Rethinking Institutions and Organizations

Rethinking Institutions and Organizations

Royston Greenwood, C. R. Hinings and Dave WhettenUniversity of Alberta; University of Alberta; Brigham Young University

ABSTRACT In this Point–Counterpoint article we argue that institutional scholarship hasbecome overly concerned with explaining institutions and institutional processes, notably atthe level of the organization field, rather than with using them to explain and understandorganizations. Especially missing is an attempt to gain a coherent, holistic account of howorganizations are structured and managed. We also argue that when institutional theory doesgive attention to organizations it inappropriately treats them as though they are the same, orat least as though any differences are irrelevant for purposes of theory. We propose a return tothe study of organizations with an emphasis upon comparative analysis, and suggest theinstitutional logics perspective as an appropriate means for doing so.

Keywords: comparative analysis, institutional logics, institutions, organizations

INTRODUCTION

This Point–Counterpoint article is a challenge to current institutional scholarship and amap for its redirection. The article has two complementary themes, which, together,suggest that institutional theory needs refocusing. It begins by critiquing institutionaltheory because it has begun to substitute what was originally its independent for thedependent variable. That is, in its early formulations institutional theory looked at howinstitutional processes shape organizations. Organizations were the thing to beexplained. For us, this focus is critically important because, as Lynn Zucker observed –rightly in our view – the most important institution in modern society is the organization.It matters, therefore, that we understand them. But over the past several decadesinstitutional scholarship has turned away from this position. We have become overlyconcerned with explaining institutions and institutional processes, notably at the level ofthe organization field, rather than with using them to explain and understand organi-zations. Especially missing is an attempt to gain a coherent, holistic account of howorganizations are structured and managed. We argue the need to rethink this shift in the

Address for reprints: Royston Greenwood, Department of Strategic Management & Organization, Universityof Alberta, 4-20H Business, Edmonton, AB, Canada T6G 2R6 ([email protected]).

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© 2014 John Wiley & Sons Ltd and Society for the Advancement of Management Studies

Journal of Management Studies 51:7 November 2014doi: 10.1111/joms.12070

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balance of emphasis, to re-emphasize an organizational level of analysis, and to treatorganizations as actors.

Even when institutional theory does give attention to organizations it inappropriatelytreats all organizations as though they are the same, or at least as though any differencesare irrelevant for purposes of theory. In this respect, institutionalists are no different toorganizational theorists more generally. For, as Whetten (2009) points out, ‘Organiza-tion scholars tend to view organizations as either all alike or all unique.’ In effect, wewrite as though the following organizations:

• The Mayo Clinic• General Motors• Museum of Modern Art• Emirates Airline• Leeds United F.C.• Apple

have more in common than they have differences. Or, that what they have in commonis more important than any differences. There is an unspoken assumption that allorganizations are essentially the same. This practice of ignoring the obvious hetero-geneity of organizations reflects a shift from previous decades during which attentionwas given to systematically capturing and theorizing differences across organizations.Our second theme, therefore, is that this shift, too, is misguided because it weakensthe development of theory by omitting important phenomena. In elaborating thistheme we will suggest that differences between organizations could be theorizedusing the concept of institutional logic, which resonates with Weber’s notion of ‘valuerationality’.

THEME 1: FROM INDEPENDENT TO DEPENDENT VARIABLE

Institutional theory is one of the dominant perspectives within organization and man-agement theory (Greenwood et al., 2008). Its origins lie in the late 1970s and early 1980swhen a series of innovative papers (DiMaggio and Powell, 1983; Meyer and Rowan,1977; Zucker, 1977) asked why organizations tend to look alike. These studies spawnedwhat is commonly referred to as ‘new’ institutionalism with its emphasis on legitimacy,fields, templates, and schema, and latterly, institutional logics, institutional entrepreneur-ship, and institutional work (Greenwood et al., 2008). ‘Old’ institutionalism was con-cerned with competing values, power and influence, coalitions, and informal structures(Selznick, 1949, 1957).

