Institutional Logics

Abstract

Institutional logics The phrase, ‘institutional logic’ has become somewhat of a buzz-word. Buzz words are over used; as a result their meanings often get distorted and overextended and they burn-out of existence. Mizruchi and Fein (1999) showed in the institutional theory literature how meanings get distorted and then taken for granted. To avoid misunderstandings of the institutional logic concept and to build on research in this genre, now is the time to reflect on definitions and the theoretical and methodological contributions this perspective brings to the analysis of institutions. We begin by defining the concept of an institutional logic and how it emerged as part of the development of institutional theory since the 1970s. Second, we illustrate the institutional logics approach as both a meta-theory and a method of analysis. Third, we present a select review of the literature emphasizing how the institutional logics approach makes headway in addressing several ...

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Institutional Logics
Patricia H. Thornton and William Ocasio
INTRODUCTION
The phrase, ‘institutional logic’ has become
somewhat of a buzz-word. Buzz words are
over used; as a result their meanings often get
distorted and overextended and they burn-out
of existence. Mizruchi and Fein (1999)
showed in the institutional theory literature
how meanings get distorted and then taken
for granted. To avoid misunderstandings of
the institutional logic concept and to build on
research in this genre, now is the time to
reflect on definitions and the theoretical and
methodological contributions this perspec-
tive brings to the analysis of institutions.
We begin by defining the concept of an
institutional logic and how it emerged as part
of the development of institutional theory
since the 1970s. Second, we illustrate the
institutional logics approach as both a meta-
theory and a method of analysis. Third, we
present a select review of the literature
emphasizing how the institutional logics
approach makes headway in addressing sev-
eral limitations and tensions identified by
scholars of institutional analysis. In this
review we focus on an analysis of the
implicit and explicit social mechanisms
employed in these studies, not on the
description or strength of their empirical
findings. Last, we critique the literature on
institutional logics and suggest how the
approach can be used to further advance the
study of organizations and institutions.
The research on institutional logics repre-
sents an impressive variety of empirical con-
texts, from thrifts (Haveman and Rao, 1997),
higher education publishing (Thornton and
Ocasio, 1999), health care organizations
(Scott et al., 2000), colleges and universities
(Gumport, 2000), consumer research
(Moorman, 2002), mutual funds (Lounsbury,
2002), French cuisine (Rao, Monin, and
Durand, 2003), equity markets (Zajac and
Westphal, 2004), accounting firms (Thornton,
Jones, and Kury, 2005), occupational prestige
rankings (Zhou, 2005), and architects (Jones
and Livne-Tarandach (Forthcoming), among
others. Given the incredible diversity of
research topics, what are institutional logics?
DEVELOPMENT OF INSTITUTIONAL
THEORY
To understand the concept of institutional
logics we must first place it within the con-
text of institutional theory and institutional
analysis. The study of institutions has a long
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history in organizational analysis, beginning
with Selznick’s (1948, 1949, 1957) empirical
analyses of organizations and the institu-
tional environment, and Parson’s (1956)
theorizing, which emphasized how institu-
tions function to integrate organizations with
other organizations in society through uni-
versalistic rules, contracts, and authority.
In the 1970s a new approach to institu-
tional analysis emerged with Meyer and
Rowan (1977) and Zucker (1977), who high-
lighted the role of culture and cognition in
institutional analysis. From a macro perspec-
tive, Meyer and Rowan (1977) emphasized
the role of modernization in rationalizing
taken-for-granted rules, leading to isomor-
phism in the formal structures of organiza-
tions. Organizations had to conform to the
requirements of external environments for
legitimacy, meaning that parts of organiza-
tions had to be loosely coupled from their
technical core. Meyer and his colleagues
were concerned with the importance of
rationality in the account of western culture,
and viewed the development of formal orga-
nizational structures as part of world society
and its cultural system (Meyer, Boli, and
Thomas, 1987; Meyer, Boli, Thomas, and
Ramirez, 1997). From a micro perspective,
Zucker (1977) also emphasized the taken-
for-granted nature of institutions, and the role
of cultural persistence as a measure of insti-
tutionalization.
DiMaggio and Powell (1983) extended
Meyer and Rowan’s (1977) focus on isomor-
phism from the societal level to the level of
organizational fields. With their emphasis on
coercive, normative, and mimetic sources of
isomorphism, DiMaggio and Powell’s
approach led to an explosion of empirical
analysis. In DiMaggio and Powell (1983),
the effects of cognition are mainly viewed
through mimetic isomorphism – focusing on
mindless behavior in response to cultural
rationalization. Subsequently, what they
termed ‘the new institutionalism’ also
became largely identified with a rejection
of rationality as an explanation for organiza-
tional structure, and an emphasis on
legitimacy rather than efficiency as an
explanation for the success and survival of
organizations (Tolbert and Zucker, 1983).
Friedland and Alford’s (1991) seminal
essay, together with empirical work by
Haveman and Rao (1997), Thornton and
Ocasio (1999), and Scott et al. (2000),
created a new approach to institutional analy-
sis which posited institutional logics as
defining the content and meaning of institu-
tions. While the institutional logics approach
shares with Meyer and Rowan (1977),
Zucker (1977), and DiMaggio and Powell
(1983, 1991) a concern with how cultural
rules and cognitive structures shape
organizational structures, it differs from them
in significant ways. The focus is no longer on
isomorphism, whether in the world system,
society, or organizational fields, but on the
effects of differentiated institutional logics
on individuals and organizations in a larger
variety of contexts, including markets, indus-
tries, and populations of organizational
forms. Institutional logics shape rational,
mindful behavior, and individual and organi-
zational actors have some hand in shaping
and changing institutional logics (Thornton,
2004). By providing a link between
institutions and action, the institutional
logics approach provides a bridge between
the macro, structural perspectives of Meyer
and Rowan (1977) and DiMaggio and Powell
(1983) and Zucker’s more micro, process
approaches. Situated forms of organizing are
linked with beliefs and practices in wider
institutional environments in ways that
address the critique of isomorphism and
diffusion studies (Hasselbladh and
Kallinikos, 2000).
DEFINITIONS OF INSTITUTIONAL
LOGICS
We present definitions of the institutional
logics approach and then return to how it dif-
fers from the new institutionalism. The term
institutional logics was introduced by Alford
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and Friedland (1985) to describe the contra-
dictory practices and beliefs inherent in the
institutions of modern western societies.
They describe capitalism, state bureaucracy,
and political democracy as three contending
institutional orders which have different
practices and beliefs that shape how individ-
uals engage political struggles.
Friedland and Alford (1991) further devel-
oped the concept in the context of exploring
the interrelationships between individuals,
organizations, and society. They view
institutions as supraorganizational patterns of
activity rooted in material practices and
symbolic systems by which individuals and
organizations produce and reproduce their
material lives and render their experiences
meaningful. Rejecting both individualistic,
rational choice theories and macro structural
perspectives, they posited that each of the
institutional orders has a central logic that
guides its organizing principles and provides
social actors with vocabularies of motive and
a sense of self (i.e., identity). These practices
and symbols are available to individuals,
groups, and organizations to further elabo-
rate, manipulate, and use to their own advan-
tage (Friedland and Alford, 1991: 232, 248,
251–252).
For Friedland and Alford (1991) the core
institutions of society – the capitalist market,
the bureaucratic state, families, democracy,
and religion – each has a central logic that
constrain both the means and ends of individ-
ual behavior and are constitutive of individu-
als, organizations, and society. However,
while institutions constrain action they also
provide sources of agency and change. The
contradictions inherent in the differentiated
set of institutional logics provide individuals,
groups, and organizations with cultural
resources for transforming individual identi-
ties, organizations, and society.
A separate, albeit related, conception of
institutional logics was developed by Jackall
(1988). In his ethnographic analysis of ethi-
cal conflicts in corporations, Jackall (1988:
112) defines institutional logic as ‘the
complicated, experientially constructed, and
thereby contingent set of rules, premiums
and sanctions that men and women in partic-
ular contexts create and recreate in such a
way that their behavior and accompanying
perspective are to some extent regularized
and predictable. Put succinctly, an institu-
tional logic is the way a particular social
world works.’ Jackall, like Friedland and
Alford, views institutional logics as embod-
ied in practices, sustained and reproduced by
cultural assumptions and political struggles.
But the emphasis for Jackall is on the norma-
tive dimensions of institutions and the
intra-institutional contradictions of contem-
porary forms of organization; in contrast the
focus for Friedland and Alford is on
symbolic resources and the inter-institutional
contradictions of the inter-institutional
system, for example between the market and
the family and the professions and the
corporation.
Building on the developments of the
concept by both Jackall (1988) and Friedland
and Alford (1991), Thornton and Ocasio
(1999: 804) defined institutional logics as
‘the socially constructed, historical patterns
of material practices, assumptions, values,
beliefs, and rules by which individuals
produce and reproduce their material subsis-
tence, organize time and space, and provide
meaning to their social reality.’According to
this definition institutional logics provide a
link between individual agency and
cognition and socially constructed institu-
tional practices and rule structures. While
Friedland and Alford’s approach is both
structural and symbolic, and Jackall’s is both
structural and normative, Thornton and
Ocasio’s (1999) approach to institutional
logics integrates the structural, normative,
and symbolic as three necessary and comple-
mentary dimensions of institutions, rather
than separable structural (coercive), norma-
tive, and symbolic (cognitive) carriers, as
suggested by alternative approaches
(e.g., Scott, [1995] 2001).
While varying in their emphasis, the vari-
ous definitions of institutional logics all
presuppose a core meta-theory: to understand
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individual and organizational behavior, it
must be located in a social and institutional
context, and this institutional context both
regularizes behavior and provides opportu-
nity for agency and change. The various
dimensions of the meta-theory are further
elaborated in Section IV.
