Institutional inertia and practice variation

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Herman Aksom
Keyword(s):  
Institutional Theory ◽  
Practice Variation ◽  
Three Dimensions ◽  
Institutional Pressures ◽  
Organizational Practices ◽  
Organizational Responses ◽  
Content Type ◽  
Long Run ◽  
Institutional Profile ◽  
Successful Change

PurposeInstitutional theory had been developed for the purpose of explaining widespread diffusion, mimetic adoption and institutionalization of organizational practices. However, further extensions of institutional theory are needed to explain a range of different institutional trajectories and organizational responses since institutionalized standards constitute a minority of all diffusing practices. The study presents a theoretical framework which offers guidelines for explaining and predicting various adoption, variation and post-adoption scenarios.Design/methodology/approachThe paper is primarily conceptual in nature, and the arguments are developed based on previous institutional theory and organizational change literature.FindingsThe notion of institutional inertia is proposed in order to provide a more detailed explanation of when and why organizations ignore, adopt, modify, maintain and abandon practices and the way intra-organizational institutional pressures shape, direct and constrain these processes. It is specified whether institutional inertia will be temporarily eclipsed or whether it will actively manifest itself during adoption, adaptation and maintaining attempts. The study distinguishes between four institutional profiles of organizational practices – institutionalized, institutionally friendly, neutral and contested practices – which can vary along three dimensions: accuracy, extensiveness and meaning. The variation and post-adoption outcomes for each of them can be completely characterized and predicted by only three parameters: the rate of institutional inertia, institutional profile of these practices and whether they are interpretatively flexible. In turn, an extent of intraorganizational institutional resistance to new practices is determined by their institutional profile and flexibility.Practical implicationsIt is expected that proposed theoretical explanations in this paper can offer insights into these empirical puzzles and supply a broader view of organizational and management changes. The study’s theoretical propositions help to understand what happens to organizational practices after they are handled by organizations, thus moving beyond the adoption/rejection dichotomy.Originality/valueThe paper explores and clarifies the nature of institutional inertia and offers an explanation of its manifestation in organizations over time and how it shapes organizational practices in the short and long run. It challenges a popular assumption in organizational literature that fast and revolutionary transition is a prerequisite for successful change. More broadly, the typology offered in this paper helps to explain whether and how organizations can successfully handle and complete their change and how far they can depart from institutional norms.

Pressures of CSR in India: an institutional perspective

2019 ◽  
Vol 12 (2) ◽  
pp. 227-242 ◽  
Author(s):  
Vijita S. Aggarwal ◽  
Aruna Jha
Keyword(s):  
Institutional Theory ◽  
Financial Performance ◽  
Conceptual Model ◽  
Developing Country ◽  
Integrative Model ◽  
Institutional Pressures ◽  
Institutional Perspective ◽  
Content Type ◽  
Institutional Embeddedness ◽  
Managerial Perceptions

Purpose Wide differences in the focus and form of corporate social responsibility (CSR) exist among countries due to the different institutional embeddedness of CSR practices. The purpose of this paper is to seek to explain them within the framework provided by institutional theory by identifying important pressures driving CSR practices. Further, it intends to extend theory by proposing a conceptual model that relates institutional pressures, CSR practices, reputation and financial performance of corporates in a developing country like India. Design/methodology/approach Drawing upon the extant literature on the constructs, the paper describes their evolution through decades and weaves relationship between them. Institutional theory provides the framework to develop hypotheses. Findings The model has its roots in Scott’s institutional theory – linking regulative, normative and cognitive pressures to CSR practices. Reputation mediates the relationship between CSR and financial performance. Practical implications The conceptual model can serve as a foundation for subsequent empirical research. An understanding of relationship between constructs in the model will help corporates to strategize CSR initiatives. At the organisational level, insight into managerial perceptions of CSR practices will help to identify the need for training, if there is a gap between what organisation intends and what managers perceive. Originality/value The authors have proposed for the first time an integrative model that will help to understand the antecedents as well as consequences of CSR practices in a developing country within a theoretical framework.

