleges Steven Brint and Jerome Karabel C. Institutional and Competitive Forces 15 Organizational Isomorphism in East Asia Marco Orrit, Nicole Woolsey Biggart, and Gary G. Hamilton 16 Institutional Change and Ecological Dynamics Jitendra V. Singh, David J. Tucker, and Agnes G. Meinhard References Contributors Index vi Copyrighted Material 293 337 361 390 423 465his boc contig taal meter fr his xing Pon Seep eanng “in atonal Uncen sts ol usztonn, tly f "He UNNEESIY OF cHLAGO HSS repeatsCopyrighted Material Contents Acknowledgments 1 Introduction Paul J. DiMaggio and Walter W. Powell Part One: The Initial Formulations 2 Institutionalized Organizations: Formal Structure as Myth and Ceremony John W. Meyer and Brian Rowan 3 ‘The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organization Fields Paul J. DiMaggio and Walter W. Powell 4 The Role of Institutionalization in Cultural Persistence Lynne G. Zucker 5 ‘The Organization of Societal Sectors: Propositions and Early Evidence 'W. Richard Scott and John W. Meyer Part Two: Refining Institutional Theory 6 Institutions, Institutional Effects, and Institutionalism Ronald L. Jepperson 1 Unpacking Institutional Arguments W. Richard Scott 8 Expanding the Scope of Institutional Analysis Walter W. Powell 9 The Public Order and the Construction of Formal Organizations Ronald L.. Jepperson and John W. Meyer 10 _ Bringing Society Back In: Symbols, Practices, and Institutional Contradictions Roger Friedland and Robert R. Alford Part Three: Empirical Investigations A, Constructing Organizational Fields 11 Constructing an Organizational Field as a Professional Project: U.S. Art Museums, 1920-1940 Paul J. DiMaggio Copyrighted Material Vii 4l 63 83 108 143 164 183 204 232 267Copyrighted Material Index Utility formation theory, 233-35 Utility maximization, 245 Variation, sources of, 195-97 Veblen, Thorstein, 3580.9 Vertical integration, 318, 370, 376 Vertical/lateral differentiation, 219 Voluntary social service organizations (VSSOs), 126, 175-76, 390-419 Wall Street Journal, 298, 299, 302 Wallerstein, Michael, 230n.5 Wallich, H.. 302 ‘Warmer, R. Stephen, 36n.17 Warmer, W. Lloyd, 295 Warren, Roland L., 111-13, 4191.1 Weber, Max, 42, 43, 63,67, 78, 247, 344, 355 Weick, Karl E., 37n.22, 163 Weinstein, James, 79 Welfare state, 237 Welfing, Mary B., 1610.20 Westney, D. Eleanor, 29 Whisler, Thomas, 71 Wikdavsky, Aaron, 115, 120-21, 122 Williamson, Oliver E.,.4, 74, 163n.30, 178 478 Winter, Sidney, 4, 10, 78 Wissler, Clark, 279, 280, 282 ‘Women and Foundations/Corporate Philanthropy, 303-6, 308 Women’s Christian Temperance Union, 358n.7 Work, decision to, 234 Workers and capitalists, 257-58 Workplace reform, 198 ‘World Health Organization, 188 World system and formal organizing, 208-9 World War I, 357.2, 360n.18 ‘Wuthnow, Robert, 210 ‘Wyman, Thomas, 303, Yale University, 276, 280 Yeng, Mayfair Mei-hui, 258, 263n.28 YMCA, 358n.7 Young, Oran R., 8, 34n.$ Yout2, Philip, 283-84, 285 Zaibatsu groups, 372-13, 375 Znaniecki, Florian, 159n,2 Zucker, Lynne G. , 12, 25,29, 370.23, 65, 160n.5, 166, 178, 184, 190, 243, 342 Copyrighted MaterialCopyrighted Material Introduction agenda-setting powers, the sequence in which proposals must be made, and the allocation of veto rights (Shepsle and Weingast 1987; Ostrom 1986; Shepsle 1986, 1988). Modeling in this tradition often employs principal-agent imagery to examine the efforts of one political actor (e.g., a congressional subcommit- tee) to control another (e.g., a federal agency). The general picture provided by this insightful line of work is one in which congressional policy is highly dependent on the agenda-setting powers inherent in legislative rules. The explanation of the powerful gatekeeping role played by legislative committees “resides in the rules governing the sequence of propos- ing, amending, and especially of vetoing the legislative process” (Shepsle and Weingast 1987:86). The structure of political rules is fairly resilient to the ebbs and flows of the agendas of politicians, and the rules can easily live on when the original support for them wanes, As aresult, legislative rules are seen as robust, resistant in the short run to political pressures, and in the long run, systemat- ically constraining the options decision makers are free to pursue. Political scientist Terry Moe has chided rational-choice institutionalism for emphasizing the formal mechanisms of legislative control to the exclusion of indirect, unintentional, and systemic methods (Moe 1987:291). Missing