1. Differentiating Levels
One of the principal ways in which the several varieties of institu- tional theory differ is in the level at which they are applied. The recognition of varying levels is particularly important for institutional scholars who argue that the wider contexts within which social events occur, not simply their immediate circumstances, are of utmost import in explaining these events. Differentiation among types of contexts helps to specify these cross-level arguments.
While the notion of levels is both familiar and useful, the metaphor has a materialist flavor. It can encourage investigators to take social boundaries too seriously and may obscure one of the central insights associated with institutional analysis: Order is often created by shared meanings rather than by physical or material causes. Thus, it is over- simplifying, if not misleading, to describe nation-states or organiza- tions or their participants as if they were operating independently of institutional systems at other levels. The levels that we define and circumscribe are open systems. The systems are porous in the sense that activities and meanings occurring on one level are often linked to and activate activities and meanings at other levels. Analysts employing the levels distinction should be mindful of the ways in which it can enable, but also distort, our attempt to understand the nature of the processes at work.
In defining levels, the key underlying dimension is the scope of the phenomena encompassed, whether measured in terms of space, time, or numbers of persons affected. For institutions, level may be usefully operationalized as the range of jurisdiction of the institu- tional form. Given the complexity and variety of social phenomena, any particular set of distinctions among levels is somewhat arbi- trary. Nevertheless, for our purposes, it is useful to identify six categories: the levels of world system, society, organization field, organizational population, organization, and organizational subsystem (see Figure 4.1).
Most of these levels are widely employed and recognizable to social analysts; all are of interest to students of organizations. In institutional scholarship during the modern period (since the 1970s), the more macrolevels have received the lion’s share of atten- tion, but during the past decade, this imbalance is being addressed: More analysts are examining microlevel processes (Elsbach 2002; Fiol 2002; Powell and Colyvas 2008; Zilber 2002). Let’s briefly review each level:
- The world system level is also meant to encompass work at the “global,” “international,” and “transnational” levels: scholar- ship that examines structures and processes occurring cross- societally and over longer periods of time. The early work of Wallerstein (1974) on world systems has been supplemented by the work of Meyer and colleagues on world society (Drori et al. 2006) and has recently been joined by that of a growing number of international business scholars (e.g., Peng 2003).
Figure 4.1 Institutional Pillars and Varying Levels: Illustrative Schools
- The society level focuses on structures and processes pertaining to societies or nation-states. Social theorists such as Sorokin (1937–1941) and Parsons (1951) pioneered these approaches, which have long been the province of political sociologists (Skocpol 1985) and political scientists (Dahl and Lindblom 1953; March and Olsen 1984).
- Perhaps the least familiar, yet a level of great significance to institutional theory, is that of the organization field, a level that identifies a collection of diverse, interdependent organizations that participate in a common meaning system (DiMaggio and Powell 1983; Scott and Meyer 1983; see also Chapter 8).
- Another level of analysis somewhat distinctive to organizational research and often employed in institutional studies is that of the Organizational populations are defined as a collec- tion or aggregate of organizations that are “alike in some respect,” in particular to “classes of organizations that are rela- tively homogeneous in terms of environmental vulnerability” (Hannan and Freeman 1977: 934; see also Hannan and Freeman 1989). Newspaper companies and trade unions are examples of organizational populations.
- Not surprisingly, organization-level studies were among the first to appear in early work on institutions and organizations, as pioneered by Selznick (1949; 1957) and his In this work, institutional processes operating at the level of a specific organization are the focus of attention. Early work has been supplemented by later work on “organization culture” (Kunda 1992; Martin 2002).
- Work focusing on organizational subsystems, or component units of organizations such as departments or teams, was pioneered by industrial relations scholars such as Roethlisberger and Dickson (1939) and Seashore (1954) and has been continued and extended by students of work and organization such as Barley (1986), Heimer (1999), and Kellogg (2011). It has become an increasingly common focus of institutional
To reiterate, all six levels are of interest to those who study organi- zations. As with the notion of carriers, the levels distinction is orthogo- nal to and can be cross-classified with the set of institutional elements.
2. Levels and Pillars: Illustrative Studies
Beginning with scholars examining the operation of regulative pro- cesses at differing levels, working at the trans-societal level, North and Thomas (1973) examined how the institution of property rights and associated state regulatory apparati developed in the Western world during the 15th through the 17th centuries. At the societal level, Skocpol (1979) examined differences in the organization and operation of the state as it affected the course of revolutions occurring in France, Russia, and China. Working at the organization field level, Guthrie and Roth (1999) examined the dynamic interaction of state institutions and employers regarding the development of maternity leave policies for employees. At the organization population level, Barnett and Carroll (1993) studied the effects on the development of early telephone companies of various regulatory policies pursued by state and federal authorities. Focusing on the organization level, Williamson (1975; 1985; 1991) developed his markets and hierarchies framework to explain the emergence of varying types of organizational forms to govern and reduce the costs of economic transactions at the level of the firm. And examining organization subsystems, Shepsle and Weingast (1987) studied the institutional foundations of committee power in Congress. Turning to theorists emphasizing normative elements, Brunsson and Jacobsson (2000) examined the construction of “standards” (normative frameworks) at the transnational level by professional associations and international nongovernmental organization, while Tate (2001) detailed the continuing persistence of varying standards at the national level. Parsons (1956/1960b) described differences in value systems and nor- mative frameworks at the societal level and their consequences for organizations. At the organization field level, Mezias (1990) studied changes in normative beliefs regarding financial reporting require- ments for corporations occasioned by the actions of state agents and professional accounting societies, and Stern (1979) and Starr (1982) examined the effects of the rules and conventions promulgated by trade and professional associations on organization fields, specifically college athletics and medicine. Singh, Tucker, and House (1986) exam- ined the effects on survival rates in a population of voluntary social service organizations of being certified by public agencies. At the orga- nization level, Selznick (1949) studied the ways in which procedural requirements became “infused with value” in the Tennessee Valley Authority. And at the organization subsystem level, Roy (1952) and Burawoy (1979) examined the institutionalization of normative frame- works regarding production and restriction of output among workers in a machine shop of a manufacturing plant (see also Burawoy and
Verdery 1999).