Precursors
Research sometimes referred to as logics of
action provides precursors to the institutional
logics approach – similarly being based on
an interdependent set of logics that provide
some context for social influence on actors’
actions in a domain. We highlight the exam-
ples that illustrate different logics of action
operating either within or between institu-
tional orders – Fligstein’s (1987, 1990) three
conceptions of control within corporate gov-
ernance, DiMaggio’s (1991) two conflicting
models to organize the field of art museums,
and Boltanski and Thevenot’s ([1986] 1991)
multiple modes of justification to evaluate
agreements situated between six different
worlds. In reviewing these examples note the
relatively early and similar dates of publica-
tion and that all the examples involve an
analysis of conflicting logics without focus-
ing on isomorphism.
Fligstein (1990) identified three competing
conceptions of control that guide the gover-
nance of large industrial firms: the manufac-
turing, marketing, and finance conceptions.
For Fligstein, both intra-organizational power
struggles (Fligstein, 1987) and field-level
struggles to control market competition and
contest state legislation shaped the formation
of these competing conceptions, or logics of
action. Executives’ views on how to best run
the corporation were selectively influenced
by their experience in the corporation.
Employees’ ability to fight it out among each
other in the rise to the top of the corporation
occurs in a Chandlerian (Chandler, 1962)
world of significant economic and industrial
change, organizational and professional inno-
vation, coupled with a powerful State.
The eventual result was that first manufactur-
ing, then marketing succumb in power and
control to those in finance. Updating his data
on corporate control, Fligstein (2001) devel-
oped a shareholder value conception of
control as distinct from the earlier finance
conception – shifting influences away from
the corporate venue to that of the market.
For Fligstein (1985, 1987, 1990), individ-
ual executives are the primary carriers of the
contending conceptions of control. However,
these conceptions may not be explicitly
institutionalized. For example, Ocasio and
Kim (1999) suggest that the alternative
conceptions of control were never institu-
tionalized in the organizational field, as none
of them became dominant. While Fligstein’s
work is similar to the institutional logics
approach because of its implicit interplay of
institutional sectors – the professions, the
corporation, and the State, the emphasis on
the utilitarian individual and the power-
oriented organization motivated subsequent
work leading to the institutional logics
approach that more systematically integrated
conflict and cultural perspectives.
In another example of logics of action,
DiMaggio (1991) develops ideal types of
organizing the organizational field of art
museums, the Gilman and the Data models,
to understand how competing cultural
models formed the basis of a power struggle
to redefine the field; a struggle between the
elite upper classes and their social circle of
collectors and curators and the new class of
museum professionals fueled by the expan-
sion of higher education in the fine arts. The
case reveals the structuration of organiza-
tional fields is a contested process between
these two cultural models. However, there is
an evolutionary ordering with the creation of
a standardized body of knowledge, the
organization of professional associations,
and the collective definition of a field, being
historically prior to the diffusion of the Data
Model.
Boltanski and Thevenot (1991) apply a
taxonomy of cultural repertoires that present
different justifications of worth to understand
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how people disagree, compromise, and
conclude more or less lasting agreements.
Identified with the tool kit school, they view
culture as a social resource that individuals use
strategically, culture is more than motivating
action – it also justifies it. Boltanski and
Thevenot illustrate in a variety of scenarios of
interactions that what is legitimate changes
depending on the context in which it is negoti-
ated and evaluated, the ideal types being six
different worlds – the inspired, domestic, fame,
civic, market, and industrial. Compromises are
less fragile when there is groundwork to
embed them in the specific arrangements of
these worlds assuming that the embedding is
congruent with the worlds. Transposing or
putting together elements extracted from the
descriptions of the various worlds of worth can
cause actors to be placed in incongruent or
compromising situations, depending on the
particular scenario. An intuitively awkward
example illustrates their point. ‘At home, to get
his children’s attention, a father presents a
glowing picture of his ability to direct a project
at work …. The first combines elements bor-
rowed from the domestic world (a father and
his children), from the world of fame (attract
attention, present a glowing picture), and from
the industrial world (ability to direct a project)
(Boltanski and Thevenot, 1991: 227). This is an
incongruous transfer of worth from different
worlds since fathers do not receive attention
based on industrial worth through the eyes of
their children.
Fligstein’s (1985, 1987, 1990),
DiMaggio’s (1991) and Boltanksi and
Thevenot’s ([1986] 1991) approaches all
posit the existence of conceptions, models, or
logics at a supraorganizational level, and
either implicitly or explicitly emphasize the
role of culture in shaping and interpreting
individual and organizational activities.
These examples also illustrate the interrela-
tionship between individuals, organizations,
and the environment and how logics
interpenetrate multiple levels of analysis
from the social psychological to the levels of
the organizational field and societal sector.
These approaches are less focused, however,
on the role of institutions and institutional-
ization in shaping logics than the approaches
of Friedland and Alford (1991) or Jackall
(1988). While sharing with the institutional
logics perspective a focus on culture as a
source of agency (Swidler, 1986; DiMaggio,
1997), these precursors differ from an institu-
tional logics approach by deemphasizing the
structural and normative constraints imposed
by institutional logics.
META-THEORY OF INSTITUTIONAL
LOGICS
The institutional logics approach incorpo-
rates a broad meta-theory on how institu-
tions, through their underlying logics of
action, shape heterogeneity, stability and
change in individuals and organizations. Not
all aspects of the meta-theory have been
incorporated into every application of the
institutional logics perspective, due to differ-
ences among authors in emphasis, and par-
tially to the limitations of the journal
publication process. Here we propose five
principles that in our judgment underlie the
meta-theory and provide opportunities for
theoretical development and refinement.
Embedded agency
Perhaps the core assumption of the institu-
tional logics approach is that the interests,
identities, values, and assumptions of indi-
viduals and organizations are embedded
within prevailing institutional logics.
Decisions and outcomes are a result of the
interplay between individual agency and
institutional structure (Jackall, 1988;
Friedland and Alford, 1991; Thornton and
Ocasio, 1999). While individual and organi-
zational actors may seek power, status, and
economic advantage, the means and ends of
their interests and agency are both enabled
and constrained by prevailing institutional
logics (Giddens, 1984; Sewell, 1992).
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This assumption, which over time has
become known as embedded agency (Seo
and Creed, 2002; Battilana, 2006;
Greenwood and Suddaby, 2006), distin-
guishes an institutional logics approach from
rational choice perspectives on institutions
(North, 1990; Ingram and Klay, 2000) which
presume individualistic interests. This
assumption also distinguishes an institutional
logics approach from macro structural
perspectives which emphasize the primacy of
structure over action (DiMaggio and Powell,
1983; Meyer et al., 1987; Meyer et al., 1997;
Schneiberg and Clemens, 2006) and
Parsonian (Parsons 1956) perspectives on
institutions, which posit a separation of insti-
tutional from economic or technical sectors
(e.g., Meyer and Scott, 1983).
The embeddedness of agency presupposes
the partial autonomy of individuals, organi-
zations, and the institutions in society in any
explanation of social structure or action
(Friedland and Alford, 1991). Society
consists of three levels – individuals compet-
ing and negotiating, organizations in conflict
and coordination, and institutions in contra-
diction and interdependency. All three levels
are necessary to adequately understand soci-
ety; the three levels are nested (embedded)
when organizations and institutions specify
progressively higher levels of constraint and
opportunity for individual action.
Rather than privileging one level over
another, this perspective suggests that while
individual and organizational action is
embedded within institutions, institutions are
socially constructed and therefore consti-
tuted by the actions of individuals and organ-
izations (Berger and Luckmann, 1967). This
suggests that cross-level effects are critical.
One limitation, however, is that most
research, whether theoretical or empirical,
tends to emphasize one level over another.
Friedland and Alford (1991), despite their
direct call for multiple levels, emphasized the
role of the societal level. Recent work on
institutional entrepreneurship (Battilana,
2006; Greenwood and Hinnings, 2006)
has incorporated the relationship between
levels as an important mechanism for organi-
zational and institutional change.
Society as an inter-institutional
system
The main innovation of Friedland and Alford
(1991) is to conceptualize society as an inter-
institutional system. To locate behavior in a
context requires theorizing an inter-institu-
tional system of societal sectors in which
each sector represents a different set of
expectations for social relations and human
and organizational behavior. In Friedland
and Alford’s words, the capitalist market,
bureaucratic state, democracy, nuclear
family, and Christian religion are key institu-
tional sectors, each with its own distinct logic.
Thornton (2004: 44–45) elaborated this
typology in a review of a series of empirical
studies to include six sectors – markets,
corporations, professions, states, families,
and religions.
Viewing society as an inter-institutional
system allows sources of heterogeneity and
agency to be theorized and to be observed
from the contradictions between the logics of
different institutional orders. There is not just
one source of rationality, as in world systems
approaches (Meyer et al., 1997), but multiple
sources. Rather than positing homogeneity
and isomorphism in organizational fields, the
institutional logics approach views any con-
text as potentially influenced by contending
logics of different societal sectors. For exam-
ple, the health care field is shaped by the
institutional logics of the market, the logic of
the democratic state, and the professional
logic of medical care (Scott et al., 2000).
The inter-institutional system enables two
advances in institutional analysis. First, it is
non-deterministic, that is no institutional
order with its accompanying principles of
organization and logics of action is accorded
causal primacy a priori. Second, the inter-
institutional system provides researchers
with an understanding of the institutional
foundations of categories of knowledge.
