Towards micro-foundations of institutional change

2017 ◽  
Vol 23 (3) ◽  
pp. 223-240 ◽  
Author(s):  
Kyle Bruce ◽  
Peter von Staden
Keyword(s):  
Institutional Theory ◽  
Institutional Change ◽  
Institutional Economics ◽  
New Institutionalism ◽  
New Institutional Economics ◽  
Research Review ◽  
Sociocultural Context ◽  
Content Type ◽  
Organizational Sociology ◽  
Micro Foundations

Purpose Given managerial choices and the sociocultural context in which they are made are at the heart of management history, then an understanding of both is critical. This paper argues that the “late” North (2005) provides such an understanding. Design/methodology/approach This study is a research review synthesizing much disparate but cognate literature across the new institutionalism in organizational sociology/studies and in economics. Findings “Late” North (2005) provides an important ontological frame for dealing with the so-called “paradox of embedded agency”, an approach that may afford management historians a more thorough account of how institutions are formed and change over time. North has always maintained that institutional change is the outcome of deliberate or intentional choices made by actors. However, and unlike his earlier work which ignores how humans come to make the said choices, North (2005) explicates the sociocognitive process by which intentionality emerges with expanded consciousness, as humans construct ideas and beliefs about reality, beliefs that shape decisions to alter the said reality via the process of institutional change. Originality/value It is rather curious that despite North’s status as a “historian”, management historians – or at least those publishing in this journal from its founding in 1995 – do not seem to be terribly interested in North’s work. Although North rates a mention in rival journals, other than Dagnino and Quattrone’s (2006) study, papers in this journal invoking institutional theory align with the new institutionalism in organizational sociology/studies (NIOS) rather than North’s new institutional economics (NIE). Even in the related sub-discipline of business history, those professing an interest in institutions are more interested in the NIE of non-historians Coase and Oliver Williamson than they are in North’s NIE. And, in recent work analysing the place and significance of institutional theory in historical research, the foundations are unmistakeably NIOS rather than North’s NIE.

Reconciling conflicting predictions about transience and persistence of management concepts in management fashion theory and new institutionalism

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Herman Aksom
Keyword(s):  
Institutional Theory ◽  
Institutional Change ◽  
New Institutionalism ◽  
Explanatory Power ◽  
Content Type ◽  
Media Attention ◽  
Management Fashion ◽  
Management Concepts ◽  
Fashion Theory ◽  
And Diffusion

Purpose Although drawing from neoinstitutional theoretical apparatus and ontology, management fashion theory is understood as a theory that explains the transitory nature of popular ideas and practices while institutional theory explains their stabilization, persistence and further institutionalization. In a nutshell, it seems that being opposed to each other, these two theories describe and predict different, incommensurable diffusion trajectories and organizational behaviour patterns. The purpose of this paper is to unify these two competing perspectives. Design/methodology/approach This paper makes an attempt toward further unification of management fashion theory with new institutionalism by offering an alternative understanding and conceptualization of institutional change and deinstitutionalization and by distinguishing emerging concepts from already popular fashions. Findings Most emerging concepts never achieve popularity and disappear while few of them achieve massive media attention and diffuse widely becoming new management fashions. Once these concepts have achieved a wide popularity institutional forces would favor them and lead to further institutionalization. Institutional change is understood not as a deinstitutionalization of existing management fashion in terms of erosion, discontinuity or disappearance but as a decline in its media coverage while media attention focuses on new fashionable concept. The former management fashion gets institutionalized, institutional change occurs in terms of shifting attention toward new fashion and diffusion and institutionalization cycle restarts. Institutional prediction of isomorphism and institutionalization as irreversible tendencies thus can be unified with MF prediction about the bell-shaped curves in fashions’ popularity. Therefore, postulates and predictions of management fashion theory can be derived from new institutionalism and vice versa. Practical implications The paper aims to cover, generalize and explain different trajectories of various management and organizational concepts, deducing theoretical propositions from both institutional theory and management fashion theory. Theoretical and methodological ideas offered in this paper can be helpful in future research on management fashions and diffusion. Studies on the evolution of management concept can benefit from proposed categorization and causal relationships between different stages of the life cycle. Originality/value Unifying seemingly conflicting and disparate perspectives and views allows making organization theory more coherent in terms of both explanatory power and ontological commensurability. Following other mature sciences, we share the same notion of progress, namely, the aim of achieving unification and demonstrating that different organizational theories still describe the same reality.

