Taking Social Construction Seriously: Extending the Discursive Approach in Institutional Theory

1. Miles A. Zachary Taking Social Construction Seriously: Extending the Discursive Approach in Institutional Theory

2. Nelson Phillips • Professor of Strategy and Organizational Behavior at Imperial College London • Research Interests: Knowledge Management, Technology Strategy, Institutional Theory, Social Entrepreneurship, Management in Cultural Industries, and International Management • NamrataMalhotra • Faculty member at Tanaka Business School at Imperial College of London • Research Interests: Organizational Change, especially within professional service organizations About the Authors

3. Early institutional works were based in the social construction of institutions “institutionalization involves the processes by which social processes, obligations, or actualities, come to take on a rulelike status in social thought and action” – Meyer & Rowan (1977: p.341) • Berger & Luckmann (1967: p.54) referred to institutions as ‘shared typifications of habituated actions by types of actors’ constructed through social interaction Brief History of Institutionalism

4. New institutional theory are critical of “rational-actor models” of organizations • Replaced with alternative theory based on individual action, stressing: • Unreflective, routine, taken-for-granted nature of humans • Actors constituted themselves by institutions • Resource dependencies New Institutional Theory

5. The authors main criticism involves a lack of definition; modern institutionalism revolves around a result rather than a process This lack of process creates a definitional problem (Zucker, 1991) ‘Taxonomic’ approach dominates modern institutionalism but ignores the process of institutionalization and the inherent meaning of institutions Criticisms of the New Institutional Perspective

6. Authors idea of the most significant differences between both involve the underlying conception of cognitive bases of institutionalized behavior • Old: organizations are institutionalized when they are ‘infused with value’ as ends themselves (Selznick, 1957) • New: the basis of institutions resides in the taken-for-granted scripts, rules, and classifications • In general, there has been a shift from institutions and how they form to the effects of institutionalization Old v. New Institutional Theory

7. Explains the creation and development of social phenomena within a social context Social construction of institutions has early philosophical roots (e.g., Veblen, 1909; Menger, 1871; Commons, 1924; Sumner, 1906) Menger (1871) acknowledged the importance of institutions, a social phenomenon Later, Selznick (1957: p.16) stated that to institutionalize is to ‘infuse with beyond the technical requirements of the task at hand’ Social Construction

8. From a social constructionist point of view, institutionalization is primarily cognitive • Rules are not externally imposed, rather are a function of social institutional processes • Their (the rules) broad acceptability makes them unavoidable • Despite an explosion of literature regarding institutional theory, the definition and processes of institutions remains ambiguous Institutionalization

9. Three (3) Pillars of Isomorphic Change within Institutions: • Cognitive • Normative • Mimetic • Authors critique this view of institutional change as a ‘distraction’ • Regard institutionalization as a taken-for-granted process DiMaggio & Powell’s Three pillars

10. What comprises an institution? • Regulatory- explicit regulatory processes—expedient and coercive action that is socially sanctioned • Normative- norms shape behavior that is socially enforced • Cultural-Cognative- based on early social constructionist thought—”the way we do things around here” • An all-inclusive framework for institionalism Scott’s typology

11. Author offers several problematic observations: • Individual differences in the ontological background of each pillar is problematic in creating a unified theory of institutionalism • The dynamics arising from the three pillars are fundamentally different • Sanctions (as presented by Scott (1995)) would serve to deinstitutionalize rather than reinforce institutional norms; Berger and Luckman (1967) regard additional enforcement mechanisms as a sign of less-than-institutional status Scott’s Typology- the critique

12. Authors offer an alternative to Scott’s (1995) explanation of institutionalism A discursive approach is “a useful theoretical and methodological approach for understanding microprocesses of institutionalization at the macro-organizational level and clarifies the cognitive nature of institutions” The Discursive Alternative

13. Discursive analysis serves to answer the question ‘where does meaning come from?’ Furthermore, it is a study of discourse and the social reality it constitutes Can never be identified in its entirety, rather it exists on a continuum Texts (which are not limited to written words) are not individually meaningful The discursive alternative

14. Discourse has a dialectic effect on action in which both are a function of the previous variable (t-n) The discursive alternative

15. Authors ask “what are the ramifications for institutional theory?” • Changing the focus of empirical research • Refocuses the processes of institutionalization itself • Reframing the symbolic v. practice debate • Discourse analysis allows a tandem view of institutionalization—both practice and symbolic • Bringing society back into the picture • Focuses on complex societal nature of institutions and institutionalization The Discursive Alternative

16. Why do organizations exist? Why are firms the same/different? What causes changes in organizations? Why do some firms survive and others don’t? Emerging issue? OT questions