do institutions really constrain behavior?*

Brayden

In Omar’s recent post, he distinguishes between two different conceptions of how institutions work. In one view institutions are myths that organizations implement superficially to demonstrate compliance to a legitimate cultural model. In the other view, institutions actually constrain behavior. Institutions come in the form of scripts, ritualized behaviors, etc. that make people/organizations act in certain ways. Hence, we see a great deal of homogeneity in behavior. Similarity in organizational form doesn’t necessarily imply that people have found the most optimal solution to a problem, as a functionalist theory might suggest; rather, they all act the same because they’re being informed by the same institution.

I have a problem with this latter view of institutionalism. My problem can, in part, be summarized by the common complaint that it depicts managers and other human actors as “cultural dopes.” But I also dislike the constraint-perspective because, so far, we haven’t done a very good job of making our case that it actually works that way. Institutional analysis often begins with the assumption that homogeneity is evidence that culture is at work. If organizations are isomorphic, it must be because some behavior or policy has become institutionalized. We do not distinguish between the outcome (institutionalization as a social fact) from the process (institutionalization as diffusion). Similarity has become our object of analysis. (I have other problems with this line of thinking but I’ll leave it for later.)

Institutionalists rarely consider the alternative explanations for emerging isomorphism. As Lieberman and Asaba described in a recent AMR article, economists and management scholars (who don’t consider themselves institutionalists) have their own compelling theories to explain why organizations may merge on a common strategy or policy. Contrary to our sometimes naive depiction of economic arguments, most of these theoretical explanations do not rely on some sort of tautological-optimality argument. For instance, one group of scholars note that when firms are in tight competition for the same resources, strategic change by one firm may initiate a series of similar changes by their competitors. None of the competitors want to be put at a disadvantage so, lacking better information, they try to maintain balance with their competitors through imitation. Note that the outcome is the same (isomorphism), but the source of explanation is very different. Striving for legitimacy or reliance on scripts or schemas is completely absent.

Back to the bigger problem – I’m not sure if institutionalists can say with confidence that institutions constrain behavior because 1) we seem to be more interested in demonstrating institutionalization as a process than as an outcome (and thus we don’t really establish the “social fact” aspect of institutions) and 2) we haven’t yet dealt very well with competing explanations for isomorphism.

*By constraint I mean a particular kind of constraint – the ability to elicit certain behaviors through cultural mechanisms. The other view of institutional constraint – the choice-within-constraints variety – assumes that individuals/organizations are rational actors that have to play by the rules to get what they want. Organizations are the rats, and institutions are the cheese mazes.

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