Deinstitutionalization Processes

As noted, persistence of institutional beliefs and practices cannot be pre- sumed. Deinstitutionalization refers to the processes by which institutions weaken and disappear. As we would expect, some analysts emphasize primarily the depletion and increasing disuse of regulative systems, not- ing enfeebled laws, diluted sanctions, and increasing noncompliance. Others stress eroding norms and evidence of the diminished force of obligatory expectations. Still others point to the erosion of cultural beliefs and the increasing questioning of matters once taken for granted. Regardless of which elements are emphasized—of course, these ele- ments interact, and various combinations may be involved—analysts should attend to both beliefs and behaviors: to schemas and resources. Beliefs and behaviors are loosely coupled, as generations of sociologists have emphasized, but changes in our ideas and expectations put pres- sure on related activities and vice versa.

The possible causes of deinstitutionalization are multiple. As noted, Zucker (1988b) emphasizes the general phenomenon of entropy associated with “imperfect transmission” and modification of rules under the pressure of varying circumstances and the erosion of roles by the personal characteristics of occupants. Oliver (1992) describes three general types of pressures toward deinstitutionalization: functional, political, and social. Functional pressures are those that arise from per- ceived problems in performance levels associated with institutional- ized practices. For example, U.S. public schools have clearly suffered loss of legitimacy in recent years due to lower scores on standardized educational tests compared to children in comparable societies (see National Commission on Excellence in Education 1983). Reduced legitimacy allows increased consideration of alternative policies (e.g., No Child Left Behind) and approaches such as vouchers. There is an ecology of institutions, organizations, and actions. When institutional structures are determined by some important constituency to be inad- equate in the guidelines they provide, these structures are candidates for reform or replacement as problems accumulate.

Functional pressures can also arise from changing consumer prefer- ences. Kraatz and Zajac (1996) studied the effect on private liberal arts colleges of changes in student educational goals beginning in the 1970s as students became less motivated by humanistic purposes and self- fulfillment goals and more concerned with making a living and succeed- ing financially. Data from over 600 U.S. colleges during the period 1971 to 1986 revealed that, despite strong normative and cultural-cognitive commitments to the value of liberal arts programs, virtually all the schools responded to student enrollment pressures by introducing voca- tionally oriented professional programs. As expected, those more depen- dent on student tuition were more likely to add such programs, whereas the more prestigious colleges were most resistant to these changes. Kraatz and Zajac interpret their findings as demonstrating the limits of institutional arguments: In the face of changes in consumer preferences, strongly institutionalized values and their associated structures gave way to market pressures. An alternative interpretation, which I prefer, is that their study depicts the undermining (delegitimation) of one institu- tional logic—the virtues of the liberal arts—and its gradual replacement by a second—embracing market-oriented institutional logics. Deinstitui- onalization can be reframed as institutional change.

Functional demands often pit pressures emanating from the envi- ronment, which threaten the survival of the organization, against those internal constituents committed to protect the mission: the values and goals for which the organization was established. These values are, to a variable extent, “precarious,” as Michels (1915/1949) and Selznick (1949) have emphasized, and require “institutional leadership” if they are to prevail. Kraatz and colleagues (Kraatz, Ventresca, and Deng 2010) examine changes in liberal arts colleges that allowed financial criteria to invade admissions department decisions, which had been insulated from such pressures. A “mundane” administrative change created “enrollment management” departments bringing formerly autonomous departments into a conjoint decision context with the result that many colleges abandoned their previous mission of admit- ting students based primarily on their academic performance to favor those better able to meet tuition costs. Colleges resisting these changes were led by more powerful and professionalized faculty and admis- sions personnel and by longer-tenured presidents. Because of the response of such leaders, in a sample of 515 private liberal arts colleges over the period 1987 through 2006, the diffusion of enrollment manage- ment programs abated over time.

Political pressures result from shifts in interests or underlying power distributions that provide support for existing institutional arrangements. Changing voter preferences can lead to new political alignments and changing majorities in legislative groups can result in changes in regulatory legislation or enforcement practices. Thus, as discussed in Chapter 7, when the U.S. Surgeon General finally summoned the courage and political resources to “blow the whistle” on tobacco companies, although the Big Six companies responded collectively to defend themselves, all companies attempted to adapt to the new environment in a variety of individual ways (Miles 1982). The Big Six companies survived, many by diversifying into other markets. Population ecologists remind us, however, that it is impor- tant not to focus exclusive attention on the largest companies in an industry. Research by Hannan and Freeman (1989: 23–33) reports that, during the period of interest, “of the 78 companies in the U.S. tobacco business in 1956, 49 had left the industry by 1986.” About a quarter of these shifted into other business lines, but the rest failed to survive.

Business interests can lobby legislative bodies to change corpo- rate governance frameworks, as discussed in Chapter 5. As noted in our review of social movement contributions in Chapter 5, changes in the alignment of political groups can weaken  support for existing institutional settlements and provide welcome opportunities for new players and divergent interests to enter the arena. The rise of environ- mental interests during the 1960s and the responsiveness of the political establishment to the increasing demands for clear air and water led to a major shift in the institutional environment within which the petrochemical industries operated, resulting in changes in the organizational structure and strategies of these companies and the institutional logics employed by their managers, as Hoffman (1997; 1999) details (see also Chapter 7).

