Escape from the Iron Cage? Organizational Change and Isomorphic Pressures in the Public Sector

TLDR

Institutional theory posits that organizations seek legitimacy by conforming to environmental isomorphic pressures. This study distinguishes compliance and convergence as two definitions of conformity and examines a comprehensive set of organizational characteristics subject to isomorphic pressures. The framework is applied to 101 English public organizations, analyzing internal characteristic changes from 2001 to 2004. Evidence shows substantial compliance but limited convergence; isomorphic pressures more strongly affect strategies and culture than structures and processes, indicating that institutional theory’s relevance depends on the conformity definition and the characteristics examined.

Abstract

Institutional theory suggests that organizations pursue legitimacy by conforming to isomorphic pressures in their environment. We extend previous research on institutional theory by distinguishing between two definitions of conformity (compliance and convergence) and by taking a comprehensive view of the organizational characteristics that might be subject to isomorphic pressures. This framework is applied to change between 2001 and 2004 in the internal characteristics of 101 public organizations in England. We find substantial evidence of compliance but more limited support for convergence. Furthermore, the impact of isomorphic pressures was stronger on organizational strategies and culture than on structures and processes. Thus, the relevance of institutional theory to change in the public sector depends on the definition of conformity that is used and the organizational characteristics that are examined.