It is important to remember the temporal context of these studies. The decades of the1960s and 1970s were dominated by a concern to better understand Weber’sconceptualization of ‘bureaucracy’. Sociologists (e.g., Albrow, 1970; Blau and Meyer,1956; Etzioni, 1964; Mouzelis, 1968; Perrow, 1970) were particularly attentive to thespread of bureaucracy in modern societies and the causes and implications of thatprocess of rationalization. This emphasis is explicitly raised in both Meyer and Rowan(1977) and DiMaggio and Powell (1983). Organization theorists (e.g., Child, 1972;March and Simon, 1958; Pugh et al., 1969) also explored Weber’s concept of ‘bureau-

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cracy’ and began to consider whether it was appropriate for all circumstances andsituations, and its possible variants. This questioning led to ‘contingency theory’(Lawrence and Lorsch, 1967), an approach that identified factors – such as an organiz-ation’s size, its technology, the uncertainty of its environment, and the complexity of itsportfolio – that circumscribed the nature of the archetypal bureaucratic form (forreviews, see Donaldson, 2001; Van de Ven et al., 2013).

The common aim of these early sociological and organizational theory approacheswas to understand the organizing of collective effort; that is, to understand how collectivepurposes could be achieved through the panoply of structures and processes of organi-zation. This focus went by various names: Burns and Stalker (1961) referred to ‘man-agement systems’; the Aston Group (Pugh et al., 1963) used ‘organization structure’; andGalbraith (1977) preferred ‘organization design’. More recently, ‘organizational form’has received currency. A key point is that this early body of work sought to understandthe organization as a whole in order to appreciate how collective effort could be achievedand collective purposes accomplished (Meyer et al., 1993).

A good example of this concern is Lawrence and Lorsch’s (1967) examination of howdepartments within organizations varied in their formal structures, goal orientations,time orientations, and interpersonal orientations. The challenge confronting organiza-tions, according to Lawrence and Lorsch, is to gain the appropriate ‘differentiation’across the major units of an organization, complemented by an appropriate range of‘integrative devices’. Chandler (1962) is a second example. He studied strategy andstructure, demonstrating that the latter follows the former. Differences in strategy (long-term goals and the plans of action and distribution of resources to achieve those goals),Chandler argued, led to differences in structure, in terms of the degree of functionalspecialization, the extent of hierarchy, and the nature of lines of authority and commu-nication. The growth of organizations, in particular, produces a greater need for admin-istrative coordination and control.

Our point is that contingency studies sought to understand how organizations aremanaged and co-ordinated. They looked not at the adoption of isolated practices and/orparticular structures but at the organization taken as a whole. The ‘new’ institutionalperspective, when it first appeared, did not challenge this focus. Its powerful early insightwas that organizational design is not simply one of responding to ‘technical’ contingen-cies. On the contrary, organizations are embedded in an ‘institutional’ context of socio-cultural ideas and beliefs that prescribe appropriate and socially legitimate ways of doingthings. Organizational arrangements, in this sense, are not responses solely to technicalimperatives, but are outcomes of these more socio-cultural prescriptions, or ‘rationalizedmyths’. Indeed, the ‘father’ of institutional theory, Philip Selznick, was concerned withhow organizations became institutions, as well as with how institutional processes affectorganizations.

Scholarship that followed these early institutional insights implicitly accepted the needto understand how organizations, taken as a whole, are shaped by institutional prescrip-tions and proscriptions. However, because the idea that cultural prescriptions influenceorganizations was so novel, most early studies sought to verify that idea by showing thepattern of diffusion of particular practices, and then inferring from that pattern the playof institutional processes. From these beginnings, research into institutional processes has

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accelerated and moved in multiple directions. In doing so, it has significantly deepenedour understanding of institutional processes, their origins, and their consequences.

