Institutional Theory and Organizational Change

Institutional Theory and Organizational Change

Staffan Furusten

Whether or not they are aware of it, managers do not fully control the nature and timing of their decisions. Their framework of action is limited by institutional constraints in the surrounding environment – what is technically, economically, socially and culturally possible in different contexts. With a better understanding of their environment – and how it affects how they think, what they do and why they do it – decision-makers are also better able to make more carefully considered decisions about organizational change. In this book Staffan Furusten discusses why it is difficult for organizations around the world to resist the pressures of the institutional environment and how organizations worldwide – big and small, private and public – are becoming increasingly alike.

Chapter 3: Institutional actors

Staffan Furusten

Subjects: business and management, critical management studies, organisation studies, economics and finance, institutional economics

Extract

There are a great many actors in society whose main task is to encourage other actors to do certain things in a certain way. Governments and their agencies are obvious examples of this, as are supra- and inter- governmental organizations such as the EU and UN. Perhaps even more tangible an example are the consultants who offer advice and are involved in rule-making of various kinds; although there are also other actors like researchers, journalists, teachers, etc. What these ‘institutional actors’ have in common is that their work involves producing information, rules and services that will benefit other actors. They thereby summarize the requirements and conditions in society that apply for the rest of us. The information these actors convey can vary in character – as ideas, ideologies or knowledge – and they mediate it through either text or talk. That is, the activities and products of institutional environment actors contribute to the creation of both formal and informal structures in society that the rest of us (and sometimes they them- selves) must relate to. The production of institutional products clearly also involves many actors in various ways in various different contexts. The interest of this chapter, how- ever, focuses mainly on those who can be said to make up the final link, thus the organizations that physically deliver institutional products to the organizations that consume them. When matters ultimately land on the desks of the actor categories discussed here, they are materialized in texts or packaged in talk.

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