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Key constructs in the analysis of organiza-
tion, such as efficiency, rationality, participa-
tion, and values are not neutral, but are
themselves shaped by the logics of
inter-institutional system. As posited by
Friedland and Alford (1991: 260) ‘Categories
of knowledge contribute to and yet depend
upon the power of institutions which make
them possible. Without understanding the
historical and institutional specificity of the
primary categories of analysis, social scien-
tists run the risk of elaborating the rationality
of institutions they study, and as a result
become actors in their reproduction.’
The material and cultural
foundations of institutions
A key assumption of an institutional logics
perspective is that each of the institutional
orders in society has both material and cul-
tural characteristics (Friedland and Alford,
1991). For example, both the family and reli-
gion, while typically not considered part of
the economic sphere, are directly involved in
the production, distribution, and consump-
tion of goods and services (Becker, 1976).
Similarly, markets, while often not consid-
ered part of the cultural sphere, are directly
shaped by culture and social structure,
including networks of social relationships as
well as structures of power, status, and dom-
ination (Granovetter, 1985). Rather than
privileging material or cultural explanations
of institutions, an institutional logics per-
spective recognizes that institutions develop
and change as a result of the interplay
between both of these forces.
In explaining human behavior and organi-
zational structure, Friedland and Alford
(1991) argued that theories which ‘retreat
from society,’ – emphasizing market mecha-
nisms to aggregate individual utilities and
preferences, organizational competition,
technology, and resource dependence – begin
to fail. Instead, institutional sectors, for
example families, professions, states, and
religions locate the origins of values and
utilities – and these values and utilities cannot
be traded off as simple economic alternatives.
Thus, an important underlying assumption is
not whether motivation and action are rational
or irrational; instead the argument is how the
comparative conflict and conformity of insti-
tutional logics (which are both material and
cultural) influence human and organizational
behavior (Thornton, 2002).
This assumption reflects a cultural turn in
the study of conflict and agency. This
cultural turn is motivated by the thorny ques-
tion of how individual agents know they have
economic or political struggles on their
hands and what is an appropriate way to
respond to them. For example, Thornton and
Ocasio (1999) and Thornton (2004) showed
that resource competition was actually
greater in higher education publishing in the
era of the editorial logic – but this competi-
tion was interpreted differently and
responded to in a non-conflictual manner.
With the rise of a market logic, resource
competition, although less significant, had
greater effects on organizational actions and
decisions. Stinchcombe (2002: 429) has
commented around this issue – needing
culture to define the meaning of power and
competition – viewing it as a causal sequenc-
ing problem. His argument is that if power is
theorized as a first-order construct in
explaining change, independently of culture,
two problems need to be addressed. First,
power is created in the course of action: it
does not occur prior to the action that it
explains. Second, the decision to use power
is an intentional, strategic choice; however, it
is not always possible for actors to know the
cultural framing or menus of available
options in advance of any action. Thus,
instrumental political theories of action may
be incomplete explanations because the
necessary sequence of events is unlikely
to occur. Consequently, cultural explana-
tions are necessary adjuncts to structural
explanations.
In making way for the role of culture
in shaping action, institutional logics
incorporate both the symbolic and the
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normative components of culture. Following
Geertz (1973) and Douglas (1986),
DiMaggio and Powell (1991) and Friedland
and Alford (1991) highlighted the symbolic
and cognitive dimensions of institutions and
institutional logics. But symbolic and cogni-
tive explanations of institutions and institu-
tional logics are incomplete without also
incorporating the normative dimensions
(Hirsch, 1997; Mizruchi and Fein, 1999).
Sociologists, rejecting the strong view of
internalization of universalistic values and
cultural norms proposed by Parsons (1951)
and early Merton (1957), have been reluctant
to rely on social norms as an explanation for
behavior. Even DiMaggio and Powell (1983),
in discussing the normative forces driving
isomorphism, emphasized the role of formal
education, legitimating authorities, and
professional networks, with an unclear role
for social norms, per se. An institutional
logics approach, in contrast, emphasizes how
institutions provide social actors with a
highly contingent set of social norms
(Jackall, 1988), where behavior is driven
not by a logic of consequences but by a
logic of appropriateness (March and
Olsen, 1989).
The requirement of norms as a critical
dimension of institutions and their underly-
ing logics does not imply universalism,
moral behavior by individuals, nor deeply
internalized values, all part of Parson’s
(1951) conceptions of norms. An institu-
tional logics approach shares with
Granovetter (1985) and others the over-
socialized critique of Parsons, while at the
same time suggesting that ignoring norms
implies an under-socialized view of individ-
ual and organizational behavior. A focus on
identification (see below) as the mechanism
by which cultural norms exert their effects
over individuals and organizations
(Kelman, 1956, 2006; O’Reilly and
Chatman, 1996) distinguishes an institutional
logics approach from an over-socialized
conception of institutions that focuses on
internalization and value commitments and
an under-socialized conception that focuses
on resource dependencies and political
interests.
An institutional logics approach views
norms as drawn from experience and exem-
plars of the institution (Jackall, 1988; Ocasio,
1999). Norms imply ambivalence about uni-
versalistic principles, with both dominant and
subsidiary norms co-existing. This suggests a
probabilistic, rather than a deterministic view
of adherence to dominant norms of behavior,
and the identification of specific contingen-
cies where subsidiary norms prevail.
Institutions at multiple levels
The institutional logics approach as meta-
theory provides tremendous capacity to
develop theory and research across multiple
levels of analysis. For Friedland and Alford
(1991) the focus was on societal-level logics
and their effects on individuals and organiza-
tions. But the meta-theory that has emerged
is broader, and institutional logics may
develop at a variety of different levels, for
example organizations, markets, industries,
inter-organizational networks, geographic
communities, and organizational fields. This
flexibility allows for a wide variety of mech-
anisms to be emphasized in research and
theoretical development and may be one
reason the term institutional logics has
caught on among scholars (Kuhn, 1962).
Theoretical mechanisms are elements of
theory that operate at a different level of
analysis (e.g., individuals or organizational
fields), than the main phenomenon being the-
orized about (e.g., organizations or groups).
To identify the effects of mechanisms across
levels of analysis makes the theory more pre-
cise as well as more general (Stinchcombe,
1991). Therefore, to apply the institutional
logics meta-theory it is critical that the level
of analysis at which institutionalization
occurs be clearly specified, whether at a
societal level (Friedland and Alford, 1991),
or at other levels.
For example, Haveman and Rao (1997), in
their study of the coevolution of institutions
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and organizations in the California thrift
industry, studied how with the rise of
Progressivism, changes in institutional logics
at the societal level affected the formation of
distinct organizational forms at the industry
level. In particular, their analysis shows how
plans that embodied bureaucratic logics and
rational decision making were more likely to
thrive than those that embodied a community
logic and mutual cooperation among actors.
The emphasis here is on institutional logics
at the societal level affecting the selection of
alternative forms at the organizational level.
A secondary, and less developed, aspect of
the coevolutionary process in the paper sug-
gests that as organizational forms that
embody a particular institutional logic evolve
and become institutionalized at the industry
level, the corresponding societal-level insti-
tutional logics further evolves and becomes
further institutionalized.
The emphasis on societal-level institutions
is illustrated by the work of Bhappu (2000),
which draws on anthropological analysis of
the ancient Japanese family system to argue
how the institutional order of the family is
the origin of the institutional logic of
Japanese corporate networks. Scott et al.
(2000) examine how societal-level profes-
sional, government, and managerial-market
logics shape the transformation of the health
care organizational field, from one domi-
nated by professional logics to one where
the three logics co-exist and no single one
dominates.
In Jackall’s (1988) ethnographic analysis,
the emphasis is on institutionalization at the
organizational level. Here the focus in on the
structures of managerial careers and how
they shape the formation of a managerial
ethos that shapes decision making and action
in organizations. The formal structures of the
organizations combine with institutionalized
practices of fealty and patronage to create an
institutional logic termed patrimonial
bureaucracy. While clearly focusing on orga-
nizational-level institutionalized practices,
Jackall’s analysis suggests how these
practices also reflect cultural forces at the
societal level. Jackall argues that the formal
bureaucratic logic, as characterized by Weber
([1922] 1978), had little affinity with
American individualistic affinities and
cultural values, with the hybrid logic of
patrimonial bureaucracy thereby emerging.
Thornton and Ocasio (1999) focus on the
formation of industry-level institutional
logics in higher education publishing. They
propose that industries are a relevant bound-
ary for establishing institutional logics
because producers in an industry establish a
common identity through social compar-
isons, status competition, and structurally
equivalent network positions (White, 1992).
Their analysis and the subsequent research
by Thornton (2001, 2002) focus on the
effects of shifts, at the industry level, from an
editorial logic to a market logic. While focus-
ing on industry-level logics that both emerge
from and sustain market competition, these
logics do not emerge in the industry de novo,
but are shaped by higher-order societal
professional and market logics. The link
between industry-level logics and the logics
of the inter-institutional system is further
developed by Thornton (2004).
Research on institutional logics adopting a
field-level perspective has emphasized the
existence of competing logics within the
field. For example, in a qualitative analysis
of U.S. academic health centers, Kitchener
(2002) explores the effects of competing
managerial and professional logics on the
responses to merger initiatives. Reay and
Hinings (2005) adopt a similar approach in
their analysis of structural change in
Canadian health care organizations.
Greenwood and Suddaby (2006) focus
instead on contradictions between institu-
tional logics in organizational fields and
suggest that boundary bridging organiza-
tions are sources of change in institutional
logics (see below). Lounsbury (2007)
examines competing trustee and professional
logics in the mutual fund industry. In his
analysis geographic communities are also a
source of institutionalization of logic, as
Boston and New York are centers of the
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trustee and professional logics respectively,
leading to different patterns of organizational
change in the two areas.