Institutional pressures and the extent of cross-channel integration: the moderating effect of enterprise's capabilities

2020 ◽  
Vol 3 (1) ◽  
pp. 113-133
Author(s):  
Guangling Zhang ◽  
Chenchen Liu ◽  
Hui Wang
Keyword(s):  
Institutional Theory ◽  
Positive Impact ◽  
Institutional Pressures ◽  
Resource Based View ◽  
Content Type ◽  
Technology Competence ◽  
Manufacturing Enterprises ◽  
Channel Integration ◽  
Empirical Perspective ◽  
The Impact

PurposeCurrently, the issues of cross-channel integration (CCI) have become the attentive focus. However, little research based on institutional theory details the drivers of and obstacles to adopt CCI strategy. Combined with resource-based view (RBV) and institutional theory, this thesis studies the effect of institutional pressures on the manufactures' extent of CCI, through exploring the moderating effects of firm's technology competence and relationship governance capabilities on the relationship between institutional pressures and the extent of CCI.Design/methodology/approachThe survey data of 249 valid research samples were obtained from Chinese manufacturing enterprises. Statistical software such as SPSS 22.0 and AMOS 18.0 was used to analyze the data and test the conceptual model and relevant research hypotheses from an empirical perspective.FindingsThe results of empirical study from 249 manufacturers indicate that the mimetic, coercive and normative pressures perceived by enterprises can significantly promote their extent of CCI; relationship governance capabilities attenuate the positive impact of mimetic pressures on the extent of CCI, but strengthen that of normative pressures on the extent of CCI; besides, technology competence can attenuate the positive effect of mimetic pressures on the extent of CCI, but enhance that of normative pressures on the extent of CCI.Originality/valueFew studied the impact of the interaction of internal capabilities and external institutional pressures on CCI of enterprises. This study combines institutional theory and resource-based view to fill the theoretical gap in this regard.

Ownership governance, institutional pressures and circular economy accounting information disclosure

2014 ◽  
Vol 8 (3) ◽  
pp. 487-501 ◽  
Author(s):  
PuCha Wang ◽  
Fei Che ◽  
ShanShan Fan ◽  
Chen Gu
Keyword(s):  
Corporate Governance ◽  
Institutional Theory ◽  
Circular Economy ◽  
Information Disclosure ◽  
Accounting Information ◽  
Listed Companies ◽  
Institutional Pressures ◽  
Disclosure Quality ◽  
Content Type ◽  
The Relationship

Purpose – This paper aims to explore the determinants of circular economy accounting information disclosure quality, and also to make empirical analysis on the relationship between circular economy accounting information disclosure quality and corporate ownership governance and institutional pressures according to institutional theory and corporate governance theory. Finally, this paper provides some corresponding suggestions for heightening circular economy accounting information disclosure quality. Design/methodology/approach – This paper constructs enterprise circular economy accounting information disclosure model with Chinese characteristics. First, it takes disclosure index method to measure enterprise circular economy accounting information disclosure quality, followed by the hypotheses of this study. Then, this study employs a statistical analysis technique to empirically study the relationship between enterprise circular economy accounting information disclosure quality and ownership governance and institutional pressures, to study the ways to heighten enterprise circular economy accounting information disclosure quality in Chinese background. Findings – Ownership governance and institutional pressures mainly determine quality of circular economy accounting information disclosure. This paper draws the following conclusions: Chinese listed companies have heightened their circular economy accounting information disclosure quality due to ownership concentration, shareholding of institutional investors, mandatory disclosure, capital structure and assets size. However, the circular economy accounting information disclosure quality has low correlation with the profitability and the location of listed companies. Originality/value – Both in China and the West, few scholars or experts adopt empirical research to study the determinants of circular economy accounting information disclosure quality in an institutional theory and corporate governance theory perspective based on China’s supervisory system background. This paper makes a thorough analysis of the factors that affect listed companies’ circular economy accounting information disclosure quality, and provides some corresponding suggestions relevant for heightening circular economy accounting information disclosure quality.

The impact of transaction costs and institutional pressure on supplier environmental practices

2014 ◽  
Vol 44 (5) ◽  
pp. 353-372 ◽  
Author(s):  
Wendy L. Tate ◽  
Lisa M. Ellram ◽  
Kevin J. Dooley
Keyword(s):  
Institutional Theory ◽  
Transaction Costs ◽  
Information Seeking ◽  
Business Practices ◽  
Institutional Pressures ◽  
Environmental Practices ◽  
Content Type ◽  
Environmental Practice ◽  
The Cost ◽  
The Impact