from the positive theory's models of rules and procedures are the dynamic, informal features of institutions. In an insightful analytic history of the National Labor Relations Board, Moc demonstrates how the agency transformed its own politi- cal environment, and highlights the vital mutual dependence that developed between the NLRB and its constituents. He also emphasizes the role of infor- mal norms and standards of professionalism in shaping the board’s relationship with Congress. Nevertheless, Moe concludes that, despite its flaws, the new institutionalism in politics and economics promises to provide a general rational- choice theory of social institutions. We are somewhat less optimistic, in part because Moe's excellent work demonstrates that this approach focuses on only the more formal and fixed aspects of the political process. While some concen is evinced for how institutions emerge, most of the analyses treat rules and pro- cedures as exogenous determinants of political behavior. INTERNATIONAL REGIMES The second strand of political science’s new institutionalism has emerged in the field of international relations. Here scholars have rejected a once popular anarchic view of international relations and have explored the conditions under which international cooperation occurs, and examined the institutions (re- gimes) that promote cooperation (Krasner 1983; Keohane 1984, 1988; Young 1986). International regimes are multilateral agreements, at once resulting from and facilitating cooperative behavior, by means of which states regulate their relations with one another within a particular issue area. Some of these interna- tional institutions (e.g., the United Nations or the World Bank) are formal organizations; others, such as the international regime for money and trade (the GATT or General Agreement on Trade and Tariffs) are complex sets of rules, Copyrighted MaterialCopyrighted Material 150- 149, 160n.11; of organizational forms, 267; ‘versus resource dependence, 104; tensions within, 268; vulnerability to soci intervention, 151-52; what itis not, 147— 49 Institutionalized organizations, structural inconsistencies in, 55-56 Institutionalized rules, 42, 390 Institutions: how they operate, 146~47; and institutionalization, 144-50; logic of, 248— 53; positive theory of, 5-6; as shapers of interest and politics, 28-30 Interdependencies, complex, 191-92 Interest structures, 214 Interfirm network structure, 363 Interinstitutional conflict, 29-30 Intermarket groups, Japanese (Kigyo shudan), 367. 368-76 International Monetary Fund, 188 International regimes. 6-7 Interorganizational fields, 110, 173 Interorganizational network, 120 Intersocietal variation, 363, 365 Intrasocietal isomorphism, 363 Isomorphic change, predictors of, 74-77 Isomorphism, 47, 66, 819.5, 171, 361, 391; versus differentiation, 105; and instirutionalism, 386-89 Maly, 216, 3581.10 |; incomplete, 199; and legitimation, Jacobs, Norman, 382 Jacobs, R. C., 89 Janowitz, Morris, 294, 295 Japan, 218-19, 230n.4, 239, 262n, 16, 363, 365-76, 386-88 Jepperson, Ronald L. 38n.28. 191 Jitwangiye (Taiwanese business groups), 367, 368, 383-86 25, 28, 29, 30, 370.23. Kadushin, Charles, 64 Kanter, Rosabeth Moss, 66, 72 Karabel, Jerome, 31, 287, 360n.21 Keim, Gerald D., 302 Keiretsu (Japanese independent industrial and financial groups), 367, 368-76 Kellner, Hansfried, 165-66, 167-68 Kent, Henry, 285 Keohane, Robert 0., 7 Keppel, Frederick, 275, 276, 277, 279, 280, 281, 282-83, 285 Index Kigyo shudan Uapanese intermarket groups), 367, 368-76 Kimball, Fiske, 280, 281, 283, 284 Kimberly, John R., 179 Kinship networks, 383-86, 387-88 Knoke, David, 81n.3, 230n.5, Koch, David, 301 Komarek, Valtre, 258 Konrad, George, 360n.22 Koos, Leonard, 339 Koran, Timur, 4 Labor, 257-38 Labor market, 341, 346-47, 352, 3590.15 Labor union foundings, 400 Lachmann, L. M., 160n.8 Landau, Martin, 139-40 Lange, Alexis P., 338 Larson, Magali Sarfatti, 70, 356 Latin America, 216, 224, 230n.4, 245 Laumann, Edward O.. 65 Laurent, André, 218 Law firms, 105 Leadership efforts of local organizations, 48— 49 Lee, M. L..73 Legal environment, 67~68, 187-88 Legitimation, 169-70, 202n.5, 396, 3 institutionalization, 149, 160n.11; and organizational death rates, 413~15 Levels of analysis. 