But, the original focus of inquiry – understanding the organization as a social mecha-nism for achieving collective ends – has become relatively neglected. Instead of lookingat the organization through an institutional lens, we now seem to prefer to understand theinstitutions themselves, not the thing that they help us explain. The independent variable(institutions and institutional processes), rather than the phenomena to be explained(collective organizational effort), has become dominant. Recent themes in institutionalanalysis indicate and continue this emphasis. For example, those advocating the giving ofattention to institutional work squarely place ‘institutions’ as the phenomena to beexplained – usually at the level of the field (e.g., Zietsma and Lawrence, 2010). Similarly,the vast majority of studies of institutional entrepreneurship and change are distinctivefor their field-level emphasis (Hardy and Maguire, 2008), as are most studies of ‘logics’(Thornton et al., 2012).

To confirm our point, we examined the focus of empirical papers published in 2010,2011, and 2012 in three North American (Academy of Management Journal, AdministrativeScience Quarterly, and Organization Science) and two European journals ( Journal of ManagementStudies, and Organization Studies). These journals are highly respected and have mandatesthat cover the institutional perspective. We looked for articles whose keywords, titles, orabstracts indicated that they were concerned with ‘institutional’ processes. This criterioninevitably misses papers that deal with similar concepts and issues, but primarily from analternative perspective; and also those that use institutional ideas but only incidentally.Despite the potential bias that our selection criterion might incur, the range of ideas andempirical settings of primary interest to the institutional community became apparent.

It is notable that almost two thirds of the 45 papers that use the institutional perspec-tive deal with field-level processes. Most of the others address how and why organizationsmight implement some form of change (usually, change to a single practice, not anoverall organizational design); or how and why organizations might respond to a newfield-level demand by adopting, translating, or rejecting a new practice. Though oftenfundamentally insightful and theoretically important for the way that they nuance ourunderstanding of diffusion processes, these studies usually lean towards showing andexplaining the occurrence and nature of institutional processes, rather than to explaininghow organizations are actually designed and managed. Although they touch onorganizational design and management, they do so lightly and are intentionally narrowin focus.

The consequence is that we have a more elaborate and more complete understandingof critical field-level structures and processes. We know much more about the pattern ofdiffusion across fields, about how features of a practice – such as its ‘opacity’ or trans-parency – can affect its diffusion, and we have a greater appreciation of how contradic-tions in societal logics affect the diffusion of particular practices. We have better insightinto the roles played by collective intermediaries such as the media, critics, the profes-sions, and analysts, and a more nuanced understanding of what matters to differentstakeholders, and why. We are better informed about the critical role of ‘field configur-ing’ events – such as conferences – in framing and conveying institutional demands. Wehave learned about how and why organizations might respond differently to field-level



pressures and of the consequences of doing so. We have also learned how novel field-levelarrangements and practices emerge and become institutionalized and how they aresustained and repaired.

A much smaller group of researchers probe more deeply into the organization.Battilana and Dorado (2010) give a detailed account of how organizations handlemultiple logics through ‘hybridization’, highlighting the importance of both formalstructures and, especially, human resource practices. Pache and Santos (2010) follow asimilar theme, examining factors that determine how organizations give salience in theirdecision processes to multiple institutional demands. Spicer and Sewell (2010) identifydiscursive means within organizations whereby the layering of new onto old logicsis legitimated. Kellogg (2012) identifies how defensive status-based counter tacticswithin organizations can, under certain conditions, delegitimate the introduction of‘microinstitutional change’. Other studies that foreground the organization use the‘practice’ perspective (e.g., Smets et al., 2012). Kraatz et al. (2010) look at howorganizational factors and contextual trends affect goal displacement and the realizationor not of an organization’s core values.

