Abstract
Institutional theory has made tremendous gains in recent years. However, while it has borrowed concepts and insights from more critical perspectives, it has resisted the import of a more critical outlook. This has meant that institutional theory has shied away from identifying and examining more problematic uses of power. Consequently, institutional understandings of how power operates continue to fall short of the theory’s full potential.
Keywords
Over the past decade or more, institutional theory, specifically the new organizational institutionalism of DiMaggio and Powell (1991) has come to dominate organization theory. The extraordinarily impressive rise of this perspective has been cherished by a growing number of organization theorists who have come to understand various organizational and social phenomena in terms of isomorphism, legitimacy imperatives, and, indeed, logics. From a rather simple “theory”—that organizational forms, practices, categories, and so on become reified or “institutionalized” beyond their functional utility, becoming infused with particular meanings that may not have been there, or intended, initially—institutional theory has blossomed into an intricate landscape of (mostly) complementary theoretical ideas.
Not everyone is impressed, however, by this development. Where several have successfully hitched their bandwagons to the institutional theory juggernaut, many have been dismayed by the colonizing tendency exhibited by this perspective. To many in the latter group, institutional theory is nothing less than an imperialist project, seeking to marginalize, if not directly undermine, the theoretical gains made by critical theorists concerned with power, oppression, and exploitation. This position may be extreme. Institutional theory is after all, by all accounts, an exciting development—wide ranging and critical in the sense of attacking the rational, functionalist, and often Panglossian views emanating from the ultimate imperialist discipline of economics. However, even the staunchest defenders of new institutionalism acknowledge that it needs to further develop its existing sensibility for the nuanced way in which power operates in social life (Lawrence, 2008). It is this point that I emphasize and elaborate on in this brief essay.
Where Is Power?
Much has been said and written about how institutional theory neglects the role of power. This is not entirely true of course. Institutions are all about power in one sense, as are “logics” or “structures”. They influence or guide our actions by shaping our beliefs. They are not external to us of course. Through our actions, we enact institutions in everyday life. It is in the same process that institutional change, often leading to a shift in a given power differential, may also occur.
Yet, institutional theory’s engagement with the other work on power (Clegg, 1989; Foucault, 1977; Gramsci, 1971) has been marginal, leaving it susceptible to censure from critical theorists. Compared with institutional theory, more critical perspectives do seem to have a much more developed view of power. To begin with, there is a nuanced discussion of various perspectives on power—ranging from the liberal one (power to exercise one’s own free will) to Foucauldian ones (power shaping individual choice). Furthermore, there is exploration of power at all levels—from power shaping an individual’s identity (consciousness itself is an act of power according to Bourdieu and Foucault) to the creation of discourses that produce collective consent.
However, institutional theory’s inadequate awareness of power is not due to an epistemological or ontological difference. Rather, the issue is moral and ethical. Whereas critical theorists are always suspicious of the elite’s agendas, institutional theorists are not as apprehensive at all. Within institutional theory, our knowledge of how practices become legitimate or how institutions influence our actions is mostly theorized ways that accept organizational hierarchies and their inherent power differentials as given. Thus, when middle management follows organizational norms of hierarchy, institutional theorists rarely find the situation problematic. Critical theorists by comparison are vexed by the same situation, wondering why subordinated agents are consenting to their own domination!
Although institutional theorists do an excellent job of explaining how shifts in logics come about, or how practices that were once considered taboo, become legitimate, they often end up painting a rather sanitary view of the world, skirting around, or simply accepting at face value, what more critical theorists consider to be highly problematic uses of power. For the most part, they choose to operate within the larger paradigm of capitalist relations of production rather than outside. They view the world either from management’s perspective or from an “objective” and disinterested outsider’s. Issues of moral philosophy appear at best as an (often decoupled!) appendage.