Vertical Restrictions: Development of Theory, Antitrust Legislation and Enforcement

2010 ◽  
pp. 110-122 ◽  
Author(s):  
S. Avdasheva ◽  
N. Dzagurova
Keyword(s):  
Institutional Theory ◽  
Institutional Economics ◽  
Theory Of The Firm ◽  
New Institutional Economics ◽  
Hierarchical Organization ◽  
Vertical Restraints ◽  
New Institutional Theory ◽  
Antitrust Laws ◽  
Antitrust Legislation ◽  
Market Organization

The article examines the interpretation of vertical restraints in Chicago, post-Chicago and New Institutional Economics approaches, as well as the reflection of these approaches in the application of antitrust laws. The main difference between neoclassical and new institutional analysis of vertical restraints is that the former compares the results of their use with market organization outcomes, and assesses mainly horizontal effects, while the latter focuses on the analysis of vertical effects, comparing the results of vertical restraints application with hierarchical organization. Accordingly, the evaluation of vertical restraints impact on competition differs radically. The approach of the New Institutional Theory of the firm seems fruitful for Russian markets.

scholarly journals The impact of Covid-19 pandemic on the institutional change in developing countries

2021 ◽  
Vol 20 (3) ◽  
pp. 587-601
Author(s):  
Tomasz Legiędź
Keyword(s):  
Developing Countries ◽  
Institutional Change ◽  
Institutional Economics ◽  
Influenza Pandemic ◽  
Civil Liberties ◽  
New Institutional Economics ◽  
Institutional Changes ◽  
Current Events ◽  
Institutional System ◽  
The Impact

Motivation: The Covid-19 pandemic is having a critical impact on economies, especially in developing countries. Such a serious external shock affects the distribution of economic rents, thus leading to potentially large institutional changes. Naturally, in the short term we are dealing with an economic crisis and a restriction of civil liberties in both autocratic and democratic countries, however, it is not known what the dynamics of institutional changes will be in the longer run. Aim: The main purpose of the article is to answer if the Covid-19 pandemic becomes a turning point that will determine the institutional system in developing countries for the next few decades. The first part of the article outlines the theory of institutional change, with particular emphasis on the role of external shocks. The next section presents studies on the socioeconomic impact of two major epidemics: The Black Death and the Great Influenza Pandemic. The third part conducts an assessment as to what extent the current pandemic may affect institutions in developing countries, by reference to the example of two countries: Tunisia and Cambodia. The analysis is conducted from the perspective of the new institutional economics. Results: If we look at the experiences from previous pandemics, current events and refer to the literature on the theory of institutional change, we can conclude that significant institutional changes caused by Covid-19 are unlikely. The process of institutional change is characterized by a specific complexity and changing dynamics. Nonetheless, it is the internal factors, reflecting the actions of people trying to maximize the benefits, which are the main cause of change in an institutional system. Therefore, the Covid-19 pandemic is more likely to strengthen the endogeneity of the process of institutional change, rather than change its course.

Historical analysis of institutions and organizations: the case of the Brazilian electricity sector

2014 ◽  
Vol 11 (1) ◽  
pp. 191-212 ◽  
Author(s):  
GUILHERME SIGNORINI ◽  
R. BRENT ROSS ◽  
H. CHRISTOPHER PETERSON
Keyword(s):  
Institutional Change ◽  
Institutional Economics ◽  
Debt Crisis ◽  
Historical Analysis ◽  
Economic Recession ◽  
New Institutional Economics ◽  
The Body ◽  
Electricity Sector ◽  
Causal Explanations ◽  
Market Protection

AbstractScholars argue that the New Institutional Economics (NIE) has not yet provided causal explanations on how long institutions persist or why and how they suffer dramatic changes. Others state that evidence is still inconclusive to define a theoretical justification on how changes and development occur. This article focuses on the institutions of the electricity sector in Brazil, aiming to heighten the body of empirical research in NIE and produce satisfactory explanations that motivate theory refinement. Based on a qualitative approach, we find that the drivers of the first institutional change in Brazil's electricity sector were related to market protection and domestic industrial support. For the second institutional change, economic recession (country at state of bankruptcy, debt crisis, and high inflation rates) and reliability of utility services were the driving factors. We hope this study systematizes historical facts and helps create grounds for our understanding of institutional evolution and economic growth.