153, 154, 240-42 Lévi-Strauss, Claude, 160n.9, 248, 253 Liberal/incividualist polity, 216-17, 220-22, 27 Lindblom, Charles E., 347, 3589.9 Lindsey, Michael L., 116-17 Ling, Jim, 322 Lodge, George, 303 Logan, John R.. 296 Logic of confidence and good faith, 58-59 Lombardi, John, 3600.17 Low, J. 0.,295 Luckmann, Thomas, 21, 151, 160n.8, 165, 179 Lynd, Helen, 295 Lynd, Robert, 295 McClatchy, John H., 283, 284 McGowan, J. J.. 30 McGuire, Joseph W., 302 Maclver, Robert M., 159n.1 Macroinstitationalism, 103-4, 149, 154, 160n.13, 163n.29 and 43 Copyrighted MaterialCopyrighted Material Acknowledgments We owe a special debt to the American Sociological Association's Problems of the Discipline (POD) Program for a small grant that made it possible to hold the conference out of which this volume emerged, and to the Center for Advanced. ‘Study in the Behavioral Sciences for hosting that conference and in many other ways facilitating Powell’s work on the project. (Actually, our debts to both the ASA and the Center for Advanced Study go back further, for the idea for the conference was inspired by and hatched at an earlier conference, also supported bya POD grant, that Lynne Zucker organized at UCLA in 1985, while DiMag- gio was at the Center.) In recognition of our debt to the ASA, and of the POD program’s unique contribution to cooperative efforts in social science schol- arship, we have pledged royalties from the hardcover edition to the ASA for use in the Problems of the Discipline program. Special thanks are also due to the Program on Nonprofit Organizations at Yale, an institution that has generously supported our collaborative and individual work over the years. We have accumulated numerous other debts in the production of this volume that are less easily repaid. To Doug Mitchell of the University of Chicago Press, we owe thanks for his confidence, good advice, unparalleled diplomacy, and patience. To Sharon Ray, we owe appreciation for her patience and diligence in compiling and keeping track of the references. Chick Perrow and Mayer Zald were part of this project from the beginning, serving as a kind of loyal opposi- tion at the conference and offering valuable criticism and advice as the book manuscript took form. We acknowledge the helpful critical comments of many generous reviewers in notes to the introduction and our own chapters, but con- versations and correspondence with Ron Jepperson, John Meyer, Dick Scott, and Lynne Zucker have been so helpful over such a long time that their contri- butions to our thinking cannot be isolated within particular chapters. We are lucky to work in an area peopled by such fine colleagues. We owe a special debt to ourauthors, who, despite having many other obliga- tions, went beyond the call of duty, often making numerous revisions, to produce substantial papers of the highest quality. We confess that we briefly harbored an impulse to put out a “quick and dirty” conference report; it was the exemplary work of the contributors, more than anything else, that raised our aspiration level. (We also thank them for their patience.) Finally, we are grateful to our two favorite natural scientists, Marianne Broome Powell and Carol Mason, for putting up with this volume and its edi- tors despite the fact that they are even busier than we are. vii Copyrighted MaterialCopyrighted Material Introduction ‘Together, then, the contributions to this volume represent the new institu- tionalism’s origins, its present, and its future. They set out fundamental ideas, define and clarify distinctive analytic frameworks, and explores themes of change, conflict, and competition that bring institutional analysis into closer contact with the concerns of organization studies and contemporary social theory. This introduction provides a context for the papers that follow. We present neither an overview nor a critique of the new institutionalism in organization theory, nor do we offer a research agenda. The contributions to this book do those jobs very ably. What we shall do, in the following sections, is locate the “neoinstitutional” organization theory presented here, first, among the several contemporary institutionalisms, especially those of economics and political science, and, second, within the disciplines of sociology and organization stud- ies, both with reference to the “old” institutionalism and to independent but convergent developments in sociological theory. We close this inttoduction with a discussion of several key open questions in institutional analysis and show how chapters in this volume speak to these issues. The “New Institutionalism” in Disciplinary Context ‘The study of institutions is experiencing a renaissance throughout the social