The variety of levels of analysis studied
suggests the fecundity of the institutional
logics perspective. The breadth of the meta-
theory may have encouraged imprecision in
research, and it could be inferred that any
logic or interpretive scheme, at any level of
analysis, may be characterized as an institu-
tional logic. We suggest otherwise.
Institutional logics are more than strategies
or logics of action as they are sources of
legitimacy and provide a sense of order and
ontological security (Giddens, 1984: Seo and
Creed, 2002). Research on competing
institutional logics, as some of the work on
organizational fields described above, often is
not precise on the level of which logics
become institutionalized, or whether they
should be considered institutional logics at all.
Historical contingency
Historical contingency is a key meta-theoret-
ical assumption of the institutional logics
approach. In general this assumption is con-
sistent with institutional theory, which focuses
attention on how larger environments affect
individual and organizational behavior. While
the six institutional orders of the inter-institu-
tional system in western societies previously
identified have remained influential, empiri-
cal observation also informs us that they
differed in development and importance over
time. For example, modern societies have
greater emphasis on corporate and state influ-
ences and earlier societies in general empha-
sized family and religion to a larger extent. In
particular, during the last 30 years the promi-
nence of market logics has been found in
multiple studies in various contexts, including
Thornton and Ocasio (1999) in higher educa-
tion publishing, Scott et al. (2000) in health
care, Lounsbury (2002) in financial interme-
diation, Zajac and Westphal (2004) in equity
markets, and Meyer and Hammerschmidt
(2004) in public management.
Zajac and Westphal’s analysis of historical
contingency in financial markets (2004) is
notable in viewing markets themselves as
shaped by institutional forces. The paper
finds that the emergence of an agency
perspective in the 1980s led to historical
shifts in stock market response to stock
repurchases, from an unfavorable reaction,
consistent with a professional logic, to a
favorable one, consistent with an agency
logic. The paper suggests that the market’s
reaction to particular corporate practices are
not, as financial economists contend, simply
a function of the inherent efficiency of such
practices, but are influenced by the prevail-
ing institutional logic.
However, note with the current rise of reli-
gion in world discourse that institutional
logics, both in their elaboration and relative
pattern of dominance between institutional
orders, are not simply an evolutionary or
linear model of development driven by scien-
tific progress or market rationalization. Here
the institutional logics approach departs dis-
tinctly from Meyer and his colleagues’ work
noted earlier on modern rationalization. For
example, Thornton, Jones, and Kury (2005)
illustrate other models of the historical
contingency of institutional logics that show
cyclical or punctuated equilibrium functional
forms in their comparison of the cases of
accounting and architecture.
Many studies reveal findings that are valid
in one historical time period but not in others.
Thornton (2004: 127) presents a meta-analy-
sis partitioning the findings on the higher
education publishing studies by universal
and particular effects. Founder and owner-
ship effects were found to be universal across
time, whereas relational and structural effects
were particular to a historical period in which
an institutional logic prevailed. Many find-
ings typically predicted by resource depend-
ence and economic theories are found to be
historically contingent. Note that the models
in this meta-analysis controlled for differ-
ences in organization age, size, and resource
competition and other macro economic
variables. Note also that the meta-analysis
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design controls for differences in industry,
product market, data set, population and
sampling methods, and statistical modeling
procedures. The universal founder effect
suggests the persistence of individual entre-
preneurs or leaders to hang tough on a logic
of action, regardless of contradictory logics
prevailing in their surrounding environment.
The objective of recognizing historical
contingency as a meta-theoretical assump-
tion is to explore if the effects of economic,
political, structural, and normative forces
affecting individuals and organizations are
indeed historically contingent. Moreover, the
goal is not to develop universal theories of
organizational behavior and structure but to
examine whether such theories, often
assumed to be universal through time and
space, are instead particular to historical time
and cultural environments (Thornton, 2004:
130–133).
INSTITUTIONAL LOGICS AS
METHOD OF ANALYSIS
Theory and methods go hand-in-hand and the
meta-theoretical principles reviewed in the
preceding section have been examined
through the creative development of meth-
ods. While many social science researchers
have been skeptical of cultural effects
(DiMaggio, 1994), in our view researchers
are rising to the challenges of measuring the
effects of content, meaning, and change in
institutions using the institutional logics
perspective. In this endeavor, we comment
on the use of event history analysis, interpre-
tive methods, triangulation, and ideal types.
Foundational studies have combined event
history (Tuma and Hannan, 1984) and inter-
pretive methods, for example from archival
records (Haveman and Rao, 1997), personal
interviews (Thornton and Ocasio, 1999), and
content analysis of professional journals
(Scott et al., 2000). Event history models typ-
ically use historical time (not organization
age) as the clock, particularly when historical
contingency is a focus of the analysis
(Thornton, 2004: 126–127). They also can
accommodate data at multiple levels of
analysis, for example at the individual, orga-
nizational, and environmental – making it
possible to partition material from cultural
effects (DiMaggio, 1994). The challenge of
measuring cultural effects is often
approached by examining how one or more
of the institutional orders of the inter-institu-
tional system are changing in its strength of
influence on individual and organizational
behavior. These types of studies require
identifying a scientific boundary to draw a
population or sample for hypothesis testing –
such as an industry, market, or profession.
Note that the organizational field concept is
problematic in this sense, unless it can be
defined, for example as a geographic
community, positional community, i.e. CEOs
of Fortune 500, or inter-organizational
network.
The development of interpretive methods
enriches the possibilities of the types of data
and data gathering methods available for
researchers to examine the content and
meaning of institutions. Scott et al. (2000),
for example. used content analysis of publi-
cations to identify the key terms important to
the actors of the professions and corporate
institutional orders of the health care system
and then measured the frequency of vocabu-
laries associated with the institutional orders,
signaling the emergence and decline of these
alternative institutional logics.
Phillips and Hardy (2002: 55) define
methods from discourse theory and describe
how they have been borrowed to further
develop institutional theory and methods.
Data sources include, for example, inter-
views, focus groups, archival documents and
records, naturally occurring conversations,
political speeches, newspaper articles,
novels, stories, cartoons, and photographs.
Methods of analysis include, for example,
genealogy, ethnography, conversation analy-
sis, content analysis, narrative analysis,
critical discourse analysis, and rhetorical
analysis that make use of a variety of ‘texts,’
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including spoken words, pictures, symbols,
and cultural artifacts among others. Suddaby
and Greenwood (2005), for example, used
rhetorical analysis of vocabularies (words) to
expose contradictory institutional logics
embedded in historically different
understandings of professionalism to explain
the multidisciplinary partnership as a new
organizational form.
While this vibrant resurrection and devel-
opment of qualitative methods strengthens
the capacity to interpret meanings, we
caution that the strength of the foundational
studies of the institutional logics perspective
has been on triangulation of types of data and
methods of analysis – being reliant on both
qualitative and quantitative methods. One
method that integrates interpretive and
hypothesis testing approaches is the use of
ideal types.
Ideal types are a method of interpretive
analysis for understanding the meaning that
actors invest their actions with. They were
first developed by the classic theorists as a
theoretical tool to facilitate intelligible
comparisons (Weber, 1922). Researchers
have further developed this method of analy-
sis to suggest testable hypotheses (Thornton
and Ocasio, 1999).
In theory building, ideal types require the
development of formal typologies composed
of two parts: (a) the description of ideal types
and (b) the set of assertions that relate the
ideal types to the dependent variable (Dotty
and Glick, 1994). While often derived from
empirical observation, ideal types are not for
describing an organizational field, but
instead are theoretical models for comparing
the effects of various meanings in a location
with a definable boundary. They do not
precisely conform to reality because of
deliberate simplification to afford compara-
tive analysis and multidimensional classifi-
cation of phenomena not restricted by the
events of the selected cases. Ideal types
assign a hypothetical meaning that can be
used as a yardstick to compare and contrast
hypothesized and actual meaning and
behavior.
Swedberg (2005: 3), in drawing from
Weber, gives an example. ‘When the wood-
cutter brings down his axe on the wood, it
can be a case of wage labor, provision for
one’s household, or form of recreation – and
which one it is depends on the meaning with
which the action is invested.’In the Appendix
we include examples of ideal types devel-
oped from the analysis of the effects of insti-
tutional logics in three industries, higher
education publishing, accounting, and
architecture.
DiMaggio’s (1991: 271) analysis of the
two models of organizing art museums is a
precursor to bringing back the use of ideal
types in institutional analysis. His categories
on the Y axis focused on the mission, defini-
tion of art, legitimate perception, education,
major publics, control, strategy, building, and
living artists – showing how the X axis spec-
ifies the Gilman and Data models varied on
these universal dimensions. Rao et al. (2003)
also used ideal types in their characterization
of classical and nouvelle French cuisine to
understand how new logics displaced old and
ushered in new role identities. Their
categories on the Y axis examine the dimen-
sions of culinary rhetoric, rules of cooking,
archetypal ingredients, role of the chef, and
organization of the menu – showing how the
X axis defined the two characteristics of
classical and nouvelle cuisines. However,
what is the causal connection between
DiMaggio’s and Rao et al.’s ideal types and
the inter-institutional system? Should we, for
example, intuit that the Gilman Model was
influenced by the institutional logics of the
family and the Data Model by the logics of
the professions and the state?
Thornton and Ocasio (1999: 808–809) and
Thornton (2004) explicitly anchor the higher
education publishing ideal types in the
domains (orders) of the inter-institutional
system – revealing their origins. Their
categories on the Y axis examined form of
capitalism, organizational identity, legiti-
macy, authority structures, mission, focus of
attention, strategy, logics of investment, and
rules of succession – showing how the X axis
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specifying the editorial and market logic
varied on these general elements.