The institutional structure of experience production in the Russian tourism industry

2016 ◽  
Vol 8 (3) ◽  
pp. 273-286 ◽  
Author(s):  
Vitaly Tambovtsev
Keyword(s):  
Institutional Economics ◽  
Institutional Arrangement ◽  
Institutional Structure ◽  
Tourism Industry ◽  
New Institutional Economics ◽  
Tourism Research ◽  
Content Type ◽  
Depth Analysis ◽  
Tourist Experience ◽  
Production Stages

Purpose The paper aligns two lines of research that tend to develop separately in tourism studies: new institutional economics (NIE) and theory of experience production. The purpose of this study is to gain a better understanding of the institutional restraints on tourism growth in developing and transit countries. Design/methodology/approach The study is based on a qualitative research methodology. A summary of key literature is presented alongside an in-depth analysis of the possibilities for NIE application in tourism research. Findings The notion of institutional structure of experience production is defined as an institutional arrangement supporting or inhibiting experience production. It is proposed as a promising framework for a more intensive NIE methodology application to tourism research. This framework is applied to tourist experience production stages, and some specific institutions accounting for positive experience creation are revealed for key experience production stages. Research limitations/implications This paper is limited in that it offers a conceptual analysis, though directions for further empirical research are proposed. Originality/value The paper is a first attempt at emphasizing impacts of some specific institutions on positive tourist experience production and it stresses their importance to the international tourism industry as it expands in developing and transit countries.

scholarly journals Institutional Economics: Then and Now

2001 ◽  
Vol 15 (3) ◽  
pp. 173-194 ◽  
Author(s):  
Malcolm Rutherford
Keyword(s):  
Political Science ◽  
Institutional Economics ◽  
New Institutionalism ◽  
New Institutional Economics ◽  
Significant Element ◽  
History Of

This article gives a history of American institutionalism, and a brief comparison with the more recent “new” institutional economics. Institutionalism was a significant element in American economics between the Wars, but declined rapidly thereafter. The article outlines the movement's initial appeal, its contributions, and the reasons for its decline. Although the “new” institutionalism has few direct ties to the older tradition, some interesting commonalities are found and discussed. Links to the “new institutionalism” in sociology and political science, and to historical work on other “institutional” traditions are also mentioned.

Altruism, reciprocity and Islamic equity finance

2016 ◽  
Vol 9 (2) ◽  
pp. 205-221 ◽  
Author(s):  
Yasushi Suzuki ◽  
Mohammad Dulal Miah
Keyword(s):  
Institutional Economics ◽  
Transaction Cost Economics ◽  
Theoretical Background ◽  
Fund Raising ◽  
New Institutional Economics ◽  
Economic Behavior ◽  
Content Type ◽  
Protection Mechanisms ◽  
Equity Finance ◽  
The Right

Purpose This paper argues how Islamic altruism and reciprocity can enhance or drain the supply of Islamic equity finance. The paper also analyzes the feasibility of Islamic equity finance through the lens of new institutional economics (NIE) and transaction cost economics (TCE). Design/methodology/approach One of the salient contributions by NIE is to support the proposition that effective contracting depends greatly on institutions in terms of “rules that constrain economic behavior”, including informal or intangible institutions, such as religion, culture and customary practices. This paper draws on the theoretical contributions of the NIE and TCE and applies some of these contributions to an analysis of general altruism and reciprocity in Islamic economies. Findings It is said that solutions based on the Islamic injunctions (collectively termed as spiritual quotient) could serve to mitigate agency risks. However, in theory, the Muslim principal (particularly fund providers) is exposed to higher agency risk unless appropriate rules of protecting the right of the principal (or of punishing the agent when its opportunistic behavior is revealed) are devised, because the Muslim fund providers have the divine obligation to share risks in enterprise under the profit-loss sharing (PLS) scheme as well as to share a portion of income with the poor or those entrepreneurs who face difficulties in fund-raising. Originality/value Many scholars refer to the lack of the “formal” institutions that hinder the sound development of Islamic venture capital (VC). This paper contributes to shedding an analytical light on the unique feature of the Muslims’ “informal” constraints which make them hesitate to invest in Islamic VC. To develop the Islamic VC market, this paper provides a theoretical background to suggest how important it would be for the national financial system to devise some tangible provisions by installing enterprise-friendly regulations as well as adequate incentive and protection mechanisms consistent with Islamic principles.