Not the Chief Concern
It is here that institutional theory diverges most from other critical perspectives. Problematic uses of power are not the chief concern of institutional theorists. Most of them do not bring a critical agenda with them. What is more worrying is that they are positively conservative when it comes to such issues. Anything deemed not to belong in management schools, such as class conflict, workers’ rights, and so on is often purged from the discourse they collectively build. As many scholars of power, labor process and consumer culture have emphasized for years—corporations have come to occupy a central role in our lives determining what work we do, what we buy, how we think of ourselves, and how we relate with each other. And yet, somehow, issues such as control of the workplace, exploitation of workers, creation of problematic corporate identities, and their consequences for social relations, growing inequality inside and outside organizations, or corporate power and influence over government and social arena seem to have been largely overlooked by institutional theorists. The emergence of new organizational forms, work practices, privatization, or promulgation of new regulation—where many see oppression, exploitation, or manipulation by elites—is mostly understood from an uncritical perspective by institutional theorists. 1
A Debt to Critical Perspectives
Unless institutional theorists develop a sensitivity to problematic uses of power—and there are many—and confront them, institutional theory cannot possibly develop a strong foundation for dealing with power. Institutional theory can only profit from engaging further with critical theoretical perspectives on social institutions. Unfortunately, however, most adherents do not seem so inclined. There is a clear tendency within institutional research to understate the debt it owes to more critical perspectives. Critical theorists such as Habermas, Gramsci, and Foucault, despite their central contributions to our understanding of how beliefs systems become hegemonic, are often expunged from the otherwise vast literature review sections embedded in institutional theory papers. Terminology changes accordingly: Hegemony becomes taken-for-grantedness, and ideology becomes logic. This linguistic choice is unfortunate because not only does it sever institutional theory’s ties to the wider critical literature out there but also purges the political meaning that was sedimented in the original terms.
Institutional theorists’ avoidance of critical issues is unfortunate because institutional theory has in the past enriched itself by borrowing from a variety of other more critical perspectives (among others of course)—for example, contradictions as an endogenous source of change (Seo & Creed, 2002) comes from a fundamentally Marxist view of the world. Similarly, Barley and Tolbert’s (1997) view of the recursive relationship between structure and agency appears inspired by Giddens’s (1984) structuration theory. Similarly, the creation or mobilization of social movements by “institutional entrepreneurs” could be seen to have its roots in Arendt’s conceptualization of power as “the capacity to act in concert.” While one hopes that this ‘borrowing’ will continue, it would be even better if concepts and insights are accompanied by a sensitivity to key issues of our time including inequality and exploitation.
Conclusion
The tendency of institutional theorists to overlook issues of moral philosophy or ethics has an unfortunate negative externality for the theoretical basis of institutional theory. The true promise of institutional theory remains unrealized! The financial crisis is a case in point. Institutional theorists would be hard-pressed to analyze the causes of the crisis without a well developed view on how capitalism, elite interests, corporate power, and managerial identities were implicated in the crisis. How power operates to legitimize economic configurations, create particular types of identities, and shape social and economic relations would be central to any such analysis, as it would be if one were to study the growing menace of inequality.
Today, more than at any other time, to grow beyond business schools, and become part of the public imagination, institutional theory needs to develop a critical perspective on corporations (Barley, 2007; Munir, 2012). Corporations have not only come to dominate economies but are also shaping entire societies in critical ways. Arguably, societies have become subservient to a dominant economic paradigm within which corporations are central actors. Few analyses of corporate profitability, dominance, or adoption of particular practices would be complete without reference to the overarching economic imperatives embodied in the mobility of capital. At a time when other disciplines are actively critiquing the larger system, institutional theorists, for the most part, take it for granted. For doctoral students coming out of graduate schools, it does not even appear to be a conscious decision for they emerge steeped in a rather benign view of the world. Increasingly, their course work skirts around more critical perspectives in the social sciences choosing to include only “classics” published in mainstream management journals. This, to me is an unfortunate development and one that we must remedy sooner rather than later.
Footnotes
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.