Once derived from interview and archival
data they pushed the standards further
by externally validating the ideal types
with publishers’ experiences and their use
in the Stanford University Publishers
College.1
HOW LOGICS SHAPE INDIVIDUAL
AND ORGANIZATIONAL ACTION
Collective identities and identification
A mechanism by which institutional logics
exert their effects on individuals and organi-
zations is when they identify with the collec-
tive identities of an institutionalized group,
organization, profession, industry or popula-
tion (Tajfel and Turner, 1979; March and
Olsen, 1989). A collective identity is the
cognitive, normative, and emotional connec-
tion experienced by members of a social
group because of their perceived common
status with other members of the social group
(Polleta and Jasper, 2001). Collective
identities emerge out of social interactions
and communications between members of
the social group (White, 1992). As individu-
als identify with the collective iden-
tity of the social groups they belong to
they are likely to cooperate with the
social group (Tyler, 1999; Brickson, 2000),
abide by its norms and prescriptions
(March and Olsen, 1989; Kelman, 2006),
and seek to protect the interests of the collec-
tive and its members against contending
identities (Tajfel and Turner, 1979;
White, 1992).
Individuals are members of multiple social
groups with a collective identity, including
professions and occupations (Abbott, 1988;
Fine, 1996; Glynn, 2000), gender, racial and
ethnic groups (Cerulo, 1997; Lamont and
Molnar, 2002), social movements (Benford
and Snow, 2000; Rao et al., 2003), and indi-
vidual organizations (Selznick, 1957; Albert
and Whetten, 1985; Dutton and Dukerich,
1991). Collective identities also emerge
among populations of organizational
forms (Haveman and Rao, 1997; Carroll
and Hannan, 2000), market competitors
(Porac et al., 1989; White, 1992; Peteraf
and Shanley, 1997; Thornton and
Ocasio, 1999), and industry associations
(Aldrich and Fiol, 1994; King and Lenox,
2000).
As collective identities become institution-
alized, they develop their own distinct insti-
tutional logic, and these logics prevail within
the social group (Jackall, 1998). These
effects of institutional logics are emphasized,
among others, in the work of Haveman and
Rao (1997), on the theory of moral senti-
ments embodied in the collective identities of
organizational forms; in Thornton and
Ocasio (1999)’s shift from an editorial logic
to a market logic in the collective identity of
competitors in the higher education
publishing market; in Jones and Livne
Tarandach’s (Forthcoming) rhetorical
strategies of architects based in the institu-
tional logics of business, profession, and
state that focus attention on distinct
competencies – servicing clients, building
great architecture, or managing facilities, and
in Lounsbury’s (2002) analysis of collective
identities embodied in professional
associations in the field of finance. In
all of these cases, albeit at different
levels of analysis, identification with the
respective institutional logics occurs
directly, as the identification with the
collective is equivalent to the identifi-
cation with the institutional logic prevailing
in the collective, whether they are organiza-
tional forms, market competitors, or profes-
sional associations, or any other social
grouping.
Contests for status and power
The contests for status and power are rela-
tively universal mechanisms for individual
and organizational actions. However, an
institutional logics perspective suggests that
these mechanisms are conditioned by pre-
vailing institutions (Fligstein, 1996;
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Thornton and Ocasio, 1999; Lounsbury and
Ventresca, 2003). While power and status
differences are present in all organizations,
researchers can identify the sources of power
and status, their meaning and consequences
by understanding how these power and status
differences are associated with the prevailing
institutional logic. Institutional logics shape
and create the rules of the game, the means-
ends relationships by which power and status
are gained, maintained, and lost in organiza-
tions (Jackall, 1988; Ocasio, 1999;
Lounsbury and Ventresca, 2003). Social
actors rely on their understandings of institu-
tional logics in the competition for power
and status and in doing so generate the
conditions for the reproduction of prevailing
logics.
For Jackall (1988), competition for power,
status, and position in organizations shapes
the creation and reproduction of a patrimo-
nial bureaucratic logic in U.S. corporations.
Managers, driven by career concerns, estab-
lish and maintain a system of patronage and
fealty, where strong social ties to those in
position of authority determine power and
privilege in organizations. Achieving career
success requires social actors to play by the
rules, with language use and symbolic
management serving to reproduce the formal
structure, while promotion patterns parallel
the patrimonial structure, serving to
reproduce the informal status hierarchies and
power structures.
Thornton and Ocasio (1999) focus on the
link between institutional logics and power
structures. They find that under an editorial
logic, publishers’ means and ends are shaped
by author-editor relationships, and power
structures are determined by organization
size and structure. Under a market logic,
publishers’ means - end relationships are
shaped by resource competition and acquisi-
tions, and power structures are determined by
competition in the product market and the
market for corporate control.
Lounsbury (2002) focuses on status
competition and status mobility in the field
of finance. A shift from a regulatory logic to
a market logic created a shift from status
driven by reputation within business practice
to reputation driven by normative conformity
to increasingly mathematical economics.
Professional finance associations led the
transformation to a market logic in this field.
New professions such as money management
and securities analysis helped diffuse
new financial theories such as portfolio and
risk management, and status within the
field became increasingly determined by
familiarity and expertise with new financial
theories. As social actors gained status and
position by their reliance on financial theo-
ries, the market logic gained prominence in
the field.
Zhou (2005) relies on an institutional logic
perspective to explain occupational prestige
ranking. Building on Weber’s argument that
social statuses or social honors are related,
but distinct from one’s economic resources
or structural positions, Zhou is searching for
an explanation of how a hierarchical ordering
of occupations must be recognized through a
meaning system shared by members of the
same community. He proposes an institu-
tional logic of social recognition to explicate
the causal mechanisms. What is appropriate
and legitimate must be seen as transcend-
ing self-interests and group boundaries, and
be accepted by a large audience. Overall,
occupation prestige should vary system-
atically with the basis for making legitimate
claims and with group membership
as a function of their inclusion into the
realm of a shared institutional logic (Zhou,
2005: 98).
Classification and categorization
A key mechanism by which institutional
logics shapes individual cognition is through
social classification and categorization
(DiMaggio, 1997). Cognitive psychologists
emphasize the importance of categories in
shaping individual cognition (e.g., Rosch,
1975; Medin, 1989). While psychologists
who study categories typically emphasize the
study of categories of objects occurring in
nature, the classification and categorization
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of social and organizational categories is
determined by social institutions (Douglas,
1986; Searle, 1995). Given the institutional-
ization of categories, individuals take for
granted that the categories of organizing
activity such as CEO, return on assets,
human resources, corporate governance,
multidivisional structures, patents,
restaurants, to name but a few common sub-
jects of study, are not categories that exist in
nature but socially constructed, institutional
categories (Berger and Luckmann, 1967).
Institutional logics provide agents within
organizations with socially constructed
systems of classifications that constitute
categories of social actors (Mohr and
Duquenne, 1997), organizational forms
(Haveman and Rao, 1997), products
(Lounsbury and Rao, 2004), and organiza-
tional agendas (Ocasio and Joseph, 2005).
Changes in institutional logics lead to the
creation of new categories (Rao et al., 2003)
and to changes in meaning of existing cate-
gories (Ruef, 1999; Ocasio and Joseph,
2005). Categories, as a basic unit of cogni-
tion, do not imply mindless cognition, as do
schemas and scripts, but are a necessary
component of all mindful, agentive behavior.
Mohr and his collaborators have
emphasized the link between systems of
categories and institutional logics. Mohr and
Duquenne (1997) analyze the changing insti-
tutional logics in poverty relief by examining
how they provide a different system of
classification of the poor (distressed, desti-
tute, fallen, deserving, homeless, indigent,
misfortunate, needy, poor, stranger, and
worthy) and the categorization of organiza-
tional practices (giving advice, giving food,
giving money, paying a person to chop wood,
placing a relief applicant in an asylum,
and so on). Mohr and Guerra-Pearson
(Forthcoming) studied how categories of
actors, organizational forms, and organizing
activities varied by competing institutional
logics. Breiger and Mohr (2004) develop
network methodologies among systems of
categories to empirically measure institu-
tional logics.
Categorization processes have been partic-
ularly central to work on institutional logics
that focuses on logics residing in competing
organizational forms (Haveman and Rao,
1997; Rao et al., 2003). Distinct categories of
forms are shaped by changes in societal level
institutional logics (Haveman and Rao,
1997). At the organizational field level,
Rao et al. (2003) explore how changes in
the categories of French cuisine led to
self-categorization by industry entrepreneurs
and triggered institutional transformation.
Rao et al. (2005) explored how organiza-
tional change occurs through bricolage
among categories of organizational products
associated with alternative institutional
logics.
Research has also explored how changing
logics lead to changes in the meaning of
existing categories. Ruef (1999) explores the
shift to a market logic in the heath care field
by examining the changing systems of
categories that underlie discourse among
technical, managerial, and policy-oriented
health care professionals. Ruef’s analysis
focuses on the relationships among linguistic
categories and finds that a historical shift
in logics results in changes in the meaning
of underlying categories of organ-
izational forms. With the rise of a market
logic there is increased integration of
issues of financing and risk bearing across
the various forms in the organizational field,
and less focus across the spectrum on
issues of access. With the rise of a market
logic the meaning of a hospital or a
health maintenance organization shifts, as do
other organizational forms, with less differ-
entiation among forms in their focus on
financing.
Attention
Contemporary perspectives on organiza-
tional attention emphasize how organiza-
tional responses to economic and social
factors are mediated by the attention of
organizational decision makers (Ocasio,
1995, 1997). Theoretical and empirical
research provides key mechanisms to explain
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how institutions moderate organizational
attention.