Purpose – Suppliers play a more significant role in the environmental footprint of supply chains than most final manufacturers. The purpose of this paper is to apply transaction costs and institutional theory to help understand why the more conservative, or reactive suppliers may or may not be likely to adopt environmental practices. Design/methodology/approach – This research builds on a prior conceptual paper and uses the results of a survey to test whether transaction costs and institutional theory can provide insight into supplier's adoption of environmental practices. Findings – This research finds that perceived transaction costs affect supplier cooperation in adopting environmental practices. Suppliers are more likely to adopt an environmental practice if information-seeking costs are low or the cost of adoption is considered necessary to maintain the relationship. Data did not support the hypotheses concerning institutional pressures. Originality/value – There is much research in the area of proactive adoption of environmental business practices. This research looks specifically at what influences the adoption of environmental business practices by suppliers that are more reactive or hesitant to be leaders in this area.

scholarly journals Institutional Linkages with the State and Organizational Practices in Corporate Social Responsibility: Evidence from China

2017 ◽  
Vol 13 (3) ◽  
pp. 539-573 ◽  
Author(s):  
Jianhua Ge ◽  
Wei Zhao
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Early Stage ◽  
Practice Variation ◽  
The State ◽  
Institutional Pressures ◽  
Organizational Practices ◽  
Institutional Authority ◽  
Institutional Linkages ◽  
Corporate Social

ABSTRACTTo deepen our understanding of organizations’ heterogeneous responses to institutional demand, we develop a ‘relational complexity’ argument to highlight organizations’ diverse institutional linkages as another important source of practice variation. We argue that diverse relations between organizations and the institutional authority can filter distinct institutional pressures and expectations, shape organizational interpretations of environmental demands, and thus trigger heterogeneous organizational practices. We adopt this theoretical framework and distinguish two types of institutional linkages with the state to understand different adoption patterns in corporate social responsibility (CSR) in its early stage of diffusion in China. Based on a national survey dataset consisting of 1,268 firms, our analyses show that firms having a stronger bureaucratic linkage with the state tend to focus on more visible external-oriented CSR practices. In contrast, those firms forming a closer partnership with the state through political or semi-political associations are more likely to take more extensive adoptions by further developing internal CSR structures. This study enriches the institutional analyses by shifting our attention to the relational dynamics between organizations and institutional authority as a key source of practice variation. It also has important implications to the research and practices of CSR in emerging economies.

How institutional theories explain and fail to explain organizations

2020 ◽  
Vol 33 (7) ◽  
pp. 1223-1252
Author(s):  
Herman Aksom ◽  
Inna Tymchenko
Keyword(s):  
Institutional Theory ◽  
No Value ◽  
Strategic Behavior ◽  
Radical Change ◽  
Institutional Pressures ◽  
Science Literature ◽  
Organizational Fields ◽  
Content Type ◽  
And Behavior ◽  
Methodology Of Science

PurposeThis essay raises a concern about the trajectory that new institutionalism has been following during the last decades, namely an emphasis on heterogeneity, change and agentic behavior instead of isomorphism and conformist behavior. This is a crucial issue from the perspective of the philosophy and methodology of science since a theory that admits both change and stability as a norm has less scientific weight then a theory that predicts a prevalence of passivity and isomorphism over change and strategic behavior. The former provides explanations and predictions while the latter does not.Design/methodology/approachThe paper offers an analysis of the nature, characteristics, functions and boundaries of institutional theories in the spirit of philosophy and methodology of science literature.FindingsThe power of the former institutional theory developed by Meyer, Rowan, DiMaggio and Powell lies in its generalization, explanation and prediction of observable and unobservable phenomena: as a typical organizational theory that puts forward directional predictions, it explains and predicts the tendency for organizations to become more similar to each other over time and express less strategic and interest-driven behavior, conforming to ever-increasing institutional pressures. A theory of isomorphism makes scientific predictions while its modern advancements do not. Drawing on Popper's idea of the limit of domains of explanation and limited domains of theories we present two propositions that may direct our attention towards the strength or weakness of institutional theories with regard to their explanations of organizational processes and behavior.Practical implicationsThe paper draws implications for further theory building in institutional analysis by suggesting the nature of institutional explanations and the place of institutional change in the theoretical apparatus. Once institutional theory explains the tendency of the system towards equilibrium, there is no need to explain the origins and causes of radical change per se. Institutional isomorphism theory explains and predicts how even after radical changes organizational fields will move towards isomorphism, that is, institutional equilibrium. The task is, therefore, not to explain agency and change but to show that it is natural and inevitable processes that organizational field will return to isomorphic dynamics and move towards homogenization no matter how much radical change occurred in this field.Originality/valueThe paper discusses the practical problems with instrumental utility of institutional theories. In order to be useful any theory must clearly delineate its boundaries and offer explanations and predictions and it is only the former 1977/1983 institutional theory that satisfies these requirements while modern advancements merely offer ambiguous theoretical umbrellas that escape empirical tests. For researchers therefore it is important to recognize which theory can be applied in a given limited domain of research and which one has little or no value.

