In this review article, we reflect upon recent developments in institutional theory with particular emphasis on first, how organizational fields have been conceived and second, on how action has been conceptualized and incorporated into institutional accounts. We show that progress has been made in regard to our understanding of field level processes and the role of institutional actors. However, we also identify a number of weaknesses and challenges, which we assess in the context of developing a relational approach to institutional analysis.
In this review article we concentrate our attention on developments in the largely North American literature on institutional processes that has derived from DiMaggio and Powell's (1983) article outlining institutional pressures in organizational fields.1 The concept of an organizational field ‘connotes the existence of a community of organizations that partakes of a common meaning system and whose participants interact more frequently and fatefully with one another than with actors outside of the field’ (Scott, 1994, pp.207–8). In this formulation, institutional theory offers insights into the continuity and conformity of organizational practices through an appreciation of organizational field-level processes. Institutions are conceived as ‘multifaceted, durable social structures, made up of symbolic elements, social activities and material resources’ that enable or impose limitations on the scope for human agency by creating legal, moral and cultural boundaries (Scott, 2001, p. 49). The sanctioning power of rules and regulations, the stabilizing influence of dominant social beliefs and norms and the social construction of shared frameworks of meaning, offer the means to explain social conformity and field-level cohesion. Institutional studies infer that organizational behaviours grow to become routinized because such social norms, rules and meanings become largely taken-for-granted. Interest in routinization is not, however, based on developing a better sense of organizational efficiency (see Nelson & Winter, 1982), but indicates the way routines facilitate exchanges among members of an organization (Friedland & Alford, 1991; Zucker, 1988).
Given such tendencies much initial work assumed that institutions, once formed, would remain stable unless other interested actors mobilized to change them (DiMaggio, 1988). While these ideas and associated assumptions about the nature of social systems are themselves deeply embedded in the field of institutional analysis they have been the subject of increasing criticism. In particular, the assumption of continuity and stability has been critiqued, leading to a widespread interest in ‘institutional entrepreneurship’ (Beckert, 1999; Dorado, 2005; Greenwood & Suddaby, 2006; Seo & Creed, 2002). In this review article, we reflect upon recent developments in institutional theory with particular emphasis on first, how organizational fields have been conceived and second, on how action has been conceptualized and incorporated into institutional accounts. In this regard we argue that a more holistic approach to field level processes and a re-engagement with the role of agency and interest during field reproduction has precipitated a re-appraisal of institutional processes (see Hirsch & Lounsbury, 1997; Lawrence & Suddaby, 2006). However, we also argue that despite the considerable progress that has been made in regard to our understanding of both field level processes and the role of institutional actors there remain several weaknesses and challenges.
Early work on organizational fields reflected an assumption that fields may be treated as ‘entities’ or systems in a way that has led to a preponderance of overly structural and contingent accounts. In addition, the literature has tended to concentrate attention on one aspect of field level development and change to the detriment of a more holistic understanding of the inter-relationships between key dimensions. These weaknesses have only partially been addressed by a largely separate line of theorizing around institutional entrepreneurship that has sought to address perceived failings in the treatment of actors and agency in earlier studies. This has concentrated on actors as change agents and has placed undue emphasis on processes of institutional change (see DiMaggio, 1991) resulting in an enduring failure to engage meaningfully with the significance of action in maintaining institutional conditions.
Much of the work on institutional change has been based on process models that tend to reinforce an appearance of institutional change as mechanistic and contingent (for a review of the literature see Van de Ven & Hargrave, 2004). This work also relied upon a punctuated equilibrium model of change (Abernathy & Clark, 1985; Tushman & Anderson, 1988; Tushman & Romanelli, 1985). This has closed down the space for a thoroughgoing treatment of agency in relation to both change and continuity. Conversely, work at the micro level has struggled to locate and embed agency in the wider institutional and organizational contexts (see Mutch, Delbridge, & Ventrescu, 2006).
It is within this context that recent developments in institutional research have moved towards incorporating a dynamic representation of the constitution and maintenance of institutions that reveals growing interest in the role of agency during social reproduction. As Lawrence and Suddaby (2006, p. 216) argue in their conceptualization of ‘institutional work’, ‘[a]long with understanding the processes through which institutions affect organizational action, research has become increasingly concerned with the effects of individual and organizational action on institutions’. This work remains at a relatively early stage of development. The key challenge is in finding ways to theorize and incorporate understanding of action and, in turn, its complex inter-relationship with both specific institutions and wider social structures.
This review article proceeds by first assessing the treatment of organizational fields. This has been strongly influenced by structural contingency arguments which have been limited in the extent to which they engage with the inter-relational aspects of field level dynamics. Interest in the relational characteristics of field-level processes leads to a consideration of how agency has been treated in institutional studies. We reflect on how an emphasis on entrepreneurship has shaped the development of the literature giving primacy to change and underestimating the action associated with conformity (Zucker, 1988). In the final section of this review article we outline the potential value of a relational approach that draws on the work of Mustafa Emirbayer who has championed “relational sociology” to better understand social actors, their actions and inherent embeddedness in their social contexts. Concern with how institutions at varying levels of social aggregation are both maintained and changed requires evaluative schema that allow the assessment of micro level interactions and how these are informed and shaped by the social ties, discourses, symbols and material resources of the specific institutional domain. Drawing on Emirbayer's work on relational sociology and his refinement and development of agency (Emirbayer, 1997; Emirbayer & Mische, 1998), we suggest such a framework. Recent work in institutional theory has begun to recognize the value of these ideas but their application remains under-developed.
