Crafting an Analytic Framework: Institutional Logics and Organizations

1. Rationalized Models

Institutions of one type or another can be traced back to the earli- est stages of the history of humankind, whereas organizations as we know them are a relatively recent development. Clearly, then, not any and all institutional frameworks are conducive to organizational growth and sustenance. Numerous social theorists have attempted to specify what types of institutional logics are likely to give rise to formal organizations.1

Early views placed emphasis on regulatory and normative struc- tures. Weber (1924/1968, Vol. 1: 24; Vol. 2: 953–954) stressed the emer- gence of a “legal order” consisting of a “system of consciously made rational rules” that support “instrumentally rational” action. Parsons (1951; Parsons, Bales, and Shils 1953) devoted much attention to detail- ing the value orientations and normative systems that support the development of more instrumental and impersonal social forms. His typology of “pattern variables”—basic value dimensions giving rise to different kinds of action orientations and supporting structures— identified universalism (vs. particularism), affective neutrality (vs. affec- tivity), achievement (vs. ascription), and specificity (vs. diffuseness) as normative orientations conducive to the rise of organizations.

Later theorists emphasized the cultural-cognitive systems supporting organizations. Ellul (1954/1964) noted the emergence of a “technicist” mentality, which encourages analytic approaches and the development of systematic, instrumental rules to pursue specific objectives. Berger and colleagues (Berger, Berger, and Kellner 1973) described the novel states of consciousness that accompany the emergence of technology and bureaucracy, including “mechanisticity,” “reproducibility,” “orderliness,” and “predictability.” Meyer (1983: 265–267) depicted the cultural elements (“rational myths”) that underlie the creation of formal organi- zations as including “definable purposes,” “culturally defined means- ends relationships or technologies,” viewing things and people as “resources,” and presuming the existence of a “unified sovereign” that gives coherence to collective actors.

What all of these arguments have in common is that they embody a rationalized conception of the world. Purposes are specified and then rule-like principles are devised to govern activities aimed at their pursuit. Rationalization involves “the creation of cultural schemes defining means-ends relationships and standardizing systems of con- trol over activities and actors” (Scott and Meyer 1994: 3). Some of the principles, as in the “laws of mechanics,” have an empirical base, whereas others, as in legal frameworks, are rooted in a consistent logical or philosophical structure. All such rationalized beliefs support the rise of organizations.

Institutional scholars argue that rationalization also entails the creation of entities—identifiable social units—endowed with interests and having the capacity to take action. These are products of the con- stitutive aspects of institutions that were discussed in Chapter 3. In the modern world, commencing with social processes associated with the Enlightenment, three primary categories of actors have been accorded primacy: individuals, organizations, and societies, the latter in the guise of the nation-state (see Meyer, Boli, and Thomas 1987). James S. Coleman (1974; 1990: Ch. 20) provided a valuable historical-analytical account of the emergence of organizations as significant collective actors accorded legal rights, capacities, and resources independent of those held by their individual participants.2 Coleman views changes in the law not as causal factors, but as significant indicators of the growing independence of these new corporate forms as they became recognized as legal persons in the eyes of the law. Pedersen and Dobbin (1997) suggest that this process was fueled primarily by the growth of a scientific ethos that created abstract and general categories to classify and enumerate first the biological and physical universe and subse- quently the social world. The rapid advance of commensuration—“the measurement of characteristics normally represented by different units according to a common metric” (Espeland and Stevens 1998: 315)— allowed the categorization and counting of all manner of material and social objects.

Professionals, initially from the engineering sciences (Shenhav 1995, 1999), attempted to tame the exotic, multiple, idiosyncratic instances of enterprise and fostered the emergence of, on the one hand, the generic category “organization” accompanied by its universal handmaiden “management” and, on the other hand, the differentiation of recognizable subtypes (e.g., schools, hospitals, public agencies, non- profit and for-profit corporations). The development of such templates or archetypes and the specification of their structural characteristics, utilities, capabilities, and identities has taken place over many years but, once established, they provide cultural models for the rapid mold- ing of other similar forms. This professional project—treating all man- ner of collectivities as part of a more generic form “organization” and identifying meaningful subtypes—was later embraced and, necessar- ily, reinforced by the emergence in the mid-20th century of an academic discipline devoted to the pursuit of organizational studies. In short, you and I are part of this process!

Increasingly in modern societies, the belief grows that organiza- tions are indispensable tools for concerted action. As Parsons (1956/1960a: 41) observed over a half century ago, “the development of organizations is the principal mechanism by which, in a highly dif- ferentiated society, it is possible to ‘get things done,’ to achieve goals beyond the reach of the individual.” Meyer and colleagues concur:

Whether in the public or private arena and in any social sector or industry, organization is possible and desirable. Empowered and rational people can be brought together in a managed and rational- ized structure to take purposive collective action on many fronts in a scientized environment. (Meyer, Drori and Hwang 2006: 25)

