Institutional theory
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Institutional Theory: An Overview and Critical Analysis
Introduction to Institutional Theory
Institutional theory has become a dominant framework for understanding macro-organizational phenomena, focusing on how organizational structures and processes acquire meaning and continuity beyond their technical goals . It has been widely adopted across various disciplines, including business, management, sociology, and information systems, to explore a range of research challenges .
Evolution and Diffusion of Institutional Theory
Institutional theory has evolved significantly since its inception, expanding its scope and integrating insights from other theoretical approaches. This evolution has led to its widespread use in explaining both individual and organizational actions . A comprehensive review of literature from 1978 to 2008 highlights that institutional theory is predominantly used in empirical and quantitative research, with a focus on organizations and firms as units of analysis .
Challenges and Criticisms
Overextension and Core Purpose
One of the primary criticisms of institutional theory is that it has been stretched far beyond its core purpose. Originally intended to understand how organizational structures and processes acquire meaning, the theory now risks losing its focus due to its broad application . This overextension has led to calls for a return to the theory's core assumptions and objectives, emphasizing categories, language, work, and aesthetics .
Power Dynamics
Another significant critique is the theory's insufficient attention to power dynamics. While institutional theory has borrowed concepts from more critical perspectives, it has often shied away from examining the problematic uses of power within institutions 46. This oversight limits the theory's potential to fully understand how power operates and influences institutional processes.
Institutional Change
Institutional theory has also been criticized for its focus on the persistence and homogeneity of phenomena, often neglecting the dynamic nature of institutional change . However, recent research has started to address this gap by exploring how institutions are created, transformed, and extinguished over time 35. Theories of institutional change now consider both deliberate creation through political processes and spontaneous emergence through evolutionary processes .
Integrating Institutional and Structuration Theories
To address some of the limitations of institutional theory, scholars have proposed integrating it with structuration theory. Both theories contend that institutions and actions are inextricably linked and that institutionalization is a dynamic, ongoing process . A fusion of these theories could advance institutional theory by providing a more comprehensive understanding of how institutions are created, altered, and reproduced .
Reconceptualizing Institutional Theory
There is a growing critique that institutional theory has become too broad and dispersed, making it difficult to identify its distinct contributions . Efforts to rejuvenate the field suggest reconceptualizing the theory to focus on its unique aspects and exploring alternative lines of development . This includes a more critical examination of how institutions influence actions and the inherent power hierarchies within organizational structures .
Conclusion
Institutional theory remains a powerful framework for understanding organizational phenomena, but it faces several challenges that need to be addressed. By refocusing on its core purpose, integrating insights from other theories, and critically examining power dynamics, institutional theory can continue to provide valuable insights into the complex processes of institutionalization and change.
Sources and full results
Most relevant research papers on this topic
Challenges for Institutional Theory
Neo-institutionalism may have stretched beyond its core purpose of understanding organizational structures and processes, and four nascent research threads can help refocus the theory on categories, language, work, and aesthetics.
The diffusion and use of institutional theory: a cross-disciplinary longitudinal literature survey
Institutional theory is a widely used research method in various disciplines, but its use in Information Systems is in its infancy.
INSTITUTIONAL THEORY AND INSTITUTIONAL CHANGE: INTRODUCTION TO THE SPECIAL RESEARCH FORUM
Institutions drive change and shape change across levels and contexts, but they also change in character and potency over time.
A Loss of Power in Institutional Theory
Institutional theory has made gains but has resisted a more critical outlook, leading to less comprehensive understandings of power and its impact.
Comparing theories of institutional change
This paper compares various theories of institutional change to understand their causes, process, and outcomes, highlighting the importance of habit, learning, and bounded rationality.
Why Institutional Theory Cannot Be Critical
Institutional theory can be critical, but its conservatism and tendency to accept organizational hierarchies as givens limit its ability to critique other theories and analyze social institutions.
Institutionalization and Structuration: Studying the Links between Action and Institution
A fusion of institutional theory and structuration theory could advance institutional theory by better understanding institutionalization as a dynamic, ongoing process.
Uninhibited Institutionalisms
This paper critiques the current state of institutional theory in organization studies and suggests reconceptualizations to better understand its distinct aspects and alternative development paths.
The New Institutionalism in Organizational Analysis
The "institutional" approach to organization analysis offers a renaissance in social science, linking institutional patterns to social structure and analyzing organizational change in diverse settings.
Institutional Theory
Sociological, historical, and political institutionalism all focus on higher-order determinants to explain political processes and outcomes, but their approaches differ in their focus on causality and methodological approaches.
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