Let’s be clear. We are not arguing that field-level studies are in any sense unimportant,or that we should not be interested in how field-level institutions emerge, how they aresustained, and how and why they are abandoned or changed. Nor are we saying that weshould not continue to learn more about how and why certain organizations respond inparticular ways to institutional pressures. On the contrary, these are deeply importantlines of theorizing. Moreover, by exploring these issues, researchers have made majorcontributions to how we might conceptualize the dynamics and processes oforganizational contexts, and how we might understand the mechanisms by which thosecontexts unfold. Our position is that it is time to rebalance that emphasis with a deeperand programmatic concern for understanding how organizations are designed andfunction within those contexts. We need, in short, to resurrect a distinctive interest in theorganizational level of analysis, treating the organization as a significant source ofvariability and also as prominent actors. In short, given that our general point ofdeparture is organization theory, it follows that we should strive to understand howorganizations are structured and managed, especially given the very distinctive natureand characteristics of contemporary organizations and of the challenges that they face.Relying on the insights of studies conducted several decades ago means that we riskhaving little understanding of today’s organizations and face a declining relevance withinmanagement schools. As King et al. (2010, p. 290) argue: ‘the ironic loss of the organi-zation as a central figure in organizational studies may be partly explained by ourinattention to those qualities that make the organization distinctive from other collectivesand social forms’.

We are not the first to comment on the changing direction of scholarly emphasiswithin institutional theory. Similar comments have been expressed by others, althoughusually more narrowly set within the context of entrepreneurship and the developmentof new organizational forms. A decade ago, Dacin et al. (2002, p. 51) urged institutionalscholarship to pay ‘close attention to generative processes spawning new types of organi-zations’. Tolbert et al. (2011), reviewing work at the interface of institutional theory andentrepreneurship, echoed the same point, and concluded that an important yet



understudied subject is how institutional arrangements influence ‘the designing of neworganizations’.

Although our concern is similar to this desire to understand how institutional contextsand processes influence how new organizational forms arise, and the archetypal param-eters of those forms, we go a step further. For us, it is important to understand not onlythe emergence of new organizations, but also existing, more mature organizational formsin their multiple guises. Further, we need to get closer to them. Is the contribution ofinstitutional thinking restricted to pointing to the legitimacy or otherwise of archetypalforms? We don’t think so. On the contrary, we agree with Short and Toffel (2010) whopoint out that ‘The existing literature provides a rich empirical and theoretical accountof how and why . . . structures emerge and diffuse . . . but leaves unanswered the keyquestion of whether they actually change organizational behavior . . .’. In reaching thisconclusion, Short and Toffel were referring to the adoption of internal self-regulatingcorporate compliance structures, but their point has much wider resonance. On thewhole, when institutionalists touch upon organizations, they do so only to show theadoption of particular structures or practices, and do not really dig into the organizationin an effort to understand how field-level processes affect actual behaviour, not justthe act of adoption.

To restate, our concern derives from the relatively weak current emphasis on theorganization per se as an important level of analysis; and from the need to dig into theinner workings of organizations, not just the overall shell. But in order to do that we haveto begin by recognizing that organizations are not all alike – even though, as we showbelow, current work pretends that they are.

THEME 2: THE IMPORTANCE OF ORGANIZATIONALHETEROGENEITY

Institutional ideas have been explored in a wide range of settings. Underlying them is thepresumption that differences between organizations are less important than insights thatcan be gleaned from assuming similarities. Admittedly, it is sometimes acknowledged –especially by those who use the case study method – that issues of generalizability haveto be considered. For example, Lepoutre and Valente (2012) conclude by saying: ‘ourfindings may lack applicability to other contexts’. Similarly, Ravasi and Schultz (2006)admit that: ‘Our study suffered from the usual limitations associated with case studyresearch, which trades generality for richness, accuracy and insight.’ Nevertheless, noattempt is typically made to specify the scope conditions of observations and insightsfrom such studies. It is interesting to note that when large sample, quantitative studies aredone of organizations in a single sector or field, no such remarks about potentiallimitations are made at all!

Recently, this presumption of similarity has been questioned. Aldrich (2009; see alsoMcKelvey and Aldrich, 1983) argues that organizations are a very heterogeneous set butthat this is improperly ignored in current scholarship: ‘Today, we might characterize this“organizations are all alike” approach as one of extreme decontextualization’ (Aldrich,2009, p. 23). Similarly, for King et al. (2009, p. 8), ‘the decline of the comparativeapproach has caused organizational scholarship to be less sensitive to the varieties of



organizational experience and led to a loss of interest in studying the organization as aunique level and unit of analysis’. It is, perhaps, informative that management/organizational studies is the only field within the social sciences that does not have ajournal with ‘comparative’ in the title. The issue here, and especially perhaps with regardto the potential limitations of quantitative studies in a single sector, is to explicitlyestablish the scope conditions of a theory. Wrongly, ‘generalizability’ has been inter-preted as ‘this applies to all organizations’ rather than, more properly, ‘to what organi-zations, organizational elements and processes does this theory apply’. We need to bemuch more careful in claiming the first kind of generalizability.