2. Institutional Logics: Alternative Rationalized Models

Meyer and colleagues develop their arguments regarding the ratio- nalizing power of cultural schemes at a very broad, world-system level considering the constitutive processes creating individuals, organiza- tions, and nation-states. They depict the relentless trajectory of mod- ernization forces during the past 300 years across all societies and sectors. However, a more complex and nuanced view of cultural schema has been developed by Alford and Friedland (1985; Friedland and Alford 1991). While they accept the importance of differentiating between individual, organization, and societal levels, they view the societal level as a complex pattern of “interinstitutional relations,” encompass- ing a multiplicity of value spheres, each associated with a distinctive “institutional logic.” They define institutional logic as “a set of material practices and symbolic constructions which constitutes its organizing principles and which is available to organizations and individuals to elaborate” (Friedland and Alford 1991: 248). They point to such vary- ing societal logics as “capitalism,” with its emphasis on commodifica- tion of human activity and accumulation; “democracy,” with its stress on equality and participation; “family,” with its stress on unconditional loyalty; and “religion,” with its attention to epistemological, eschato- logical, and ethical matters. Each logic is associated with a distinctive mode of rationalization—defining the appropriate relation between subjects, practices, and objects.

Thornton and colleagues (Thornton, Ocasio, and Lounsbury 2012) have pursued and elaborated this perspective, employing the concept of institutional logics to identity a specific set of models for motivating and organizing social arenas or societal subsystems. These models differ in a number of respects, including their “root metaphor,” their sources of legitimacy and authority, and the types of norms and control mecha- nisms employed (Thornton and Ocasio 2008; Thornton et al. 2012: 54–56). The major types of rationalized institutional logics they identify are the family, religion, state, market, profession, corporation, and com- munity. Many of the most important tensions and change dynamics observed in contemporary organizations and organization fields can be fruitfully examined by considering the competition and struggle among various categories of actors committed to contrasting institu- tional logics. Thus, many critics and would-be reformers of the state seek to introduce market logics or corporate managerial forms in order to improve its efficiency and accountability (Christensen and Laegreid 2001; Salamon 2002). And many organizations long operating under a professional partnership mode have been invaded by corporate prac- tices and subjected to greater market controls (Greenwood and Suddaby 2006; Scott, Ruef, Mendel, and Caronna 2000; Thornton 2004; Thornton, Jones, and Kury 2005). Even corporations find themselves increasingly “managed by the markets,” slavishly responding to finan- cially based assessments of quarterly performance (Davis 2009). Others address the conflicts between church and state (Wuthnow 2005), and between family and corporate logics (England and Farkas 1986). In short, an important source of the institutional tension and change expe- rienced by both organizations and individuals in everyday life involves jurisdictional disputes among the various institutional logics. These and related change processes associated with competing institutional logics are discussed in more detail in Chapters 6 and 8.

3. Differences in Time and Space

The socially constructed characteristics of both persons and collec- tive actors, such as firms, vary over time and place as do the expected relations among firms and between firms and the state (see Berger and Huntington 2002; Hall and Soskice 2001a; 2001b; Hollingsworth and Boyer 1997; Whitley 1999). Institutional rules in the West have accorded greater individual autonomy and independence to social actors—both persons and firms—than have related rules in East Asian societies. Thus, although “the United States has institutionalized com- petitive individualism in its market structure,” and most European countries have developed a somewhat more “concerted” version of industry structures, Asian economies “are organized through networks of [interdependent and less autonomous] economic actors that are believed to be natural and appropriate to economic development” (Biggart and Hamilton 1992: 472). Relations among persons or firms that Western eyes view as involving nepotism or collusion seem, by Eastern observers, normal, inevitable, and beneficial. Theoretical per- spectives vary greatly in the extent to which they attend to differences among organizations and ways of organizing. Child (2000) contrasts what he terms “low context” perspectives, such as neoclassical eco- nomic theory and psychological universalism, with “high context” paradigms, such as cultural theory and institutional theory. The former minimize the impact of cultural and institutional differences and point to a convergence among forms over time (e.g., globalization erasing cultural differences), while the latter “share the strong presumption that management and organization will retain and develop its own distinct characteristics that derive from cultural preferences and embedded institutions” (p. 37).

In general, regulative and normative theorists give more attention to the examination of regulative rules, treating constitutive rules as background conditions. Thus, for example, neoinstitutionalist econo- mists and rational choice political scientists inquire into the activities of a firm or agency and consider what kinds of structural arrangements or procedures are associated with specified behaviors, such as improved productivity or the passage of legislation. By contrast, economic histo- rians and historical political scientists give much more attention to the origin of general types of social actors (e.g., “jobber, importer, factor, broker, and the commission agent”; Chandler 1977: 27), organizational archetypes (e.g., joint-stock companies, multidivisional and conglom- erate firms), or changes in property or political rights (Campbell and Lindberg 1990). Similarly, neoinstitutional sociologists are more apt to focus on changes over time in the types of actors involved or the cultural rules establishing the logics of practice within a particular organizational context (e.g., Fligstein 1990; Schneiberg 2002; Scott et al. 2000). Scholars attending to constitutive rules insist that much of the coherence of social life is due to the creation of categories of social actors, both individual and collective, and associated ways of acting.

Source: Scott Richard (2013), Institutions and Organizations: Ideas, Interests, and Identities, SAGE Publications, Inc; Fourth edition.

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