The institutional nature of organizations

Jens Jungblut (jungblut@stv.uio.no)

Lecture 4 in the course STV 2420

10.02.2020
 Information about outline of the term
paper
• Due March 2 before 15.00
• Submit through CANVAS “oppgave” function
• Should be between 0.5 and 1 page
• Includes research question, theory that you want to
use (from syllabus) and the empirical case you
want to focus on

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 Information about outline of the term
paper
• Narrow done theme of paper  from general topic
to specific case & question
• Descriptive (this is how something is) vs.
explanatory (this is why something is that way)
research question
• Explain why the topic you chose is relevant
• Motivate your choices

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 Key questions / learning goals
• What is an institution, how does it differ from an
organization?

• What happens when organizations institutionalize?

• What different forms of neo-institutional theories

exist and how do they differ?

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 Organizations vs. Institutions

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 What defines an organization
• Formal system of rules and objectives
• Technical instrument to mobilize human energy
and direct it towards a set aim
• Delegate authority and consciously co-ordinate
action
• Rational instrument designed to do a job 
rational decision-making

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 What defines an institution (based on
Selznick)
• Natural product of social needs
• Responsive and adaptive organism
• Relevance of history and social environment
• Distinctive clientele providing supports and easy
communication  loss of flexibility
• Development of informal structures, distinct values
and norms  specific ways of seeing things /
bounded rationality / logic of appropriateness
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 What does Selznick say?

• https://www.youtube.com/watch?v=_G08S-8yu58

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 Organization
Management
Administration
Routine decisions
Achieving efficiency
Mastering techniques

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 Organization Institution
Management Leadership
Administration Politics
Routine decisions Critical decisions
Achieving efficiency Defining institutional identity
Mastering techniques Defining purpose and
incorporation of values

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 The process of institutionalization
• Something that happens over time (process)

• Rooted in: history, people in the organization,

vested interests, and adaption to environment

• To institutionalize = to infuse with value beyond the

technical requirements of the task at hand
(Selznick)
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 The process of institutionalization
• Formation of group values / shared identity 
“mold the minds of individuals” (Selznick)

• Existence of organization becomes ‘taken for

granted’

• The more unclear the goals and technologies, the

more room there is for social processes of
institutionalization
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 The process of institutionalization
• No organization is completely free of
institutionalization

• No organization reaches a “final” level of

institutionalization  continuous process of
renegotiation

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 The process of institutionalization
• Transformation into institution creates concern for
self-maintenance

• Need to accommodate internal interest and adapt

to outside pressures, while preserving uniqueness
of institution

• Leaders become security-conscious

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 Institutions in public administration
theories

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 Institutional theory
• Label that describes a set of different conceptual
approaches that share a focus on the role of
institutions
• Institutions = aggregations of norms, values, rules,
and practices that shape or constrain political
behavior (Peters & Pierre)
• Counter move to strong focus on rational actors
and self-interest
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 Institutional theory
• Key question: Interplay of actors and structures
and how they can impact one another
• Structures often conceived as source for stability
while actors seen as drivers for change
• But assessment often depends on time horizon
and specific cases

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 4 strands of institutional theory
• Many different approaches rediscovered
institutions in the 70s / 80s all of them with
somewhat different assumptions
• 4 main strands:
• Historical institutionalism
• Sociological institutionalism
• New institutionalism (normative institutionalism)
• Rational-choice institutionalism
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 Historical institutionalism
• Emerged in the early 1980s
• Structures are not passive subjects
• Instead they influence agents’ activities
• Create path-dependence
• Key authors:
• Kathleen Thelen (MIT)
• Peter A. Hall (Harvard)

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 Historical institutionalism
• Formative periods  stability  critical junctures
• Institutions create their own support once they are
established  changing them becomes harder
over time even if actors want to create change
• Institutions are both dependent and independent
variable of politics
• Institutional design is not intentional but interaction
between preferences and possibilities
• Mainly incremental change
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 Sociological institutionalism
• Started with Selznick’s work on the
difference between organization and
institution (1950s)
• Importance of: values, self-maintenance,
appropriateness, being taken-for-granted
• Institutions are depending on their environment
and are shaped by it  society and societal values
are important
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 Sociological institutionalism
• Further refinement in the 1980s & 1990s and today
by the “Stanford School”
• John Meyer, Richard Scott, Woody Powell, Patricia Bromley

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 Sociological institutionalism
• Legitimacy, conformity and environmental
expectations create constraints in organizational
fields
• Organizations in the same field become more alike
(isomorphism)
• Innovation is limited because need to be legitimate
• Change occurs evolutionary
• Institutions strongly depend on their environment
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 New institutionalism (normative inst.)
• Based on a paper by March & Olsen from 1984

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 New institutionalism (normative inst.)
• Institutions less dependent on environment than in
sociological institutionalism  may have autonomy
and follow own logics
• Institutions (norms and values) are however
important in shaping individual preferences &
behavior
• Logic of appropriateness & bounded rationality
• Symbols & rituals can be more important than pure
economic / efficiency arguments (see Simon)
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 New institutionalism (normative inst.)
• Public organizations function also as power arenas
where decisions depend on power games within
organization
• Socialization into organizations makes behavior
more predictable
• Reforms might be easy to initiate but only few are
completed and they take place within bounded
rationality
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 Rational-choice institutionalism
• Developed in parallel to historical institutionalism
but in a relative isolated form
• Main authors include:
Terry Moe, Douglas North, George Tsebelis

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 Rational-choice institutionalism
• Institutions are seen as the product of choices by
political actors that try to maximize their utility
• Politics as a series of collective action dilemmas
• Links to principal-agent relations and economics
based models of institutional dynamics
• Institutions help to “lock in” certain rules and
prevent defection / misbehavior of agents
• Change is usually more planned and product of
choices based on utility
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 Summary
• Organizations and institutions are different things
• Process of institutionalization is important but also
influences how organizations operate
• Focus on institutions is important to understand
relation between actors and structures and there
are different theories with diverging foci

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 Summary
• 3 key lenses on institutions:
• As pillars of political order
• As outcome of societal values
• As self-constructed social systems
• Institutional approaches have become a leading
approach to study public administration &
organizations

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 Thank you and have a great day!

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