Among those scholars examining cultural-cognitive aspects of insti- tutional processes, Meyer and colleagues (Drori et al. 2006) examined cultural processes operating at the transnational level giving rise to organizations and shaping organization structures and processes in a wide variety of contexts. Dobbin (1994b) studied the varying cultural belief systems that undergirded societal policies affecting the construc- tion of railway systems in the United States, England, and France. Working at the level of the organization field, researchers such as Deephouse (1996) and Hoffman (1997) employed discourse analysis and other types of content analytic techniques to assess meaning sys- tems in banking and corporate environmentalism. Examining organi- zation populations, Carroll and Hannan (1989) employed data on the density or prevalence of newspapers—viewed as an indicator of the taken-for-grantedness of this form—to examine its effects on the growth rates of newspapers in selected U.S. cities. At the organization level, Clark (1970) examined the distinctive cultural values cultivated by a set of elite colleges and their effects on organizational viability, whereas Kunda (1992) studied the “engineering culture” of a high-tech company. Zimmerman (1969), working at the subsystem level, described the development of typifications and shared interpretations among intake work in a social welfare agency.
3. Cross-Level Analyses
Some of the most important types of institutional research involves multiple levels, as investigators work to show the effects of conditions or events at one level on actors and actions at a lower level. For many theorists the core thesis of an institutional perspective is that the behavior of actors—whether individual or collective—is not to be attributed to their characteristics or motives but to the con- text within which they act (Schneiberg and Clemens 2006). For exam- ple, in their research on rationalizing processes at the world system level, Meyer and colleagues (Drori et al. 2006; Meyer, Boli, Thomas, and Ramirez 1997) employ historical and comparative research to show that the basic structures, policies, and program adopted by societies is primarily predicted not by their domestic demographic or economic characteristics but rather by events occurring at the world system level and the nature and strength of a society’s connections to this system. Similarly, many studies by institutional scholars of orga- nizations are designed to show how that organization’s structure and behavior are shaped, variously, by its relation to the nation-state or society, the organizational population to which it belongs, or its loca- tion in and connections to the organization field in which it operates. Much of the research reviewed in subsequent chapters reports the findings of such cross-level approaches.
4. Levels and Pillars: Illustrative Schools
More generally, as illustrated in Figure 4.1, it is possible to associ- ate various schools or types of work with different locations in the property space created by the cross-classification of pillars and levels. Most of the institutional work conducted by sociologists in the recent period is guided by the combination of a cultural-cognitive emphasis and attention to the macro- and cross-levels: processes operating at transorganizational, societal, and field levels. Moreover, this work stresses cultural elements—widespread beliefs, conventions, and professional knowledge systems—but also attends to the impact of macrostructural carriers such as international organizations, the state, and trade and professional associations.
Organizational ecologists have directed attention to the organiza- tional population level of analysis, and in their recent work have appropriated institutional arguments to account for important features of the density dynamics of organizational populations. The familiar slow take-off and then more rapid growth rate of a specified organiza- tion population has been interpreted by Carroll and Hannan (1989) as reflecting the increasing cognitive legitimacy of a particular template or archetype for organizing this type of work (see Chapter 6). (Popula- tion ecologists also attend to noninstitutional processes, such as competition for scarce resources.)
Attention to cognitive elements at the organization or organiza- tional subsystem level was pioneered by ethnomethodologists and has been continued by students of corporate culture (see Martin 1992; Trice and Beyer 1993). Ethnomethodologists, along with some evolu- tionary economists, focus on habits and skills and so attend more closely to activities as carriers of scripts and schema at the organiza- tional and suborganizational levels (see Barley 1986). Those who examine corporate culture, of course, give primacy to carriers of symbolic systems.
The traditional institutional approach in sociology—work asso- ciated with Becker, Hughes, Parsons, and Selznick—is defined by a focus on normative elements and attention to levels ranging from the individual organization to the society. This mode of analysis is very much alive and well and continues to be emphasized by such scholars as Brint and Karabel (1991) and Padgett and Ansell (1993). Both symbolic and relational carriers are emphasized in this approach.
Economists and rational choice political scientists are most likely to emphasize the regulative view of institutions. Economic historians focus on the macrolevels, examining the origins and functions of trans- national regimes, national rules, and enforcement mechanisms that are developed to regulate economic behavior of firms and individuals. Historical institutionalists in both sociology and political science emphasize the study of regulatory regimes and governance mecha- nisms that operate at the societal and industry levels. The new institu- tionalists in economics, along with the rational choice theorists in political science, focus primarily on regulatory processes operating at the organizational or suborganizational level. The economic historians and historical institutionalists emphasize symbolic and relational carri- ers, whereas the new institutional economists emphasize primarily relational carriers.
We discover, then, substantial differences among current schools aligned with the new institutionalism. Organizational sociologists pur- suing this line of work emphasize a cultural-cognitive conception, symbolic carriers, and macro- and cross-level forces. By contrast, neo- institutional economists and most political scientists stress a regulative conception, relational carriers, and a microfocus. Rather different perspectives to be sharing the same label!
Source: Scott Richard (2013), Institutions and Organizations: Ideas, Interests, and Identities, SAGE Publications, Inc; Fourth edition.