In a theoretical analysis of how organiza-
tions respond to economic adversity, Ocasio
(1995) proposed that institutional logics
affect the allocation of attention to alternative
schemas for perceiving, interpreting, evaluat-
ing, and responding to environmental
situations. According to theory of allocation
of attention, institutional logics provide indi-
viduals and organizations with a set of rules
and conventions – for deciding which prob-
lems get attended to, which solutions get
considered, and which solutions get linked to
which situtations (March and Olsen, 1976).
Ocasio (1997) suggests two mechanisms by
which institutions structure attention: (1) by
generating a set of values that order the legit-
imacy, importance, and relevance of issues
and solutions; and (2) by providing decision
makers with an understanding of their
interests and identities. These interests and
identities generate in turn a set of decision
premises and motivation for action.
Thornton and Ocasio (1999) developed the
role of industry-level institutional logics in
structuring attention in organizational
decisions on executive succession. The
theory was further developed in application
to decisions on acquisitions (Thornton,
2001), and the rise of multidivisional
structures (Thornton, 2002) in the higher
education publishing industry. The core of
the argument in these empirical studies is
that institutional logics focus the attention of
decision makers on issues and solutions that
are consistent with prevailing logics.
Institutional logics focus attention on issues
and solutions through a variety of mecha-
nisms, including determining their appropri-
ateness and legitimacy, rewarding certain
forms of political behavior in organizations,
shaping the availability of alternatives, and
selectively focusing attention on environ-
mental and organizational determinants of
change. A key finding of these empirical
analyses is that the effects of resource
competition and resource dependencies are
not universal effects, but are contingent on
organizational attention to market forces that
are salient under a market logic, but not
under an editorial logic. Thornton (2004:
44–45) further developed the role of institu-
tional logics in structuring attention by
linking these organization and industry level
analyses to societal-level institutional logics.
Relying on content analysis, Glynn and
Lounsbury (2005) examine the shifts in focus
of attention by newspaper critics of the
Atlantic Symphony Orchestra from an
aesthetic logic prior to a strike at the orches-
tra to a market logic post-strike. Consistent
with the effects of institutional logics on
attention, they find that pre-strike newspaper
critics, in their reviews, focus attention on the
virtuosity and musical interpretation (associ-
ated with an aesthetic logic) and post-strike
critics increased their attention to ticket
sales, production of recordings, and audience
reactions (consistent with a market logic).
The ascendancy of the market logic did not
imply, however, a rejection of aesthetic con-
cerns, but the blending of the two logics.
In his study of competing logics in the
mutual funds industry, Lounsbury (2007)
relies on attention as a mechanism to show
how non-growth funds and Boston-based
funds focus attention on the issue of product
costs, while growth funds and New York-
based funds focus attention on the issue of
fund performance. The empirical results sup-
port this argument, demonstrating how the
effects of market forces are contingent on
prevailing organizational logics, as mediated
through processes of attention.
CHANGE IN INSTITUTIONAL
LOGICS
‘How can actors change institutions if their
actions, intentions, and rationality are all
conditioned by the very institution they wish
to change’ (Holm, 1995: 398). The institu-
tional logics approach sheds light on this
problem of embedded agency by conceptual-
izing society as an inter-institutional system
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in which logics are characterized by cultural
differentiation, fragmentation, and contradic-
tion (DiMaggio, 1997). This differentiation,
fragmentation, and contradiction is
evident both within and between institu-
tional orders (Friedland and Alford, 1991).
We focus on three mechanisms of change:
institutional entrepreneurs, structural
overlap, event sequencing, and a fourth
topic, often an antedecent or conse-
quence of change – competing institutional
logics.
Institutional entrepreneurs
Institutional entrepreneurs are the agents that
create new and modify old institutions
because they have access to resources that
support their self-interests (DiMaggio,
1988). By definition, institutional entrepre-
neurs can play a critical role in perceiving
institutional differentiation, fragmentation,
and contradiction by virtue of the different
social locations they may occupy in the inter-
institutional system and in taking advantage
of the opportunities it presents for institu-
tional change (Thornton, 2004). Fligstein
(1997), for example, describes how entrepre-
neurs perceive and exploit contradictions in
institutional logics to further their self-
interest. DiMaggio (1988: 14–15) argues that
the creation of institutions requires an
institutionalization project in which the
claims of institutional entrepreneurs are sup-
ported by existing or newly mobilized actors
who stand to gain from the success of the
institutionalization project (DiMaggio,
1991). The challenge for the institutional
entrepreneur is to create an environ-
ment to successfully enact the claims of a
new public theory. Sometimes this involves
institutional entrepreneurs organizing from
the center of an established environment
(Suddaby and Greenwood, 2005) and at
other times it may stem from the periphery
of emerging fields (Maguire, Hardy, and
Lawrence, 2004).
However, the environments that institu-
tional entrepreneurs enact to garner control
of resources are not just material, they are
also symbolic. To use an analogy to the
bricoler (Levi-Strauss, 1966), institutional
entrepreneurs creatively manipulate social
relationships by importing and exporting
cultural symbols and practices from one
institutional order to another. In theory, the
different social locations of the institutional
orders bring to light different cultural tools
for institutional entrepreneurs (Thornton,
2004). Note the focus on cultural resources
as distinct from material resources; culture
being something people strategically use,
deploy, and mobilize. This focus is consistent
with the meta-theory of the institutional
logics approach which views culture as both
a motivation as well as a justification of
action.
There are several mechanisms that institu-
tional entrepreneurs use to manipulate cul-
tural symbols and practices, for example
story telling (Zilber, 2006), rhetorical
strategies (Suddaby and Greenwood 2005;
Jones and Livne-Tarandach, forthcoming),
and tool kit approaches (Swidler 1986;
Boltanski and Thevenot 1991).
Suddaby and Greenwood (2005) showed,
for example, in their study of organizational
forms in the accounting industry, how institu-
tional entrepreneurs used ‘rhetorical strate-
gies’ to reinterpret and manipulate prevailing
symbols and practices. Rhetorical strategies
or ‘institutional vocabularies’ were used by
entrepreneurs to affirm or discredit the dom-
inant institutional logic which defined the
legitimacy of organizational forms. To
discredit an institutional logic and bring
about institutional change, entrepreneurs
exposed the contradictions or ameliorated the
contradictions by associating them with
broader cultural analogies (Douglas, 1986;
Strang and Meyer, 1994).
In returning to Holm’s (1995) concern
with embedded agency, Leca and Naccache
(2006) argue from a critical realist
perspective that the concept of institutional
entrepreneur does not completely address
the paradox of embedded agency because the
concept by definition does not take
into account the interrelated sequencing of
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structures and actions and the causal emer-
gent properties of both structures and
actions. They argue for a critical realist
approach in which actors use the causal
powers of pre-existing structures to
create new institutions or challenge exist-
ing ones. We highlight their important
insight as it motivates our subsequent discus-
sion of structural overlap and event
sequencing.
Structural overlap
Structural overlap occurs when individual
roles and organizational structures and func-
tions that were previously distinct are forced
into association (Thornton, 2004). Mergers
and acquisitions are an example of structural
overlap when organizational actors from
divergent cultures are forced into associat-
ion, triggering a change in institutional
logics guiding the firm. Structural over-
lap across systems with differentiated
logics creates contradiction in organiza-
tions and organizational fields, creating
entrepreneurial opportunities for institutional
change.
For example, Stovel and Savage (2005)
showed how a merger wave exposed compet-
ing institutional logics and triggered the elab-
oration of the modern, mobile, bureaucratic
career in the financial sector. Thornton,
Jones, and Kury (2005) illustrated how the
structural overlap when accounting firms
incorporated management consultants into
their organizations brought professional and
market logics head to head and conflicted the
focus of attention of accountants from over-
seeing the accuracy of client’s books to using
exposure to accounting ledgers to identify
consulting clients. Greenwood and Suddaby
(2006), in their analysis of a pioneering new
organizational form, the multidisciplinary
practice (MDP) within the field of business
services, theorize a case of structural overlap
in which elite organizations are more likely
to come into contact with competing and
contradictory logics because they bridge
different organizational fields. They point
out that this case of institutional change is
interesting because it is inconsistent with
extant theory which would predict
change from the periphery, not the center
of the field. They argue that contact
with institutional logics in multiple and
different organizational fields increases
the awareness of and experiences with
contradictions in logics, which lowers con-
straints and embeddedness of actors and
enables central actors to become institutional
entrepreneurs.
Event sequencing
Event sequencing is defined as the temporal
and sequential unfolding of unique events
that dislocate, rearticulate, and transform the
interpretation and meaning of cultural sym-
bols and social and economic structures
(Sewell, 1996: 844). For example, this can be
changes in cultural schemas, shifts of
resources, and the emergence of new sources
of power. As noted above, because structures
are often overlapping, any rupture has the
potential of cascading into multiple changes,
particularly when the events are character-
ized by heightened emotion, collective
creativity, and ritual. The accumulation
of events can result in a path-dependent
process in which shifts in the symbolic inter-
pretation of events are locked in place by
simultaneous shifts in resources. Such
sequencing produces more events that
reinforce or erode the dominance of the
incumbent logic.
Event sequencing has been used as an ana-
lytical method to address the problem of
embedded agency or what Barley and Tolbert
(1997) term conflation and the problem of
reducing structure to action or action to
structure. (How such event sequences inter-
sect to reveal causation has been extensively
examined in the literature on historical com-
parative methods of analysis (Abbott, 1990;
Griffin, 1992; Sewell, 1992, 1996)). There
are several ways to assess the impact of event
sequencing on institutional change –
for example, nominal and ordinal compar-
isons and narrative analysis (Mahoney,
1999). These are different strategies of
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macro-causal analysis – ways that
researchers iterate between theory and his-
tory in identifying the causes of an outcome.
