BUS 374 Lecture Notes - Lecture 4: Business Insider, Servant Leadership, W. M. Keck Observatory
19 Aug 2018
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Lecture #4
▪ Why do organizations act similarly?
▪ Population ecology
o Organizations are diverse and many – population and organizational forces
o Organizations’ success is determined by different organizational and population
resulting in different amount of organizations
▪ But organizations are pretty similar
▪ What makes organizations so similar?
o Old institutionalism: government used to have a lot of control over organizations
o Weber’s iron cage of bureaucracy
▪ People were interested in making businesses be treated equally
▪ Focus on efficiency too → organizations became more homogenous
▪ Max weber explained this as the iron cage of bureaucracy
▪ Bureaucracy – important decision is made by people with authority who
need not necessarily represent people who the decisions affect
▪ Organizational rationalization – there is a rational aspect – hierarchy,
division of labor, rules and regulation etc.
▪ Why does B exist?
▪ Competition among capital firms
▪ There in increase competition among states – more rules to control
▪ Bourgeois demand for equal protection
▪ So, organization become more homogenous – because they are seeking
more efficiency
▪ (This paper suggests there are other aspects in play – not necessary
motivated by a need for increased efficiency)
▪ (This paper suggests – homogenizations happen as a result of structuration
of org fields)
▪ Their idea is – structured org field – indl eff to deal with uncertainty –
homogeneity in structure, culture and output
▪ What forces affect organizations?
o Efficiency → however, this is not that rational
o Neo-institutionalism
o Structuration and the dominant form
▪ Fields emerge
• Firms, regulatory agency, resource, and product consumer
▪ Structuration
• Interactions, emergence of structure, information exchange,
awareness
▪ Homogeneity
• Dec. that make future changes difficult, obtain legitimacy,
strategies focused on lessening diversity
• Legitimacy
o Easier to fit in than to be different
o Structuration
▪ Interactions between organizations
▪ Inter-organizational structures
▪ High information load
▪ Mutual awareness
▪ Isomorphism
o Similarity of identity of form, shape, and structure
o Constraining process that forces one unit in a population to resemble other units
that face the same set of environmental conditions
o Two kinds
▪ Competitive isomorphism
▪ Institutional isomorphism
• New institution theory
• For political power or legitimacy
o Isomorphic pressures
▪ Coercive (dependence)
• Carrier: rules, laws, sanctions
• Social basis: legally sanctioned
▪ Mimetic (uncertainty)
• Carrier: innovation visibility
• Social basis: culturally supported, conceptually correct
▪ Normative (duty, obligation)
• Carrier: Professionalism
• Social basis: morally governed
▪ Coercive isomorphism
o Mandated rules
o Legal environment
o Larger social systems → eliminate differences
o Rituals of conformity
o Technical activities and output controls
o Subsidiaries also influence
o Implicit vs. explicit
▪ Mimetic isomorphism
o Uncertainty → imitation
o Modeling other successful organizations
▪ New organizations copy old ones
o Consulting firms
▪ Ex: KPMG advises clients to do the same thing because they think it is a
good option
▪ Normative isomorphism (pressures)
o Professionalization
o Allegiance to the profession → work in firms
o Formal education
o Professional networks
o Filtering (HR practices)
o Anticipatory socialization
o When the fields become professional, organizations become similar
o Professional networks influence how organizations act
o Employees behave a certain way because they feel it is the right thing to do
▪ Normative pressures come from a group of employees
▪ Examples of contagion
o Government recognition accreditation
o Associations (trade)
o Board membership
o Career path socialization
o How something spreads in a population (DEFINITION OF CONTAGION)
o Power and politics also influence organizations decisions
▪ Motive?
o Benefits
▪ Efficiency
▪ Legitimacy
▪ Reputation
▪ Resources
▪ Organizational level factors
o Dependence: greater the dependence, higher the isomorphism
o Decentralization: greater, lesser isomorphism
o Uncertainty of resources: uncertainty of the relationship between means and ends,
greater isomorphism
o Goals: when goals are clear, lesser isomorphism
o Professionals: reliance on academic credentials or professionals? Greater
isomorphism
o Associations: participation in trade/professional associations? Greater
