Institutional Theory Analysis

Institutional theory is viewed as “ an approach to understanding organizations and management practices as the product of social rather than economic pressures”(Suddaby, 2014, p. 93).The theory can explain complex issues that involve political, economic and practical perspectives (Myrdal, 1978).

Based on how institutions are compulsory, accurate and delegated, they could be classified into formal and informal (e.g. relational norms)(Assaad, 1993; Casson, Della Giusta, & Kambhampati, 2010). The theory core interest is the social behaviour and interaction and assumes that the grounded rules might be varying between institutions; however, they in total determine the boundaries of individuals’ behaviours (Adams, 1987; Burns, 1931; Commons, 1931). …show more content…
Powell and DiMaggio (1983) suggest three types of isomorphisms: coercive isomorphism (occurs to parties when they face formal and informal pressures from parties that they reply on); mimetic isomorphism (occurs when parties perceive uncertainty); and normative isomorphism (originates from the professional practices).The institutional theory focuses on the macro-level; however, there is a serious need for the understanding through the micro-level (Powell & Colyvas,