who’s more cultural?

Omar

In the standard textbook accounts of organizational theory, the usual line is that the branch of institutional theory connected to Meyer and Rowan (1977) proposes a “radically cultural” account of the effect of shared cognitive understandings and symbolic displays on the structure and survival of organizations (“myth and symbols” in the words of Perrow 1985), while (first generation) organizational ecology proposes a more “hard nosed” view, attentive to the obdurate reality of competition and material scarcity which goes beyond the closet idealism of institutional theory.

Yet, an attentive reading of the early and more recent statements belies this simplistic assessment. First, it is well-known (although not usually noted) that Meyer and Rowan (1977) and Meyer and Scott (1983) held on to a “sectoral” conception of the macro-level organizational environment (the community level as opposed to the “population” level or the “organizational field” in DiMaggio and Powell 1983) and that they explicitly stated that the “institutional” argument regarding the power of compliance with ritual form over technical competence only applied to “institutionalized organizations,” which were located in the “institutional” and not “technical” sectors. In the latter realm, the usual (economic) criteria of “efficiency” reigned supreme and were the primary determinants of organizational “life-chances.”

Surprisingly, it was Hannan and Freeman (1989) who first strongly questioned this sectoral segregation argument when they were trying to make the case for the cross-sectoral generality of their density-dependent legitimation effect. This is the first-order effect of density on the founding rates of organizations of a given form, which as has been noted in a slew of research applies to both “institutionalized” organizations and plain-old for profit organizations. Considering that this first order effect of contemporaneous density is theoretically interpreted as being produced by a legitimation process, the radically “cultural” nature of this argument is seldom fully realized. What Hannan and Freeman (and later Hannan and Carroll 1992, 2000) are saying is that “culture matters” regardless of sector whether “technical” or “institutional.”

In a certain sense organizational ecology, in its attempt to provide a highly general theory of organizational dynamics, ends up producing a more decidedly cultural argument than the original Meyer-Scott account which still segregated the power of culture to a given set of organizations entrusted with the production of symbolic objects. In the ecological world, “legitimation” and thus shared understandings, schemas and taken-for-granted cognitive status matter for everybody. This seems to me to be truly a radical argument for the power of culture coming from the people that are usually seen as more “realist.”

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