Notes for Institutional Theory

The aim of this essay is to look the response of organisations when confronting with institutional pressures. The essay is organised as follow. Firstly, slightly concepts as well as explanation related to institutional theory bequeath be introduced. Then, this essay will localize and explain the conception of genuineness and the connection between genuineness and institutional process. Thirdly, the strategic responses of organisations to deal with the pressures from institutional process and an example of response in terms of institutional restrict will be examined.Institutional theory is a concept that emphasizes the beingness of some norms, values and beliefs of the society which organisations conform with. And the process of conformity called institutionalisation is reflected in the structures and practices of organisations (Powell &038 DiMaggio, 1991). correspond to Oliver (1991), institutional theory emphasizes more specifically on the pressures and constraints from th e institutional purlieu which is one of its two issues addressed (the other one is technical pressures). Institutions here(predicate) include the state, professions, interest group as well as globe opinion (Scott, 1987b).These institutions suck up interconnected and interdependent relationships with organisations, as the behaviours of organisation atomic number 18 restricted by outside pressures exerted by institutions. In order to survive, organisations have to force themselves to adapt to the environment. So, they have no other choice merely to make their behaviours consistent with orthogonal norms and rules. After discussing the environment perspective of institutional theory, the following section will regard motives of conformity as the render of departure.Institutional theory demonstrates that stability and legitimacy is what organisations to attain (Powell &038 DiMaggio, 1983 Oliver, 1991). In terms of causeing stability, institutional theory can explain why organis ations conform to remote rules, norms and beliefs, non because of the direct link to a positive outcome but organisations would be unthinkable to do otherwise. In other words, this consistency may not be driven by the objective of interest maximisation, but by preconscious acceptance of institutionalisation.Uniform rules, norms and beliefs produce less contradiction Oliver (1991). Due to attempt to obtain stability, organisations would alike(p) to draw experience from pre-existing audiences within the current external environment and imitate those organisational structures, decision-making mode and so on to response to the external pressures. Before regarding obtaining legitimacy as the other motive of conformity, it is necessary to define the concept of legitimacy. There are many different definitions of legitimacy with variable levels of specificity (Suchman, 1995).Legitimacy refers to an array of established cultural accounts made by organisations to provide explanations fo r its existence (Powell &038 DiMaggio, 1991). Another specific definition is that legitimacy is a generalized learning that the actions of an entity are desirable, proper, or appropriate within some socially constructed frame of norms, values, and beliefs. In addition, there are three types of legitimacy, which are pragmatic legitimacy, lesson legitimacy and cognitive legitimacy (Suchman, 1995). After explaining some conception of legitimacy, the next section will focus on the connection between legitimacy and institutional process.As every parts of organisation is constructed and interpenetrated by external institutions as well as culture can determine how the organization is built, how it is run, and, simultaneously, how it is silent and evaluated, legitimacy empowers organizations by making them seem natural and meaningful. So legitimacy is critical to organisation survival. Then it can also imply the easiest approaching to gain legitimacy, which suggests organisations to ad apt to the existed institutional context and adjust their structures to fit with the existed norms, rules and beliefs.This superman is just consistent with the emphasis of the institutional theory. So gaining legitimacy is a more significant reason why organisations accept institutional process. When confronting with institutional pressures, acquiescence will be the most probable response taken by organisations. However, if anticipated legitimacy is low, organisations may have different responses to institutionalisation, like compromising on the requirements for conformity, avoiding the conditions that make conformity necessary, denying the requirements that are advised to conform, or even manipulate the criteria of conformity.As can be seen, there are cardinal kinds of strategic responses that organisations may conduct to institutional process, which are acquiescence, compromise, avoid, defy and manipulate(Oliver, 1991). Organisations may have different responses to variable cau se, control, context, constituents and content and to even different degree of the same issue. For example, in the terms of institutional control, legal coercion or government mandates and voluntary diffusion are two processes pressures exerted to organisations (Powell &038 DiMaggio, 1983 Oliver, 1991).