The Iron Cage Revisited: One Popular Theory of Institutional Change

The Iron Cage Revisited: One Popular Theory of Institutional Change

“The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields”, by DiMaggio & Powell, 1983, pgs 147-160

According to Google scholar, this article had 19737 citations on 8 July 2012.  Link to the page http://www.ics.uci.edu/~corps/phaseii/DiMaggioPowell-IronCageRevisited-ASR.pdf

Definitions

Institutional Isomorphism: “Once a set of organizations emerges as a field, a paradox arises: rational actors make their organizations increasingly similar as they try to change them…(through) three processes -  coercive, mimetic and normative.” (DiMaggio & Powell, 1983, pg 147)

Organizational Field “those organizations that, in the aggregate, constitute a recognized area of institutional life” (DiMaggio & Powell, 1983, pg 148)”

Summary in Quotes

“We argue that the causes of bureaucratization and rationalization have changed.  The bureaucratization of the corporation and the state have been achieved.  Organizations are still becoming more homogenous, and bureaucracy remains the common organizational form.  Today, however, structural change in organizations seems less and less driven by competition or by the need for efficiency.  Instead, we will contend, bureaucratization and other forms of organizational change occur as the result of processes that make organizations more similar without necessarily making them more efficient” (pg 147)

“We ask, instead, why there is such startling homogeneity of organizational forms and practices; and we seek to explain homogeneity, not variation” (pg 148)

“Once disparate organizations in the same line of business are structured into an actual field (as we shall argue, by competition, the state, or the professions), powerful forces emerge that lead them to become more similar to one another” (pg 148)

“As an innovation spreads, a threshold is reached beyond which adopted provides legitimacy rather than improves performance” (pg 148)

“Thus, organizations may try to change constantly; but, after a certain point in the structuration of an organizational field, the aggregate effect of individual change is to lessen the extent of the diversity within the field” (pg 149)

“The concept that best captures the process is isomorphism…(the) process that forces one  unit in a population to resemble other units that face the same set of environmental conditions.  At the population level, such an approach suggests that organizational characteristics are modified in the direction of increasing compatibility with the environmental characteristics” (pg 149)

“we maintain that there are two types of isomorphism: competitive and institutional” (pg 149)

“We identify three mechanisms through which institutional isomorphic change occurs, each with its own antecedents: 1) coercive isomorphism that stems from political influence and the problem of legitimacy 2) mimetic isomorphism resulting from standard responses to uncertainty; 3) normative isomorphism, associated with professionalization” (pg 150)

“Organizations tend to model themselves after similar organizations in their field that they perceive to be more legitimate or successful” (pg 152)

Hypotheses

1-A “The greater the dependence of an organization on another organization, the more similar it will become to that organization in structure, climate, and behavioral focus, climate, and behavioral focus. (pg 154)

2-A “The greater the centralization of organization A’s resource supply, the greater the extent to which organization A will change isomorphically to resemble the organizations on which it depends for resources” (pg 154)

3-A “The more uncertain the relationship between means and ends the greater the extent to which an organization will model itself after organization it perceives to be successful” (pg 154)

4-A “The more ambiguous the goals of an organization, the greater the extent to which the organization will model itself after organizations that it perceives to be successful”(pg 155)

5-A “The greater the reliance on academic credentials in choosing managerial and staff personnel, the greater the extent to which an organization will become like other organizations in its fields” (pg 155)

B-1 “The greater the extent to which an organizational field is dependent upon a single (or several similar) source of support for vital resources, the higher the level of isomorphism” (pg 155)

B-2 “The greater the extent to which the organizations in a field transact with agencies of the state, the greater the extent of isomorphism in the field as a whole” (pg 155)

B-3 “The fewer the number of visible alternative organizational models in a field, the faster the rate of isomorphism in that field” (pg 155)

B-4 “The greater the extent to which technologies are uncertain or goals are ambiguous within a field, the greater the rate of isomorphic change” (pg 156)

B-5 “The greater the extent of professionalization in a field, the greater the amount of institutional isomorphic change” (pg 156)

B-6 “ The greater the extent of structuration of a field, the greater the degree of isomorphics” (pg 156)