January 25, 2012 § Leave a comment
Pfeffer and Salancik (78) define resource dependence as the ability to control critical resources.
Resource dependencies create situations where external forces control an organization.
Power is assumed to be the opposite of dependence.
Grandori (87) suggests that analysts use perception of goals to determine the type of theoretical perspective.
The resource dependence model should be adopted when there are multiple conflicting objectives of interest groups.
Power is relational, situational and reciprocal not just individual but a social relation property.
Power is a function of dependence, a product of structure and individual characteristics.
Natural systems such as resource dependence emphasize informal power structures.
Power is a function of the exchange relationship and varies by situation.
In zero-sum situation one party gains power and the other loses, however in a bigger pie situation overall power increases through interdependence via bridging strategies.
Symbiotic interdependence is the exchange of unlike resources and power is created as the importance of the exchange increases between groups.
Competitive interdependence causes two groups to compete for the same resources of a third party (Scott 03). Exchange theories are applicable among various resources and levels ranging from individuals to orgs.
Individuals seek to maintain power greater than dependence or else seek out a coalition (Thompson 67).
Thompson (67) introduced the power-dependency model, followed by Walmsley and Zald’s (70;73) political economy model.
Pfeffer and Salancik’s (78) resource dependency model proposes that orgs exchange resources with the environment as a condition for survival.
The need for resource acquisition creates dependencies between orgs that cause political problems requiring political solutions.
Orgs adapt and increase chances for survival if managers can acquire resources without dependencies that reduce power.
Dimension affecting dependence are munificence-scarcity, concentration-disperson, and coordination-non-cordination. Organizations can manage their task environment through buffering or bridging strategies.
Buffering protects the technical core from environmental disturbances through coding, stockpiling, leveling, forecasting and adjusting scale.
Bridging creates flexible boundaries through bargaining, contracting, co-optation, hierarchical contracts, mergers, joint ventures, associations, and government connections.
Bridging strategies are the most common solution to interdependence problems (Pfeff Salancick 78).
Mergers are when two orgs combine and vertical integration is a merger of firms at different stages of the production process (Pfeff 72).
Joint ventures are when two or more firms pursue a common interest and require less pooling of resources and usually occur when competition is high and event horizons are short.
However, the definitional operational activities either spatial, temporal or the outcome of interaction frequency makes joint venturing difficult.
Resource dependency theorists stress that orgs have coalitions of interests apart from the personal goals of those in power.
Weber’s (68) bureaucratic structures are ideal types of rational structures and Crozier’s (64) normative perspective focuses on the progressive acceptance of discretion away from intentions towards abuse of power.
Both bureaucratic and normative perspectives are functional approaches with resource dependence effects.
Functions of establishing culture, norms and legitimacy are not defined economically but organizationally.
Brown’s (78) political cultural model focuses on power from a framework that defines meaning of actions and decisions similar to symbolic management and neo-institutionalism (Pfeff Sal 78, M&R 77; P&D 91)
January 19, 2012 § Leave a comment
Institutional theory examines the conventional, standardized patterns of behavior or states of being in and across organizations and taken-for-granted beliefs that arise within and across organizational groups and delimit acceptable and normative behavior for members of those groups (Jepperson 1991; Elsbach 2002). Merton’s (1936) old institutionalism was the realization that officials orient actions around rules to the point that conformity interferes with the achievement purposes of the organization. Merton’s student at Columbia, Selznick, is considered the founder of institutional theory. “The most important thing about organizations is that, though they are tools, each nevertheless has a life of its own” (Selznick 1949). Selznick (1957) viewed the structural expression as an adaptive system where goals and procedures achieve a value-impregnated status becoming institutionalized, infused with value beyond the technical requirements of the task at hand.
Institutional theorists argue that formal structures can never conquer the non-rational dimensions of organizational behavior because individuals bring other commitments to the organization that restrict rational decision-making (Scott 2003). Procedures become valued as ends and structures adapt based on individual actions and environmental pressures. The institutional approach focuses on security and stability of relations, and homogeneity of outlook. Institutional theory proposes that many environmental forces are not based on efficiency but social and cultural pressures to conform. Selznick’s students (Clark, 1956, 1970; Zald & Denton, 1963) studied how structure features change over time in response of the environment and identified goal drift to explain changes in an operative’s goals.
Meyer and Rowan’s (1977) “neo-institutional theory” suggests modern societies have institutionalized rules to provide a framework for the creation and elaboration of formal organizations; rationalized myths believed but not testable, originated and sustained. Social fitness is proposed as conforming to social myths. Neo-institutionalists define institutionalization as a process which actions are repeated and given similar meaning by self and others. Symbolic interactionists such as Zucker (1977) developed the micro-foundations of neo-institutional theory based on cognitions; focus on micro-processes within organizations.
