INSTITUTIONAL LOGICSAdvanced Organizational Theory – 3/9/2010

Authors

Patricia H Thornton Adjunct Associate Professor Duke University Research Interests

Institutions Governance Innovation and Entrepreneurship Cultural Industries

William Ocasio Professor Northwestern University Research Interests

Corporate Governance Organizational Attention and decision making Executive power and politics Organizational and Institutional Change

Agenda

Introduction and background Defining Institutional Logics Institutional Logics as Meta-Theory Institutional Logics as Method of Analysis Institutional Logics and

Individual/Organizational Action Change in Institutional Logics

Introduction and Background Emerged as part of institutional theory

(1970’s) Friedland and Alford (1991) summarize as:

Defining the content and meaning of institutions Less focus on isomorphism

More focus on effects of different logics Variety of contexts/levels of analysis

Can be used to bridge micro and macro levels Recognize that actors have a hand in shaping

the institutional logic

Agenda

Introduction and background Defining Institutional Logics Institutional Logics as Meta-Theory Institutional Logics as Method of Analysis Institutional Logics and

Individual/Organizational Action Change in Institutional Logics

Early Theorizing

Introduced by Alford and Friedland (1985) Decribe the contradictory practices and beliefs

in western organizations Extended by Friedland and Alford (1991)

Each institution has a central logic Logic guides organizing principles, gives actors

vocabularies of motive and sense of self Constrains means and ends of behaviour in

that institution Provides a source of agency and change

Similar definitions

Jackall (1988): “The way a particular social world works” More emphasis on normative dimensions Less emphasis on symbolic resources

Thornton and Ocasio (1999) Emphasis on all three dimensions (all are

necessary and complementary Structural Normative Symbolic (Cognitive)

Precursors to Institutional Logics

Logics of action Defined: “Framework groups use to guide their

behavior as they confront the practical constraints on their lives” (cite)

Talks about conflicting logics sans isomorphism Power struggles

Between professions (finance, mktg., manuf.) Between social classes/cultural models

Posit the existence of logics at the supraorganizational level and emphasize culture in shaping organizational activities

Agenda

Introduction and background Defining Institutional Logics Institutional Logics as Meta-Theory Institutional Logics as Method of Analysis Institutional Logics and

Individual/Organizational Action Change in Institutional Logics

Logics as Meta-theory

All three major definitions share a core meta-theory To understand individual and organizational

behaviour Five principles

Embedded agency Society as an inter-institutional system The material and cultural foundations of

institutions Institutions at multiple levels Historical contingency

Embedded Agency

Core assumption “…the interests, identities, values, and

assumptions of individuals and organizations are embedded within prevailing institutional logics”

Decisions and outcomes are at the intersection of individual agency and institutional structure Partial Autonomy

Three levels of society Individuals competing and negotiating Organizations in conflict and coordination Institutions in contradiction and

interdependency

Society as an inter-institutional system

System of societal sectors Each sector represents a different set of

expectations for social relations and behavior

Allows sectors to be in conflict Enables two advances in institutional

analysis Non-deterministic – no institutional order has

a priori causal primacy Institutional system provides an

understanding of institutional foundations of categories of knowledge

Material and Cultural Foundations

Each institution has material and cultural characteristics Institutions develop and change from

interactions of both Changes how we look at conflict and

agency How do we know if/when there is conflict? How do we respond to said conflict?

Institutional logics look at both symbolic and normative facets of culture Some sociologists have been hesitant with

norms.

Institutions at Multiple Levels Promising field for multi/cross-level research

Organizations, markets, networks, industries, etc.