The misalignment between accounting faculty perceptions of success and organizational image during a process of institutional change

2018 ◽  
Vol 26 (5) ◽  
pp. 812-841 ◽  
Author(s):  
Silvia Pereira de Castro Casa Nova ◽  
Isabel Costa Lourenço ◽  
Renato Ferreira LeitãoAzevedo
Keyword(s):  
Academic Success ◽  
Institutional Theory ◽  
Institutional Change ◽  
Organizational Identity ◽  
Change Process ◽  
Business School ◽  
Faculty Perceptions ◽  
Faculty Members ◽  
Assessment System ◽  
Content Type

Purpose This study aims to analyse the impacts of an institutional change process on a specific higher education institution in Europe and the trade-offs between the faculty perceptions of success and the organization image during this process, in light of the identity institutional theory. Design/methodology/approach The impacts of this institutional change are analysed and discussed based on in-depth interviews conducted with faculty members of the accounting department in which they reflected upon academic success vis-a-vis the career assessment system adopted, followed up by those faculty members’ answering an electronic questionnaire about organizational identity and image perception (Gioia et al., 2000). Findings Considering the individual perspectives, faculty are concerned about their vocations and aspirations, with feelings of apprehension and insecurity, perceiving the institutional goals as too high and potentially unattainable. By shifting the priority towards research, costs in terms of losing the institutional excellence in teaching might arise, which has been traditionally keen to the institute’s organizational identity and consistent with faculty’s perceptions of academic success. Research limitations/implications As in any research endeavour, some limitations might emerge. First, the authors addressed the context of a specific business school, in a European country. It is certainly true that culture plays a role in terms of both organizational and national levels. The authors acknowledge this as a limitation. Nevertheless, this research takes a “local” stance, the logic of academic evaluation and its impacts on institutional and individual identity formation processes is a worldwide phenomenon. Second, in defining the authors’ selection criteria, the authors excluded the possibility of other voices to be heard, both in the department itself and in the business school. Regarding the department, the authors argue that those are the ones who could influence future decisions, considering that they are the only ones eligible for the governing bodies under the institute’s regulations. Regarding the business school, adding other department(s) means adding other discipline(s) to the authors’ analysis with specific and different dynamics of researching, publishing and teaching, which also impacts the expectations regarding career and academic success. Practical implications First, before beginning an institutional change process, it is necessary to assess the vocations and aspirations of its members. The solution requires to reanalyse academic career premises and to reconsider the weights given to each academic activity, or furthermore, to offer more than one career path, so as to make it flexible for each faculty to follow their vocations and aspirations or to adapt to life demands. Second, in terms of organizational identity and image, the challenge is to minimize the gap between the construed external image and the internal identity, striving to achieve a balance between teaching, research, outreach and service. Originality/value Because of the nature of the academic work, the authors propose that the application of the theory should be preceded by a careful consideration of what is academic success. The misalignments studied and reported here reveal a multilevel phenomenon, wherein individual academic identities are often in conflict with the institutional image. The authors’ study entails a contribution to the application of the identity institutional theory to academic institutions.

Do institutional risk preferences exist in Chinese direct investments in ASEAN countries? A case study of Chinese-funded enterprises in Laos

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Siyue Chen ◽  
Gengzhi Huang ◽  
Hongou Zhang ◽  
Yuyao Ye ◽  
Qitao Wu
Keyword(s):  
Multinational Enterprises ◽  
Institutional Economics ◽  
Sampling Strategy ◽  
Political Stability ◽  
New Institutional Economics ◽  
Strategic Decision ◽  
Institutional Factors ◽  
Snowball Sampling ◽  
Content Type ◽  
The Relationship

Purpose Institutional factors play an important and complex role in Chinese outward foreign direct investment (OFDI) location choices that do not seem to be influenced by a host country’s high political risks. Moreover, the location choice for OFDI is key to corporate strategic decision-making on internationalization. Therefore, this study aims to examine the direct investments of Chinese multinational enterprises (MNEs) in Laos. Design/methodology/approach Combining the purposive sampling strategy and snowball sampling method, the authors interviewed nine market- and resource-seeking Chinese enterprises in Laos. Drawing from the mainstream eclectic paradigm and the theory of new institutional economics, the authors analyzed two key variables – enterprise investment motivation and enterprise heterogeneity. Findings Chinese MNEs are not insensitive to the regressive institutional quality of host countries; the relationship effect and institutional distance are the location decision pathways along with which institutional factors influence Chinese multinationals’ investments in Laos; political stability is necessary for Chinese-funded enterprises to invest in Laos and the degree of corruption is an overestimated institutional preference factor. Originality/value The relationship effect is introduced into the analysis framework as an intermediate variable that influences the decision of MNEs to invest in countries with underdeveloped institutions. It verifies the significant roles of bilateral political relations and network relations in the OFDI location decisions of state-owned and private enterprises, respectively.

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