3 - scope of change Flashcards
Lecture 3 Greenwood & Hinnings Tsoukas & Chia
Institutional theory
- Organizational isomorphism
- Key question institutional theory
- role environment
- A situation in which the structures of organizations across industries and countries are similar
- Why do all organizations look the same? what processes/ mechanisms cause these similarities
- environment provides templates for action, that organizations are pressured to adopt
Institutional theory
- why do organizations adopt formal structures
Formal structures increase organizational legitimacy, which increases survival
-
-
- Carriers of Coercive pressures
- Carriers of Normative pressures
- Carriers of mimetic pressures
Institutional theory:
Carriers of Coercive pressures
- (Inter)National laws
- Threat of legal cases, actual legal cases
- Law professionals
Institutional theory:
Carriers of Normative pressures
- Certification and accreditation
- News, Media, and social Media
- Professionals, e.g. HRM experts
Institutional theory:
Carriers of Mimetic pressures
- cognitive templates for action
- Scientific texts
- organizational examples
- Organizations providing data on future trends
- Professionals defining “what’s out there”
Institutionalism:
trends
- Old institutionalism
- New institutionalsim
- Neo institutionalsism
Old institutionalism
o Issues of influence
o Coalitions
o Competing values
o Power & informational structures
New institutionalism
o Legitimacy
o Embeddedness of organizational fields
o Centrality of classification, routines, scripts, and schema
Neo institutionalism
The coming together of the old and the new system
G&H - Institutional theory
- What does it explain
- Why interesting for OC
- Weak points
o Explanation of similarity and stability of organizational arrangements
o Usually not regarded as a theory of organizational change
o According to article: excellent basis for an account of change
- Provides convincing definition of radical change - Signals the contextual dynamics that precipitate the need for change
o Weak in analyzing internal dynamics of organizational change. Therefore silent why some organizations adopt radical change and others do not, under the same pressures
G&H - Radical organizational change
o Also known as “frame bending”
o Busting loose from an existing orientation
o Transformation of the organization
o Change between templates
G&H - Convergent organizational change
o Finetuning the existing orientation
o Change within template
G&H - Evolutionary change
Slow and graduate pace of upheaval and adjustment
G&H - Revolutionary change
Swift pace, affects almost all parts of the organization
G&H - Interpretive scheme
- Ideas, Beliefs and Values provide the pattern of organization’s structure and systems
G&H - Structure of the institutional context:
When is change radical
- the tightness of coupling,
- the sectoral permeabilitry
- Tight coupled institutional fields has less radical change, when it does it is revolutionary
- Loosely coupled fields have more radical change, and is evolutionary
- Fields closed or not exposed to other fields (impermeable) have low rates of radical change, and is revolutionary
- Permeable fields have higher radical change rates, and it’s evolutionary
G&H - Framework for understanding organizational change
- Exogenous dynamics: market- and institutional context
- Endogenous dynamics: interest dissatisfaction, value commitments, power dependencies, capacity for action
- Output of the model would become input for exogenous dynamics
G&H - Precipitating & Enabling dynamics
Precipitating dynamics: causes or triggers the start of change
- Interest dissatisfaction
- Value commitments
Enabling dynamics: makes the change possible
- Power dependencies
- Capacity for action
G&H - Pattern of value commitments
- Status quo commitment: all groups are committed to the prevailing institutionalized template in use
- Indifferent commitment: groups are neither committed nor opposed to the template in use
- Competitive commitment: some groups support the template in use, others prefer an alternative
- Reformative commitment: All groups opposed to the template in use
G&H - Precipitating dynamics and radical change
o Radical change will occur if the pattern of value commitments is competitive or reformative, irrespective of context
o Interest dissatisfaction will lead to radical change only in it is associated with competitive or reformative value commitments. Otherwise convergent change
o Reformative or competitive pattern of value commitments are more likely to occur in peripheral rather the core organizations, organizations with a complex portfolio of products/services, loosely structured institutional contexts
o Reformative commitment > revolutionary change
o Competitive commitment > evolutionary change
G&H - Power dependencies
- Favorable power dependencies are used to promote own interests
- Operation of values and interests can be conceptualized and understood in relation to the differential power of groups, reciprocal relationship between the two
- Templates give power to some groups and not to other groups, therefore people in power often promote the template
- In a situation with competitive commitment, radical change is unless people in positions of power are in favor of change or dominant group recognizes the weakness of current template
- Radical change will only occur with an enabling pattern of power dependencies, combined with reformative or competitive value commitment pattern
- Market pressure influences power dependencies
- Institutional context influences power dependencies, not necessarily consistent with market pressures
G&H - Capacity for action
- What is it?
- Three aspects of capacity for action
- How does it affect change
- The ability to manage the transition process from one template to another.
1 Understanding of the new conceptual destination
2 Having the Skills and competencies to function in the new destination
3 The ability to manage how to get to the new destination
- Recent experience with changes increases capacity
for action - It’s an enabling mechanic. Without it no radical
change, by itself no motive for change - High capacity for action is positively associated
with revolutionary change and negatively associated
with evolutionary change
From what perspective does G&H view organizations?
System perspective: (Organizations resemble machines (simple) or natural organisms (complex) that adapt to their environment)