The complaint against the presumption of similarity applies to institutional analysis.Indeed, it could be argued that institutional thinking is particularly and paradoxicallyguilty in this respect. Why paradoxical? Because one of the central themes in institutionalanalysis – ‘institutional logics’ – clearly points to the expectation that organizations willexhibit differences. From this perspective, the presumption should be of organizationaldifference, not similarity, and the guiding framework should be comparative analysis.

THE CASE FOR PRESUMING DIFFERENCE

King et al. (2009) point out that the analysis of similarities and differences betweenorganizations, per se, once dominated organizational analysis. The starting point was anassumption that organizations are different until shown to be similar. This position wasapparent in the first Handbook of Organizations (March, 1965) with many chapters beingorganized by what we would now refer to as their institutional context, such as educa-tional organizations, business organizations, military organizations, prisons, publicbureaucracies, and political parties.

A central purpose in much of this work, as we noted earlier, was to understandbureaucracy and bureaucratization. Various lines of theorizing took place including anemphasis upon comparative organizational analysis. Significant effort was given to theconstruction of typologies and taxonomies in order to capture and understand bothsimilarities and differences (e.g., Blau and Scott, 1962; Burns and Stalker, 1961; Etzioni,1964; Perrow, 1970; Pugh et al., 1969). Typologies emphasize ideal types based on apriori distinctions (Meyer et al., 1993). So, Blau and Scott (1962) distinguished organiza-tions in terms of ‘who benefits’; Etzioni (1964) emphasized methods of compliance: force,conviction, or pay; Burns and Stalker (1961) used organizational system properties fortheir typology of organic and mechanistic arrangements; and Perrow (1967, 1970) usedtasks as the basis for distinctions. Taxonomies, in comparison, seek to uncoverorganizational differences through multivariate empirical classification (McKelvey,1982) – the underlying assumptions being that organizations strive for internal consist-ency and coherence (Miller and Friesen, 1984); and that the configuration of structuresand systems which an organization chooses and/or evolves has an impact on manyaspects of organizational activity. Critically, both taxonomies and typologies seek toidentify and classify and thus explain differences between organizations. There is nopresumption of similarity.

This presumption of difference, as noted above, underpins contingency theory(Donaldson, 2001; Lawrence and Lorsch, 1967; Van de Ven et al., 2013), which is



concerned with the fit between an organization’s structures and systems and itsorganizational and environmental contexts. This theory generated theoretical frame-works that were generic with regard to concepts of structure and context, but that heldopen the possibility and, indeed, the likelihood that there would be differences betweenorganizations. For example, in a reanalysis of the Aston data, which contributed to earlycontingency theory, Aldrich (1972) suggested that the results could be explained by thedistinction between manufacturing and service organizations, i.e. that there are classes oforganizations that will be distinctive because they are operating in quite different con-texts. King et al. (2009, p. 7) rightly argue that the contingency approach was static andhad limited scope – in consequence, there was a turning away from studying organiza-tions, and from organization structure and types in particular, in favour of higher levelsof analysis (as exemplified by population ecology and institutional theory with theiremphases on populations of organizations and institutional fields). But, in consequence,says Scott (2009, p. 54), ‘as the level of analysis has been extended upward, attention tothe comparative study of individual organizations has diminished’. Appreciation ofdifference gave way to a presumption of similarity.