Logics at one level influence other levels Institutional logics more than strategies or

logics of action Sources of legitimacy Provide a sense of order Ontological security

Ontology d= the philosophical study of the nature of being, existence or reality in general, as well as the basic categories of being and their relations (cite)

Historical Contingency

Idea is not to develop universal theories Evaluate such theories in their time/place

context

Logics in play at one period of time may not remain in play

Logics may change over time

Agenda

Introduction and background Defining Institutional Logics Institutional Logics as Meta-Theory Institutional Logics as Method of Analysis Institutional Logics and

Individual/Organizational Action Change in Institutional Logics

Logics as a Method of Analysis Main idea:

Try to measure the effects of content, meaning, and change in institutions

Key methods Event History Methods Interpretive Methods

Archival records, Interviews, Content Analysis Ideal Types

Event History Methods

(aka. survival/duration/transition analysis)

Time series analysis Uses historical time, not organizational age Looks at how states change over time Time-constant and time-dependent events

Can accommodate data at multiple levels of analysis

Can look at which logics are having more of an impact at given periods of time

Interpretive Methods

Rich data analysis techniques Qualitative and/or quantitative

Authors suggest triangulation of both Find and interpret ‘meaning’

Ideal Types Helps understand meanings that actors

assign to their actions

Agenda

Introduction and background Defining Institutional Logics Institutional Logics as Meta-Theory Institutional Logics as Method of Analysis Institutional Logics and

Individual/Organizational Action Change in Institutional Logics

Collective Identities and Identification

Collective Identity d= The cognitive, normative and emotional connection experienced by members of a social group because of their perceived common status with other members Can also be viewed at higher levels of analysis

When they individuals identify with the collective identity, they can be influenced by it

Can be a member of several social groups (each with different identities)

Collective identities can become institutionalized into logics

Contests for Status and Power Conditioned by prevailing institutions

Logics determine how status and power are gained, maintained and lost

Logic is propagated when used by social actor in the process of competing for status and power

Classification and Categorization

Categories are a necessary component of all mindful and agentive behaviour

Social and organizational categories are determined by social institutions E.g., CEO, Return on Assets

Changes in logics lead to the creation of new categories and changes to meaning of existing categories

Attention

Emphasis on how organizational responses to stimuli are mediated by the attention of decision makers

Institutional Logics affect attention allocation Provide a set of rules and conventions

Prioritization of problems Possible solutions Linking of solutions to problems

Two mechanisms used by institutions to structure attention: Generate a set of values that order the legitimacy,

importance, and relevance of issues and solutions Provide decision makers with an understanding of

their interests and identities

Agenda

Introduction and background Defining Institutional Logics Institutional Logics as Meta-Theory Institutional Logics as Method of Analysis Institutional Logics and

Individual/Organizational Action Change in Institutional Logics

Change in Institutional Logics “How can actors change institutions if

their actions, intentions and rationality are all conditioned by the very institution they wish to change?” (Holm, 1995)

Three key mechanisms of change: Institutional Entrepreneurs Structural Overlap Event Sequencing

Antecedent/Consequence of change: Competing Institutional Logics

Institutional Entrepreneurs

Create new and/or modify old institutions Leverage resources to support their interests

May organize from the center of an existing field, or from the fringe Although Organizational Ecology would argue

that it is probably wiser to do so from the fringe Can use material and cultural resources to

justify and encourage change Rhetorical strategy (using institutional

vocabulary) Expose contradictions in logics

Structural Overlap

When individual roles and organizational structures and functions that were previously distinct are forced into association Mergers & Acquisitions

More common in organizations that bridge different organizational fields and thus have contact with multiple logics Lowers constraints and embeddedness of

actors Encourages institutional entrepreneurship

Event Sequencing

Event sequencing d= “the temporal and sequential unfolding of unique events that dislocate, rearticulate, and transform the interpretation and meaning of cultural symbols and social and economic structures” Changes in cultural schemas, shifts of resources,

emergence of new sources of power Even small changes that create discrepancies can

push the first domino Suggested ways to assess:

Nominal and Ordinal comparisons Narrative analysis

Competing Logics

NOT an explanation for change in institutional logics Antecedent or consequence of change Can facilitate resistance to institutional

change Studies have primarily looked at:

Micro: Strategies of action Macro: Institutional logic at the societal-

sector level Authors suggest that more studies

should look at multiple levels.

Major OT questions

Why do organizations exist? Why are firms the same/different? What causes changes in organizations? Why do some firms survive and others

don’t? Emerging issue?