Institutional pressures, resources commitment, and returns management

2016 ◽  
Vol 21 (3) ◽  
pp. 398-416 ◽  
Author(s):  
Yi-Chun Huang ◽  
Min-Li Yang ◽  
Ying-Jiuan Wong
Keyword(s):  
Institutional Theory ◽  
Product Recovery ◽  
Consumer Electronics ◽  
Future Research ◽  
Institutional Pressures ◽  
Resource Based View ◽  
Content Type ◽  
Product Return ◽  
Returns Management ◽  
The Relationship

Purpose This study aims to explore the relationships among institutional pressures, commitment of resources and returns management. Returns management is regarded as a part of supply chain management. However, the research in returns management has received much less attention. To bridge the gap, this study concerns key concepts from two important schools of thought, i.e. institutional theory and the resource-based view, to build up the research model. Design/methodology/approach Retailers and maintenance providers in the 3C industry (computers, communication and consumer electronics) in Taiwan were surveyed, and the statistical methods of hierarchical and moderated regression were used to examine the relationships among institutional pressures, commitment of resources and returns management. Findings Institutional pressures, comprising non-market and market pressures, affect the implementation of returns management (product return practices and product recovery practices). Commitments of resources positively and significantly moderate the relationship between the pressures imposed by non-market and market actors and product return practices and product recovery practices. Research limitations/implications This study investigates only the factors that drive returns management. Future research can examine the relationship between the antecedents and consequences of returns management. Furthermore, returns management may become increasingly critical for firms to develop and perform corporate social responsibility (CSR). Therefore, future research can investigate the relationship between CSR practices and returns management. Practical implications This research suggests that managers under institutional pressures should continually pay attention to the effects of external factors on returns management. Additionally, the results reveal that a commitment of resources can reinforce the relationship between the pressures imposed by non-market and market actors and the implementation of returns management. Under significant institutional pressures and resource constraints, managers may increase the effectiveness of returns management while attending to the concerns of non-market and market actors. Originality/value This study presents a model that considers three major explicative variables: institutional pressures, resources commitment and returns management. It is the first investigation to integrate three streams of literature on institutional theory, the resource-based view and returns management.

scholarly journals An institutional perspective for research in waqf accounting and reporting

2020 ◽  
Vol 11 (2) ◽  
pp. 400-427
Author(s):  
Nori Yani Abu Talib ◽  
Radziah Abdul Latiff ◽  
Aini Aman
Keyword(s):  
Institutional Theory ◽  
Government Regulation ◽  
Contextual Factors ◽  
The State ◽  
Institutional Pressures ◽  
Structured Interviews ◽  
Institutional Perspective ◽  
Content Type ◽  
Study Approach ◽  
Intention To Adopt

Purpose This paper aims to improve the understanding of the institutional pressures that shape the intention to adopt waqf accounting and reporting. The study seeks to answer two research questions as follows: what are the challenges in the adoption of waqf accounting and reporting in waqf institutions; and how do institutional pressures influence the adoption of waqf reporting in Malaysia. Drawing on the work of DiMaggio and Powell and Scott of institutional theory, this paper provides empirical evidence of institutional pressures on the adoption of waqf reporting in Malaysia and the challenges faced in adopting waqf accounting and reporting. Design/methodology/approach This study uses qualitative research method with an explanatory case study approach. Data are collected through semi-structured interviews with the accountants of State Islamic Religious Council and Customs of Terengganu, an informal conversation with the Deputy Director of Accountant Generals Department of Malaysia and document reviews, mainly the Malaysian Accounting Standard Board Research paper. Findings The findings show that coercive pressure such as government regulation contributes to challenges in the adoption of waqf accounting and reporting. Normative pressures contribute to challenges in formulating standardised waqf accounting and reporting, whereas mimetic pressure contributes to challenges in the comparability of the waqf accounting and reporting among the state Islamic religious councils in Malaysia. In the efforts towards the standardisation of waqf accounting and reporting practice, a similarity of the process of the standard implementation or the institutional isomorphism of the State Islamic Religious Council in Terengganu is strongly influenced from the result of the mandate of its Board members and Fatwa council members (coercive isomorphism and religion logic) and minor influence from the normative isomorphism (the result of the participants’ education and profession) as well as the result of imitating other State of Islamic Religious Councils (SIRCs) because of the ambiguity of the process or certain practice. Research limitations/implications The study contributes to the knowledge by extending institutional theory and the possible role of religion logic in Islamic perspective to organisational behaviour and accounting development in SIRCs. This study is limited to the understanding of the challenges in the adoption of waqf accounting and reporting but could also be applicable to the adoption of other accounting standards or regulations. Practical implications This paper offers key implications for research, in improving the understanding of contextual factors and decision to adopt waqf accounting and reporting. The standard setter needs to be aware of the influence of contextual factors that shape decision towards standardisation of accounting and reporting for waqf. Originality/value The interplay of institutional pressures and implications of religion logic provides an interesting approach to understanding the waqf institutions’ intention to adopt accounting and reporting for waqf.