The narrative analysis method is used to
understand the ordering of circumstantial
detail in searching for analogies that are the
foundation for new and convincing accounts.
In the institutional logics literature, it is the
institutional orders of the inter-institutional
system that provide the meta-theory which
points to these analogies and that prevent the
analysis from getting bogged down in the
minutia of historical details.
For example, the case of the change in
institutional logics in higher education
publishing from 1958 to 1990, from an
editorial (based in the logics of the family
and the professions) to a market logic,
reveals the causally linked events that inter-
acted to produce a shift in the prevail-
ing institutional logic (Thornton, 2004).
Event sequencing is also shown to play
a role in institutional change in the account-
ing profession (Thornton, Jones, and
Kury, 2005). Hoffman and Ocasio (2001)
theorize what determines public attent-
ion to events that trigger institutional
change.
So what are the implications of individuals
and organizations in a sea of cultural fragmen-
tation and contradiction? It means that to
study cultural institutions researchers need a
theoretical framework that can accommodate
how individuals’ norms may deviate from
norms at higher levels of analysis, for example
at the level of individuals as distinct from cor-
porate management or professional associa-
tions (DiMaggio, 1997: 265). This multi-level
and multi-contextual requirement calls for a
theory that conceptualizes how to partition
‘units of cultural analysis’ and the relations
among them (Holm, 1995). We argue that the
inter-institutional system is well suited to this
task because each institutional order has dis-
tinct organizing principles, cultural symbols,
and logics of action that clarify how to define
units of cultural analysis. Culture is not just
amorphously out there in ‘thin air’ as per the
critique of culture as a world system, nor is
culture a monolithic and coherent influence on
actors that results from socialization (Parsons,
1951). Instead, conceptualizing society as an
inter-institutional system implies that the insti-
tutional orders have modularity and decom-
posable elements. The decomposable nature
of institutional logics allows for theorizing the
fragmented and contradicted nature of cultural
influences, revealing this not only at different
levels of analysis, for example individuals and
organizations, but also in specific contexts in
which individuals actively import and export
elements of institutional logics across institu-
tional orders (Thornton, 2004). Thus, the
decomposability of the elements of the inter-
institutional system makes it possible to
observe the influence of cultural institutions
from the standpoint of the vertical coherence
and fragmentation of different levels of
analysis, not only bottom up or top down
(Schneiberg and Clemens, 2006), but also
from the horizontal blending and segregating
of the elements of different orders of the
inter-institutional system. This, for example,
enables theorizing institutional change
processes such as bricolage, which is the
creation of new practices and institutions
from different elements of existing institutions
(Levi-Strauss, 1966). Thus, in returning to the
question of embedded agency, the institutional
entrepreneur does not disembed from the
social world to create change – structures and
actions are separable (Leca and Naccache,
2006), allowing institutional entrepreneurs to
hop and bridge from one social world to
another. Our review leads us to be encouraged
that literatures on organizations and culture
are converging, creating these fresh views on
the topic of agency.
Competing logics
A focus on competition between alternative
institutional logics has guided research on
institutional change. This diverse literature
encompasses a wide variety of mechanisms
to explain the effects of competing logics on
change, including environmental selection
pressures, political contestation, and social
movements. We emphasize that competing
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logics are not, by themselves, an explanation
for change in institutional logics but an
antecedent or a consequence. Moreover,
competing logics can facilitate resistance to
institutional change as in the case of the con-
test between the institutional logics of global
corporate and local professional banking
(Marquis and Lounsbury, 2007). The causal
mechanisms for institutional change reside
not in competition per se, but on a combina-
tion of the effects of market selection pres-
sures, power of institutional actors,
and changes in the relative prevalence of
societal-level institutional logics, which
unfortunately in many studies is typically
unspecified.
Much work has utilized both case and
quantitative studies of competing logics in
professional and occupational domains, for
example finance, health care, accounting,
and culinary. Comparing and contrasting
studies across professional and occupational
contexts reveals the vibrant ecology of
competing institutional logics of the inter-
institutional system.
Early research by Haveman and Rao
(1997) on mutual funds, described above,
adopted a selection meta-theory, positing
how environmental selection pressures
favored organizational forms more congruent
with their institutional environments.
Similarly, the Scott et al. (2000) historical
account of the Bay Area health care system is
exemplary in describing institutional change
from a setting once dominated by the institu-
tional logics of the medical professions to
one greatly influenced by the logics of the
state, the corporation, and the market. Their
study shows how the logics of the state in
terms of new regulatory systems disempow-
ered those of the professions, in particular
the more powerful and higher priced MDs,
creating an avenue for managers of corporate
logics in the form of managed care and new
organizational forms such as Health
Maintenance Organizations (HMOs), Point
of Provider Organizations (PPOs), and surgi-
centers to become commonplace in the
health care system.
Other studies on competing institutional
logics highlight power struggles among pro-
ponents of alternative logics. Reay and
Hinings’ (2005: 375) description of the
Alberta Canada case of health care services
bears similarities. Their lens focuses on a
recomposition of an organizational field in
which competing institutional logics of med-
ical professionalism versus business-like
health care is driving a radical change
process. They conceptualize the organiza-
tional field as a battlefield where power
struggles motivated by competing institu-
tional logics get played out. The structure of
the field and the dominant institutional logic
changed, but the previously dominant logic
of medical professionalism was only sub-
dued rather than eliminated. The power
ended up being distributed between the two
powerful actors – the physicians and the gov-
ernment – creating a countervailing or stabi-
lizing tension.
Meyer and Hammerschmid (2006: 1012)
analyze to what extent an old administrative
orientation is being replaced with a new
managerial logic in the Austrian public
sector. They trace institutional change by
observing how state bureaucrats make use of
social identities that are derived from com-
peting institutional logics. They have found
evidence of the formation of a new manage-
rial identity created by individuals who
mixed a new orientation with more orthodox
beliefs on public administration.
Research on competing logics has also
incorporated a social movement perspective.
For example, Rao, Monin, and Durand
(2003) show how social identity movements
underpin reinstitutionalization in the culinary
professions by contrasting the institutional
logics of the classic and nouvelle cuisine
movements. Change in logics and change in
the adherence to a logic take place through
four mechanisms, the sociopolitical legiti-
macy of food critics as activists, the theoriza-
tion of new roles, prior defections by peers
and gains to peers, and gains to defectors as
identity-discrepant cues. In essence, institu-
tional logics and professions undergo change
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when activists gain control of professional
societies, critique the traditional logic, and
proffer a solution hinging on a new institu-
tional logic. Note, the theory doesn’t fore-
shadow why critic activists chose to engage
in an institutional deconstruction project.
One can surmise the influence of other social
movements that are supported by other
domains in the professions and even other
institutional orders, for example the more
generic health movement.
Overall, the studies of competing institu-
tional logics focus either on strategies of
action at a lower level of analysis, for exam-
ple an organizational field, for example Reay
and Hinings (2005), or on how a higher-
level institutional logic at the societal-sector
level transforms strategies of action in a
lower-level domain, for example Haveman
and Rao (1997) and Meyer and
Hammerschmid (2006). This difference may
be partly reflected in the research design, for
example the qualitative study of a case versus
the quantitative analysis of a specific instan-
tiation of an institutional order. These differ-
ences may also be reflected in how the
camera lens is focused. That is, if you get
close to the action as qualitative researchers
are able to do, one is more likely to interpret
the action as a power struggle when indeed it
may also reflect the operation of higher-level
institutional forces.
MISCONCEPTIONS REGARDING
INSTITUTIONAL LOGICS
With respect to the institutional logics
approach there are several misconceptions in
our view that we feel compelled to comment
on. One is a continued juxtaposition between
institutional and market structures (e.g.,
Greenwood and Suddaby, 2006). While mar-
kets are economic structures – they are also
institutions. They function because of a set of
formal laws and normative expectations
about them and these normative expectations
have changed through time and space.
A market in one historical and cultural con-
text is not the same as a market in another
(Fligstein, 1996). Similarly non-market
institutions, such as professions, the family,
and religion are also economic structures and
are not independent from market forces
of demand and supply (Friedland and Alford,
1991).
Second, institutional logics do not emerge
from organizational fields – they are locally
instantiated and enacted in organizational
fields as in other places such as markets,
industries, and organizations. Institutional
logics stem from the institutional orders of
the inter-institutional system (Friedland and
Alford, 1991), not as commonly miscon-
strued from an organizational field (Scott,
2001: 139). Institutional logics through
various mechanisms may get reshaped and
customized in an organizational field.
However, an organizational field is a level of
analysis; it is a place where institutional
logics get played out, but not by itself a
theoretical mechanism. Friedland and Alford
(1991: 244) have commented around this
issue:
defining the boundaries of an organizational field,
within which there are strong pressures for
conformity, is difficult and potentially tautological.
The approach seems to assume that formal
attributes of organizational fields can be specified
independently of the institutional arena in which
they are located. But, we would argue, it is the
content of an institutional order that shapes the
mechanisms by which organizations are able to
conform or deviate from established patterns.
These institutional orders, and the specific relations
between them, delimit types of organizational
fields.
Third, ideal types are not a description of
what happens in an organizational field. Ideal
types are formal analytical models by which
to compare empirical observations across
institutions. Therefore, ideal types are best
developed at least in pairs, if not multiple
characterizations. Instead, often what are
often mischaracterized as ideal types are a
description of a particular case study rather
than a set of findings that can be refuted or
generalized and aggregated.