sciences.? In some quarters, this development is a reaction against the behav- ioral revolution of recent decades, which interpreted collective political and economic behavior as the aggregate consequence of individual choice. Behay- ioralists viewed institutions as epiphenomenal, merely the sum of individual- level properties. But their neglect of social context and the durability of social institutions came at a high cost, especially in a world in which “social, politi- cal, and economic institutions have become larger, considerably more complex and resourceful, and prima facie more important to collective life” (March and Olsen 1984:734), The resurgence of interest in institutions also harkens back to an older tradi- tion of political economy, associated with Veblen and Commons, that focused on the mechanisms through which social and economic action occurred; and to the efforts of functionalists like Parsons and Selznick to grasp the enduring in- terconnections between the polity, the economy, and the society. These older lineages fell into disfavor not because they asked the wrong questions, but be- cause they provided answers that were either largely descriptive and historically specific or so abstract as to lack explanatory punch. The current effort to conjoin the research foci of these traditions with contemporary devel- ‘opments in theory and method is not merely a return to scholarly roots, but an attempt to provide fresh answers to old questions about how social choices are shaped, mediated, and channeled by institutional arrangements. = Copyrighted MaterialCopyrighted Material Index Categorical nutes, 55-60 Catholic mass, 1600.10 Causal analysis, 295. 310 Celler-Kefauver Act, 321 “Center,” 150, 1610.17 CEOs (chief executive officers), Functional background of, 322-23, 324, 332-34 Chaebol (South Korean enterprise groups), 367, 368, 376-82 Chandler, Alfred D., 356 Chicago Tribune, 299 China, 258-59 Christianity, 155, 210, 215, 230n.3, 240, 249, 254, 261nn. 8, 9 Clark, Burton R., 358n.7, 3600.20 Class theory, 259 Cleveland Museum of Natural History, 280, 285 Clique, 810.1 Coercion, 67-69, 175, 375, 391 Cognition, 35n.10, 315-16, 335, 390 Cole, Robert, 198 Coleman, James S., 133, 297 Coleman, Laurence V., 277 Collective organization of the environment, 48, Collective rationality, 63-81 College Ant Association, 274, 275 Collins, N., 336n.3 Collins, Randall, 20, 23~24, 37n.25, 70 Commodities markets, 184-85 Community colleges. vocationalization of, 31, 287, 337-56 Community-corporate relations, 295-98 Community of firms (Japan), 368-76, 387 Community patterns, 111-13 ‘Competition, 187, 202n.5, 364-65; and cooperation, 375; and efficiency, 32~33, Competitive isomorphism, 361, 362, 373-75 ‘Compromise, 196 Conference Board, 299, 304 Conflict theory, 360n. Connectedness, 65, 81n.1 Constraints, 146, 197 Constructedness, 153-54, 156-57, 162n.28 ‘Consumer-choice model, 337-38, 240, 344, 357.3 Contextuality, 149-50, 161n.12 Cooperation, 375 Corporate-community relations, 295-98 Corporate contributions professionals, 304-7, 308, 310 —470— Corporate grants economy, 299-300 Corporate patrimonialism, 376-82, 387 ‘Corporate phitanthropy, 287, 293-310 Corporatist potty, 121, 217, 222-23, 228 Coser, Lewis, 6+ Council for Financial Aid to Education, 299 Cowles, John, Jr, 301 Cross, K. Patricia, 360n. 17 Culture, 150-51, 165-67, 168-69; organizational, 155, 208; politics of, 253— 56 Cultural analysis, 247-48 Cultural anthropology, 202n.6 Cultural controls, 180-81 Cultural persistence, 83-106 Cummings, Scott, 196 Curb market financing, 384 Czechoslovakia, 258 Daewoo, 388 Daft, Richard L., 392 Dahrendorf, Ralf, 148 Dana, John Cotton, 270, 279-82, 285, Data analysis, 324-26 David, Paul, 193, Davis, Jerry, 190 Dayton, Bruce, 303 Dayton, Kenneth, 301 Deal, T. E., 124, 184 Debt financing, 383-84 Decision making, 129-35 Decoupling structures and activities, 57—58 Deinstitutionalization, 105, 152 Delacroix, Jacques, 66, 821.6, 188, 400 Deleuze, Giles, 253 Demographic changes, 354, 360n.17, 393 Dependency, 335 Depression, the, 320-21 Derthick, Martha, 130 Detroit Art Institute, 273 Development, differential, 365-66 Differentiation vs. isomorphism, 105 Diffusion processes, 268, 286-87, 335 DiMaggio, Paul J., 25,29, 30, 31, 370.23, 64, 120, 171-75, 177, 184, 185-86, 190, 191, 197, 244, 246, 247, 267, 306, 315, 342-43, 362, 364, 375 Diversification, 171-72, 313-14, 325, 326— 34, 335, 336n.6, 371, 376 Diverted Dream, The (Brint and Karabel), 357.1 Copyrighted Material