Interestingly, when we look at the Academy of Management we see a residual butpartial recognition of this idea of difference. The Organization and Management TheoryDivision covers all organizations (implicitly presuming similarity), but three other divi-sions presume difference and are concerned with particular kinds of organizations(‘Healthcare Management’, ‘Public and Not-for-Profit’, and ‘Management Consulting’).These divisions imply that there is something special or distinctive about these organi-zations because of the sector or context in which they are located. As one might expect,this is carried further in the American Sociological Association which has sectionsconcerned with, for example, the economic arena, community and urban sociology,education, labour movements, law, medicine, mental health, political sociology, religion,and ‘science, knowledge and technology’. There is also a section called ‘Organizations,Occupations and Work’. In other words, the way that we break down our discipline, atleast in North America, implies recognition of the presumption of potential differencesbetween organizations, whilst acknowledging that there are theorists whose role is togeneralize across such orders or fields.

Our point, however, is that today the implicit and dominant presumption underlyingmost organizational research is that differences can be ignored. The comparative analy-sis of organizations has become a rare pursuit. For us, this makes little sense theoreticallyor practically and we urge a return to the presumption of difference and the advance-ment of comparative analysis of organizations. The question that follows is, how mightwe do so within institutional theory?

INSTITUTIONAL LOGICS

A compelling starting point is the concept of institutional logics (Thornton et al., 2012)because a fundamental – albeit often ignored – assumption of the institutional logicsperspective is difference. Indeed, Friedland and Alford’s (1991) starting point wasvery explicit. They accused neo-institutionalists of assuming a ‘supraorganizationalfield’:



the approach . . . seems to assume that formal attributes of organizational fields can bespecified independently of the institutional arena in which they are located. But, wewould argue, it is the content of an institutional order that shapes the mechanisms bywhich organizations are able to conform or deviate from established patterns.(Friedland and Alford, 1991, p. 244)

Friedland and Alford are using two terms that are important for our discussion –‘institutional order/institutional arena’, and ‘organizational field’ – which refer to dif-ferent levels of analysis. An institutional order is a societal level concept. The term itselfis quite specific to institutional theory and we prefer the term ‘core societal level insti-tutions’, which is similar to the term ‘social institution’ or societal sector as used insociology (e.g., Giddens and Sutton, 2013; Stark, 2006).

Distinct types of relationships and exchanges between social actors define these coresocietal level institutions; they have their own institutional infrastructures of organiza-tions and occupations; they have their own spheres of jurisdiction or action; and each hasits own overarching logic that provides criteria for acceptable behaviour. These coresocietal institutions – at least in western societies – are the market economy, the family,the legal system, social stratification and class, religion, science and the professions, andrepresentative government. This actual list could be debated, and no doubt will be. Butthe important point is that each of these institutions has its overarching ‘logics’, or‘master rules’ that prescribe and proscribe social – including organizational – behaviour.The point being made by Friedland and Alford is that the overarching logic of (forexample) religion will differ in its normative and cognitive prescriptions, to thoseexpressed by the logic of (for example) the market, or the legal system, and so on.

From an organization theory standpoint, the important implication is that eachsocietal level institution will be associated with distinctive prescriptions – ‘organizationalarchetypes’ (Greenwood and Hinings, 1996) – of the way that collective purposes shouldbe defined and of how those collective purposes should be organized and accomplished.Religious purposes and their organizational expression, for example, will be very differ-ent to those of the market, as will those of the family, government bureaucracies, and soon.

It follows that an important area for institutional research is to more explicitly theorizeand empirically show these overarching differences. Institutional theorists shouldcompare across institutions in order to identify the differences in their archetypalorganizational forms. Doing so would provide a more inclusive map of the range oforganizational forms; and, critically, would help us to better understand the archetypalarrangements in each arena. Instead, some are over-emphasized – notably that of themarket – and others ignored. Tracey (2012) and Hinings and Raynard (2013), forexample, have pointed to the lack of studies of religion within organization and manage-ment theory (for a notable exception, see Dyck, 2013).

