Institutional Theory : The And Powell 's The Iron Cage Revisited : Institutional Isomorphism And Collective Rationality

1295 Words Oct 5th, 2016 6 Pages
Institutional theory asserts that organizations within an industry eventually look similar in structure (DiMaggio & Powell, 1983). Although, diversity is visible in the initial stages of organizational fields, a push emerges for homogeneity once a field is well established (DiMaggio & Powell, 1983). This notion is referred to as isomorphism, a process that causes organizations experiencing analogous environmental circumstances to resemble each other (DiMaggio & Powell, 1983). Social context plays an important role in the adaptation of these changes and practices in organizations (D’Aunno, Vaughn, McElroy, 1999). DiMaggio & Powell (1983) confer the homogeneity of organizations are due to bureaucratic systems to receive legitimacy and support, not driven by competition or efficiency. This paper provides a critical analysis of Institutional Theory primarily utilizing DiMaggio and Powell’s The Iron Cage Revisited: Institutional isomorphism and collective rationality in organizational fields and An Institutional Analysis of HIV Prevention Efforts by the Nation’s Outpatient Drug Abuse Treatment Units articles.
External Environment The external environment exerts pressures (both formal and informal) in the coercive institutional isomorphic change (DiMaggio & Powell, 1983). A mandated regulation is a formal pressure, whereas persuasion from another organization can be considered an informal pressure. Coercive isomorphism emerges from political influence and the legitimacy…

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