Social pressures are associated with differentiation of groups and increasing fragmentation of normative consensus, causing divergent or discordant beliefs and practices. In our health care study, we show how the long-term reduction in physician membership in the American Medical Association, associated with the rise of specialty associations, resulted in the weakening and fragmentation of normative consensus among physicians and, as a consequence, a disintegration of the unified voice of “American medicine” regarding health care matters (Scott, Ruef, Mendel, and Caronna 2000). The presence of multiple competing and overlapping institutional frameworks undermines the stability of each (Kraatz and Block 2008).

We are beginning to see more empirical studies of deinstitutional- ization. As might be expected, the indicators employed to assess the extent of deinstitutionalization range from weakening beliefs to aban- donment of a set of practices. Geertz (1971) describes a subtle and barely discernible pattern of deinstitutionalization underway in two Islamic societies as fundamentalist belief systems gradually loosen their hold on believers:

What is believed to be true has not changed for these people, or not changed very much. What has changed is the way in which it is believed. Where there once was faith, there now are reasons, and not very convincing ones; what once were deliverances are now hypotheses, and rather strained ones. There is not much outright skepticism around, or even much conscious hypocrisy, but there is a good deal of solemn self-deception. (p. 17)

Analyzing changes over time in the normative and cultural- cognitive conventions governing grand opera, Robinson (1985: 10) describes how the use of “two clocks”—the real-life tempo of the recita- tive as “things move along more or less as they do in real life,” in contrast to the “slow time” devoted to an aria or ensemble number— which characterized 17th- and 18th-century productions gave way to the “continuous” musical style of the 19th century. Transitional com- posers paved the way by employing, but ridiculing, earlier styles. Thus, in his opera The Barber of Seville (1816), Rossini self-consciously adhered to 18th-century conventions, but employed them to comic effect so that “one sees in Rossini an operatic convention at the very end of its artistic life: he makes fun of it; the next generation simply abandons it.”

Sine and Tolbert (2006: 7) describe an intermediate stage of deinsti- tutionalization based on changing practices. They examine a decline in the use of tenure systems in American institutions of higher education from 1965 to 1995. Although only a few colleges and universities aban- doned the tenure system, “many higher education institutions have, in the last three decades, steadily increased the number and proportion of non-tenure-track faculty positions.” The tenure institution, strongly supported by the normative structures of the teaching profession, per- sists, but its scope is narrowing so that the protections apply to ever smaller numbers of faculty members. Using data from 1989 to 1995, Sine and Tolbert show that, although there are costs, primarily labor costs, associated with compliance to the tenure system, other costs, primarily legitimacy costs, attend to reduced compliance.

Outright abandonment of an institutionalized practice represents the extreme case of deinstitutionalization. Ahmadjian and Robinson (2001) examine the gradual abandonment, by Japanese companies, of their celebrated practice of permanent employment, viewed as a cor- nerstone of their distinctive employment system (Abegglen 1958; Cole 1979; Dore 1973; Ouchi 1981). For many years during the post– World War II period, Japanese firms had an implicit contract with their mainline employees, who were given extensive in-company training, to provide them with employment until retirement. This commitment was viewed by many observers, including Cole and Ouchi, as a critical contributor to the remarkable productivity associ- ated with the Japanese industry during this period. However, under the pressure of a severe economic downturn during the 1990s, Japanese firms began to abandon their normative commitment to employees. In their examination of over 1,500 companies arrayed across diverse industries, Ahmadjian and Robinson found that, while downsizing strategies were first utilized by poorly performing companies and more slowly adopted by larger and more prestigious firms, as time passed, more and more companies abandoned the commitment to permanent employment. Over time, “social and institutional concerns gave way to economic pressures as downsizing became increasingly widespread across the population, and firms found safety in numbers” (Ahmadjian and Robinson 2001: 644). However, as was the case with the study of the dilution of the liberal arts curriculum within colleges, although economic pressures played a role in destabilizing existing practices—whether regarding curriculum or personnel practices—the changes observed do not reflect the naked play of market forces or the adaptive efforts of independent, individual organizations, as Kraatz and Zajac (1996) would have us believe, but the emergence and diffusion of a new institutional logic concerning the right way to conduct the activities in question. As Burdros (1997: 230) makes clear in his study of U.S. corporate adoption of downsizing programs, these practices are supported by beliefs espoused by neoliberal argu- ments and advanced by investment managers which have proved persuasive to many businesses, although “available research indicates that these events generally have adverse human and organizational effects” (see also Campbell and Pedersen 2001). Deinstitutionaliza- tion is associated not only with the growing recognition that current institutional patterns are ineffective, but also with the development of a challenging alternative institutional logic.

Dacin and Dacin (2008: 327) point out that “institutional processes are rarely if even completely extinguished. The practice continues albeit weaker in scope (extent of diffusion) or potency.” They note that there often exists a set of “custodians” who view it as their personal mission to perpetuate and, as necessary, reinvent the core elements of the traditions so as to ensure its continuation. Institutions, by defini- tion, are “sticky.”

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

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