One societal level institution that has begun to receive attention – ‘family’ – illustrateshow we can learn by comparing and learning from difference. A resurrection of interestin the study of family businesses has strongly emphasized their distinctive nature and arecent review shows how management processes, strategies, corporate governance, andstakeholder relations differ profoundly from those found in corporations because the



institutional logic of family is predominant (Gomez-Mejia et al., 2011). These studiesconfirm differences in archetypal organizational arrangements across institutional ordersand hence the need to articulate them.

The same conclusion is indicated by the growing examination of how logics from onesocietal institution – especially those of the market – penetrate another. In the publicsector there has been much discussion of the New Public Management with its emphasison privatization, reform, and transformation of the organizations of the state and thetensions that it produces (e.g., Ferlie et al., 1996; Kitchener, 1999). McNulty and Ferlie(2002, p. 362), in studying process reengineering in healthcare, noted that ‘there weresome pockets of change, but no organizational transformation. Change was patchy,difficult, and took much longer than originally expected’. Their explanation lies in thevery different logics associated with the two institutional orders.

Our point here is that in order to understand the movement of logics betweeninstitutions it is necessary to start from an analysis of organizational difference acrossthose institutions because responses to the introduction of one or more logic(s) will bemediated by those differences. That is, (for example) the response of family organizationsto the importation of ideas from the institution of the market may be very different(perhaps more accommodating?) to the (perhaps more resistant?) response of religiousorganizations. We need to better understand these processes whereby logics (and theirimplicated organizational arrangements) move from one institutional arena to another,how they are assimilated or rejected, and the organizational forms that result. Yet, suchtheorizing is in its infancy and, within institutional theory, is a decidedly minorityinterest. As Tracey et al. (2011, p. 60) state, ‘the question of how new organizationalforms are created remains an unsolved problem in new institutional theory’.

ORGANIZATIONAL FIELDS

Thus far we have emphasized that societal level institutions differ because of theiroverarching logics. But it would be misleading to portray each institution as homog-enous. On the contrary, the overarching logic is parsed at the level of the organizationalfield – i.e., ‘a community of organizations that partakes of a common meaning systemand whose participants interact more frequently and fatefully with one another than withactors outside of the field’ (Scott, 1994, pp. 207–08). For present purposes, the importantpoint is that it is at the level of the field that logics have greater specificity in their materialand symbolic manifestation.

Take, for example, the institution of religion. All religions deal with the relationshipbetween a believer and a divine being or beings (Hinings and Raynard, 2013; Tracey,2012). But the beliefs or logics that define this relationship are differently articulated inthe major world religions of Buddhism, Christianity, Hinduism, Judaism, and Islam. Asa result there are differences in organizational arrangements, especially in authoritysystems, structural differentiation, and decision-making. Also, there are differenceswithin each major religion. For example, in Christianity there is the basic divisionbetween Catholic, Orthodox, and Protestant, and within the latter, denominationaldifferences between, for example, Anglicans, Baptists, Christian Reformed, Mennonites,and Pentecostals. All of these particular religions can be conceptualized as distinct fields,



and the differences between them are enshrined in somewhat different logics and attend-ant organizational archetypes. For example, a key difference is the role of the religiousfunctionary. In the Catholic tradition, the priest is an arbiter between the believer andGod, resulting in a hierarchical structure and the politics of bureaucracy. In manyProtestant denominations, in contrast, the pastor is only functionally different, resultingin a congregational structure with decision-making at the local level.

Importantly, differences in field-level logics have consequences for ‘contingency’ vari-ables – such as organizational size, range of services, governance approaches etc. – thatshape organizational arrangements (Donaldson, 2001; van de Ven et al., 2013). We knowthat these are important characteristics that affect organizational structures. They, aswell as institutional demands, are significant such that when we speak of ‘large’, multi-national, professional service firms, or ‘large’, research-based universities, or ‘large’,tertiary, publicly-owned research and teaching hospitals, the implication is that thecontingencies of size and function matter, and that they affect organizational arrange-ments. A challenge for institutionalists, therefore, is to understand how such contingen-cies interact with the logics of different societal institutions in their impact uponorganizations.