DiMaggio and Powell (1983; 1991) coined “isomorphism” as a constraining process that forces population resemblance. A contingency argument is that organizations structured by the environment, become isomorphic. DiMaggio and Powell (1983; 1991) define three kinds of institutional isomorphism – coercive, normative, and mimetic. Coercive or regulative pressures are to adopt structures or rules. Mimetic, or culture cognitive pressures force organizations to copy others, often because of uncertainty. Normative pressures are to adopt forms. As the research focus moves from technical to institutional analysis, the key outcome moves from efficiency to legitimacy of social action.
There are agreements and differences between “old” and “neo” perspectives (Powell & DiMaggio, 1991). Both perspectives view the institutionalization process is non-rational action that signals dysfunction compared to a perfectly rational approach. Both old and neo focus on relationships between organizations and environment, but neither prevents the study of lower organizational aggregates. Both expect inconsistencies between formal organizational structure and reality and invoke concepts like culture as emerging factors of organizational life. The “neo” perspective complements rather than contradicts “old” institutionalism. A difference between perspectives is that conflict is a political process and constraints come from tradeoffs of vested interests in the old perspective, while “neo” downplays the political process and constraints come from legitimacy and “common understandings” seldom explicitly articulated (Zucker, 1983; Hirsch, 1998; Scott, 1998). Another difference between perspectives is that the definition of environment is loose for the old, as local, multiples ties, and treaties, while the neo-perspective views the environment as non-local, at the whole sector or field level. Finally, the “old” perspective focuses on values where “neo” theorists prefer cognitive constructs.
Similarities and stability among organizations signal institutionalization processes at work through the effects of carriers such as culture, structures, routines, and stories. Institutional analysis depends on the elements analyzed, whether cognitive, such as deliberative processes, or normative such as organic, moral, or expectations constructs. Forms and effects of institutions occur in intra-organizational processes when protocols, procedures or routines obtain a “taken for granted” status (Elsbach 2002). The symbolic role of management has also been used to explain the emergence of institutions through the manipulation of job titles, classifications, and names of projects. Selznick (1957) observed that leaders infuse organization with values beyond the mere technical requirements by selecting the social base, central personnel, and determining the formalization of structure and procedures.
Neo-institutionalists argue that actors influence isomorphism through formal structures that reflect the myths of institutional environments instead of work activities (Meyer and Rowan 1977). Professions can either induce isomorphism or play the role of true reformers. Shenhav (1995) argued that the industrial engineer was a crucial role in Taylorist ideology, securing space for actors between labor and capital. Sutton (1994) found the HR profession used EEO laws to push for development of HR practices in modern organizations. Mobilized social groups are a class of social actors with capacity in institutional power, prevalent in political sciences. Stinchcombe (1965) noted that an institution as a “structure in which powerful people are committed to some value or interest“, could lead to searching for institutional effects in class analysis. Rao (1998) demonstrates the fight for control of a field through two different conceptions of organizations the success by one group defining the field.
Neo-institutionalists study the existence of institutional structure through diffusion, propagation, and changes in institutionalized field. Structural mechanisms that support institutional diffusion overlap with diffusion in social networks using cohesion, reflecting physical and social proximity. Haunschild (1993) studied imitation through board interlocks and found the mechanism was direct contact between actors. Factors capable of triggering institutional changes are performance failure, takeover threat, modernization, and demographic changes. When current science no longer accounts for a majority of the phenomenon observed, performance failure can result in “paradigm change” (Kuhn, 1970). Davis & Diekmann (1994) argued that the abandonment of the conglomerate form in the 1980s was triggered by performance failures and takeover threats. Haveman and Rao (1997) found various factors trigger institutional changes such as modernization and demographic changes.
Deinstitutionalization has been proposed through mechanical, functional, cognitive and cultural process. Zucker (1988) argued for mechanical reasons, using entropy, imperfect transmission, and the erosion of roles. Oliver (1992) argued for functional causes due to shifts in interest, power, social pressures, or group differences in beliefs. Davis & Diekmann’s (1994) analysis of conglomerate extinction found support for cognitive and language choices as mechanisms of deinstitutionalization. Meyer (1992) proposed that the success of the formal organization in institutionalizing and legitimating rationalization in societal definitions of person and action tend to lower the structural rationality of the formal organization. Oliver (1991) proposed “decoupling” as a response to pressures by isolating the technological core from the formal structure.