Institutional isomorphism and social responsibility in professional sports

2017 ◽  
Vol 7 (1) ◽  
pp. 38-57 ◽  
Author(s):  
Soyoung Joo ◽  
Ben Larkin ◽  
Nefertiti Walker
Keyword(s):  
Social Responsibility ◽  
Institutional Theory ◽  
Professional Sports ◽  
Institutional Isomorphism ◽  
Institutional Pressures ◽  
Structured Interviews ◽  
Senior Managers ◽  
Content Type ◽  
South Korean ◽  
Isomorphic Pressures

Purpose The purpose of this paper is to explore the corporate social responsibility (CSR) practices of three major professional sport leagues in South Korea to investigate the general beliefs, values, and norms influencing the institutional isomorphism of CSR engagement. Design/methodology/approach Nine semi-structured interviews were conducted with three league chiefs of CSR initiatives and senior managers of related divisions to explore the general beliefs, values, and norms that are institutionalized in their CSR practices. The Gioia method of inquiry and data analysis was employed. Findings Using institutional theory, the current research found evidence of all three institutional pressures of institutional isomorphism that contribute to the institutionalization of CSR practices in professional South Korean sport. The data revealed that CSR has been institutionalized in these leagues through isomorphic pressures – coercive, mimetic, and normative – as antecedents to their CSR practices. Practical implications The current research identified that conforming to the institutional norms may not only act as a force causing the organization to behave in a socially responsible manner, but also to provide the organization with competitive advantages. Originality/value The authors extend the current literature in sport CSR by using institutional theory as a framework to uncover organizational CSR motives. In particular, this is the first study to provide evidence of how three isomorphic pressures work to institutionalize CSR practices in South Korean professional sports leagues.

The impact of the EU Directive on non-financial information: Novel features of the Italian case

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rosa Lombardi ◽  
Antonietta Cosentino ◽  
Alessandro Sura ◽  
Michele Galeotti
Keyword(s):  
Institutional Theory ◽  
Financial Information ◽  
Institutional Pressures ◽  
The European Union ◽  
Public Companies ◽  
Content Type ◽  
Reporting Practices ◽  
Eu Directive ◽  
The Impact ◽  
The Eu

Purpose This paper aims to examine the European Union (EU) 95/2014 Directive’s impact on large public companies. It chose Italy as a pivotal country that made non-financial information assurance mandatory, going beyond the EU Directive’s original requirements. Specifically, it investigates how the UE Directive fosters institutionalisation of the non-financial reporting (NFR) process in organisations. Design/methodology/approach Two large public companies in Italy are used as case studies. Data are gathered from annual and integrated reports, institutional websites and semi-structured interviews with the managers and employees involved in different organisational positions. The authors adopted the neo-institutional theory as a theoretical lens to identify the organisations’ response to the (external) institutional pressures influencing corporate reporting practices. Findings The findings demonstrate how the EU Directive fostered changes to large public companies’ reporting practices and external pressures contributed to influencing changes to internal organisational practices in terms of new internal processes, procedures and structures. These changes are motivated by the companies’ need to guarantee reliable information to be produced in their non-financial reports. Practical implications This paper helps academics and policymakers to advance NFR practices by understanding regulatory factors that can foster changes in the internal reporting process and responsibility within organisations. Originality/value The findings provide some empirical insights to foster reflections on the EU Directive’s effectiveness in changing reporting practices. This paper contributes to enriching the literature on institutional theory in shaping mandatory non-financial disclosure by identifying the institutional pressures influencing the effectiveness of regulations to change NFR practices.

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