Hinings and Raynard (2013) illustrate this challenge in their discussion of religiousorganizations. For such organizations it has been shown that size, spatial distribution,and age each impact organizational form (Miller, 2002; Nelson, 1989; Odom and Boxx,1988). But it is the beliefs of religious organization that lead to growth or to spatialcoverage (Hinings and Raynard, 2013). Thus, the impact of generic contingent factors –such as size and geographical scope – is both mediated by beliefs as well as ‘put into play’by them. In other words, it is the interaction between the institutional environment andtraditional contingency variables that requires exploration because of their independentand joint effects on organizational form and vice versa. Put another way, even whenfaced with the same institutional pressures, there will be organizational heterogeneitybecause of the play of contingency factors. And we need to understand it.

These differentiations at the field level could be outlined for each societal institution.However, one more example will suffice – the professions. Several studies (Greenwoodet al., 2007; Malhotra and Morris, 2009; Von Nordenflycht, 2010) have shown that thereare strong differences between inter alia the professions of law, accounting, managementconsulting, engineering, and medicine. For example, elite accounting firms are extremelylarge, by any standards. They cover multiple functions, operate around the world, andhave extensive networks of local offices. Law firms, in comparison, are much smaller, andoperate in a much more restricted number of locations. But there are also significantdifferences within professions. Accounting firms, for example, range in size from inde-pendent practitioners to firms with more than 100,000 employees.

In consequence, a Big Four accounting firm, such as PricewaterhouseCoopers, maybe conceptualized as operating within the institution of professions, but in twoorganizational fields within it. They are members of the organizational field of account-ing and of the organizational field of large, multinational professional service firms. Thefirst field includes firms which vary enormously in their size and scope and that havequite different interests, but which are subject to a common overarching logic. Thesecond field includes the larger law firms and management consulting firms with whom



they are often in direct competition. An important challenge for institutionalists is tounderstand how such institutional and contingency demands impact upon organizationsand affect their structural accommodations.

Recently, there has been an appreciation of the occurrence of multiple logics at thelevel of the organizational field (e.g., Delbridge and Edwards, 2008; Dunn and Jones,2010; Thornton et al., 2012; for reviews, see Greenwood et al., 2011; Kraatz and Block,2008). In this work, there is acceptance that, in some contexts, competing or incompat-ible logics may be a relatively permanent feature and attention is being given to how thisplays out. Much of this work remains at the level of the field but there is also interest inunderstanding the types of ‘hybrid’ organizations that result (e.g., Battilana and Dorado,2010; Pache and Santos, 2010, 2013; Tracey et al., 2011), which further illustrates howthe application of the institutional logics perspective can advance our discovery andunderstanding of distinctive archetypal organizational forms. To date, however, mostattention has been given to one form of hybrid – those that pull together market andwelfare logics – and there has been little attention given to comparing the hybridsimplicated by other logic combinations (Battilana and Lee, 2014). Nevertheless, the focusof this stream of research is encouraging because it is emphatically upon the organizationand it illustrates the usefulness of the logics perspective.

CONCLUSIONS

The argument we have presented is that institutional theory has become so preoccupiedwith the institutional level of analysis that it has lost sight of our claim as organizationalscholars to actually study organizations. We have proposed a return to the comparativeanalysis of organizations in order to recognize and understand organizational differences(and to gain a better appreciation of similarities). We have proffered the potential of theinstitutional logics perspective and suggested its application to different levels of analysis.In doing so, we have implied the need to be clear whether we are dealing with logics atthe societal level or within an organizational field. At the level of the field we haveintimated the benefits of combining the institutional logics perspective with contingencyideas.

Aldrich (2009) emphasizes the crucial need to define the scope conditions of ourtheories, which he says has been done badly. By starting with the hypothesis thatorganizational forms may differ according to the level and nature of their institutionalcontext, we should be better able to establish these scope conditions much in the way thatPopper (1963) advocated, subjecting theories to ‘falsification’ tests in order to establishthe limits of their applicability. Doing so through comparative analysis would put ‘theorganization’ back at the centre of institutional theory – where it belongs.

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