Title: Strategic Organizational Change within an Institutional Framework
Abstract: Organization theorists have developed a variety of theoretical perspectives in an attempt to provide a compelling view of organizational change (Child, 1972; Hannan and Freeman, 1977; Meyer and Rowan, 1977). Recently, Oliver (1997) suggested integrating the resource-based view of the firm with institutional theory in order to better understand the context and process of [a firm's] resource selections (1997: 697). We argue that Oliver's insights can be extended and applied to the ongoing organizational change debate. In particular, we suggest that institutional forces guide strategic change. Within the institutional framework we use the resource-based view (RBV) to demonstrate how the perceptions of choice, determinism and uncertainty influence the types of strategic changes managers are likely to develop. In order to identify appropriate types of strategic change under various circumstances we first examine the role of key features of institutional theory in support of institutionally-based types of strategic change (Oliver, 1997) and key features of the RBV of the firm. Second, we move beyond Hrebeniak and Joyce's (1985) delineation of and emphasis on determinism and choice by integrating perceived uncertainty into the strategic change discussion. Finally, we discuss likely organizational change strategies given the firm's perceived levels of choice, determinism and uncertainty. We define strategic change as actions that enable the organization to take advantage of important opportunities or to cope with consequential environmental threats (Gioia and Chittipeddi, 1991: 433). This definition exposes the change process to both internal and external situations, which is consistent with our attempt at identifying strategic change options suitable under varying circumstances. INSTITUTIONAL FRAMEWORK Institutional theory (Meyer and Rowan, 1977; DiMaggio and Powell, 1983) suggests that organizations' actions are the result of competition for legitimacy among competitors and resource-providing constituents, and that socially constructed belief systems become institutionalized in organizations and their structure (Scott, 1987). Organizations show their conformity to institutional environments by incorporating environmentally embedded (Granovetter, 1985; Stinchcombe, 1965) and institutionally rationalized rules into their structures (Ibarra and Andrews, 1993). By doing so, they attempt to maximize their legitimacy, stability, and chance of survival (Zucker, 1987). The institutional environments that organizations concern themselves with are termed organizational fields (DiMaggio, 1986a). An organizational field is made up of organizations that interact and influence one another. Within these fields there are a variety of different types of organizations that are important to the focal organization. An organization maintains direct contact with some of the organizations in the field, such as customers, suppliers, and government and regulatory organizations, while other organizations in the field, such as competitors, are important because they play a similar role as the focal organization (DiMaggio and Powell, 1991). Organizational fields represent the totality of relevant actors (DiMaggio and Powell, 1991: 65) rather than just a subset of organizations such as those considered as part of the industry in which the organization directly competes. Studying organizational fields rather than environments provides the advantage of focusing on the relationships between organizations (DiMaggio, 1986a). Environmental characteristics that are usually thought to have generalized effects for all firms in an environment can be more accurately identified in an organizational field. An organizational field influences those organizations within it and, simultaneously, organizations influence the structure of their organizational field. This mutually influencing process is known as structuration (Giddens, 1979). …
Publication Year: 2000
Publication Date: 2000-06-22
Language: en
Type: article
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Cited By Count: 29
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