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Fourth, most studies of institutional logics
do not in some way tie their analyses back to
the institutional orders of the inter-
institutional system. This is partly due to
page limitation requirements of the journals
and a focus on other alternative units of
analysis. In other cases it appears due to the
authors who do not focus on causal relation-
ships both up and down stream. To simply
and briefly recognize these multi-level
relationships is important to further the
development of the institutional logics
approach as it systematically advances and
foreshadows questions for future study. For
example, why do culinary critics, the lynch
pin of the four mechanisms that begin the
shift in chef identities, decide to favor
nouvelle over classic cuisine? Are these
critics, for example, increasingly under
market pressures or have professional pres-
sures changed in some way?
SUGGESTIONS FOR FUTURE
RESEARCH
The main intellectual hurdle in institutional
analysis is in many respects the same as it is
for sociological theory more generally. We
need to better understand how macro-level
states at one point in time influence individ-
uals’ orientations to their actions, prefer-
ences, beliefs; how these orientations to
action influence how individuals act; and
how the actions of individuals constitute the
macro-level outcomes that we seek to
explain. Moreover, how does the stability of
institutional logics change systematically by
level of analysis – is it more stable or change-
able at the top or bottom, macro- or micro-
level of analysis? This is a big theoretical
question.
We need more work on the microfounda-
tions of institutional logics. Work on institu-
tional logics is inherently cross-level,
highlighting the interplay between individu-
als, organizations, and institutions. While the
embedded agency of actors is a key meta-
theoretical assumption, as discussed above, a
fully developed perspective on institutional
theory requires increased attention to its
microfoundations. DiMaggio’s (1997) paper
on culture and cognition is a start, providing
a link between the microfoundations of
cognitive processes and the cultural
structures inherent in institutional logics. But
cognitive theory is only part of the story. The
Carnegie School is another source and the
recent call for a neo-Carnegie perspective
may also yield answers (Gavetti, Levinthal,
and Ocasio, 2007). Given the rejection of
rational choice theory, how embedded inter-
ests, identity and commitments play a role is
an important topic for further theoretical
development and empirical research.
New methodologies that make use of
web-based experiments show promise in
research linking levels of analysis and also in
partitioning causes and effects by level of
analysis, helping to specify the underlying
theoretical mechanisms (Thornton, 2004).
For example, Salganik, Dodds, and Watts
(2006) show the micro-macro linkages in
how people select songs. This partitioning
also should address the meta-theoretical
assumption of incorporating both the
material and cultural. However, incorporating
both is not enough – what is needed is theory
and methods to partition these effects – that is
to understand the autonomy of culture from
economy (DiMaggio, 1994).
Future research needs to move beyond
implicit assumptions and to engage explicit
discussion of the underlying theoretical
mechanisms, that is the clear identification of
the ‘gears and ball bearings behind the statis-
tical models’ (Davis and Marquis, 2005).
Without formalization of the theory and
methods, studies of institutions cannot build
upon or invalidate one another and the social
science of institutions cannot grow systemat-
ically (Pfeffer, 1993). Instead, it will be
forgotten as it was in the past (Hughes, 1939;
Selznick, 1949, 1957).
Most research on institutional analysis has
revealed the effects of market rationalization
or state regulation; the latter is more about
resource dependence than institutional analy-
sis. In theory, other underlying patterns of
institutional change should exist. Given the
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interpenetration of institutions across levels
this raises the question of what implications
this has for the rise of market logics in soci-
etal sectors where you would not expect to
see markets operating, such as in the case of
families and the rising salience of religions in
a world system.
Institutional change occurring in the
global multi-national context provides fertile
ground for new research. Contrary to
Friedland and Alford's (1991) formulation,
the institutional logics perspective and in
particular the inter-institutional system is an
analytical tool not limited to expectations of
Western culture. It is also useful in analyses
of international contexts as evidenced by
recent applications examining the influence
of cross-national institutional logics on
employee training (Luo, 2007) and business
group restructuring in emerging economies
(Chung and Luo, forthcoming).
We think there is a healthy growth of
measurement strategies of institutional logics
on the horizon. Most quantitative research on
institutional logics has relied on indirect
measures of institutional logics, attempting
to bolster this approach by combining
research methodologies and triangulating
historical and interview methodologies with
quantitative methodologies. Content analytic
methodologies by Scott et al. have been
attempted, albeit these have not been
incorporated directly into the literature.
Research on vocabularies and cultural
structures provide opportunities in this area
and the use of techniques employed in mar-
keting such as focus groups and the field test-
ing of ideal types. More cross-over research
is needed between network and institutional
scholars as network methodologies offer a
well-established set of methods that can be
used for direct measurement of the meaning
of cultural categories (Breiger and
Mohr, 2004).
How institutional logics become institu-
tionalized and deinstitutionalized continues
to be a vibrant vein of work. Synthesis of the
state of what we know in this realm is
needed. While work on institutional change
has focused on the role of competing logics
in institutional change, we need work on
institutional logics, at various levels, organi-
zations, industries, fields, societies, and
world systems can themselves be institution-
alized and deinstitutionalized. In examining
this issue it is important to distinguish
between changes in logics and changes in
practices. What constitutes an institution
remains an unresolved conceptual issue
for the field. How and why actors manipulate
and switch institutional logics and in
particular cases in which manipulations and
switches are not supported by cultural
analogy are important empirical papers to
anticipate.
CONCLUSION
With the exception of DiMaggio and
Powell’s (1983) theory of isomorphism,
institutional theory has lacked coherence.
Subsequently, two papers have affected the
abandonment of isomorphism theory and the
cognitive meta-theory espoused by
DiMaggio and Powell (1991), namely that of
Kraatz and Zajac (1996) and Hirsch’s (1997)
(in our judgment inaccurate) critique of
Scott’s ([1995] 2001) emphasis on the cogni-
tive perspective. The impact of these papers
left institutional theory adrift with Scott’s
‘carriers’ perspective. As a result, much of
what is called institutional theory these days
is not very institutional at all. Instead it is
about resource dependencies, political strug-
gles, social movements, and other mecha-
nisms which, while important, are really
about non-institutional forces driving institu-
tional change. Within this political sociolog-
ical vein, culture is relegated to the narrower
topic of how groups and social movements
make use of rhetoric and framing to be
persuasive (Suddaby and Greenwood, 2005).
The institutional logics approach provides an
important remedy to this theoretical drift
away from institutional effects, by highlight-
ing how the cultural dimensions of institu-
tions both enable and constrain social action.
We review how the institutional logics
approach is a systematic way to theorize and
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measure the influence of institutions on indi-
vidual and organizational behavior. Without
positing isomorphism or organizational sta-
bility, the institutional logics approach offers
precision in understanding how individual
and organizational behavior is located in a
social context and the social mechanisms that
influence that behavior. By categorizing soci-
etal influences as an inter-institutional
system, previously tractable issues such as
embedded agency and institutional change
can be better addressed. Through the use of
increasingly sophisticated methods of inter-
pretive analysis, most notably the use of ideal
types and discourse analysis coupled with
quantitative modeling techniques, the institu-
tional logics approach is well positioned to
continue to address the questions of the cog-
nitive meaning of culture and institutions.
An important advantage of the institu-
tional logics approach as meta-theory is its
systematic means to associate various theo-
ries (explanations) of organization and action
in which institutions and their effects and
how actors constitute institutions can be
understood and measured objectively – they
can be heard, recorded, classified, and asso-
ciated with a set of actors and strategic
actions.
In this review we focused on an analysis of
the implicit and explicit social mechanisms
in a variety of studies, not on the description
or strength of their empirical findings. Our
approach was guided by believing that the
advancement of institutional analysis in the
social sciences requires an analytic, not a
descriptive approach, that ‘explains’
observed associations between individuals,
organizations, and societies.
NOTES
1 Publishers included among others, Len
Louchow, former CEO of Jossey-Bass, and John
Davis, former head of the Prentice-Hall College
Division. Louchow used the ideal types in teaching
the leadership course for the Stanford University
Publishers College.
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Table 3.1 Ideal types of institutional logics in public accounting
Characteristic Fiduciary logic Corporate logic
Economic system Personal capitalism Managerial capitalism
Sources of identity Accounting as a profession Accounting as an industry
Sources of legitimacy Reputation of CPAs Scale and scope of firm
Standardization & conservatism
Sources of authority Professional association Management committee
Government regulation Managing partners
Government regulation
Basis of mission Build legitimacy of public corporation Build seasonal stability of firm
Build prestige of partnership Build status position of firm through growth
Basis of attention Selling legitimacy Selling services
Generating profits
Basis of strategy Standardize and authenticate Growth through mergers and acquisitions
client financial statements Differentiate on client service
Logic of investment Build legitimacy of profession Build wealth & career of partners
Governance mechanism CPA partnership Private corporation
CPA ownership Majority CPA ownership
Institutional entrepreneurs British: Waterhouse, Big 8 accounting firms
Young,Niven
American: Haskels, Sells, Andersen
Event sequencing 1896–1921 State CPA World War II
legislation 1965–1975 Consolidation to Big 8
1933, 1934 Securities Acts Corporate merger wave
1938 SEC Accounting Series 1970s–1980s FTC ruling on open competition
Release no. 4 1980s–1990s Consolidation to Big 5
2001 Enron collapse
2001 Andersen bankruptcy
Structural overlap Intentional reduction of overlap CPA – Consulting
CPA – Lawyers in tax practice CPA – Lawyers in tax practice
Table 3.2 Ideal types of institutional logics in architecture
Characteristic Aesthetic logic Efficiency logic
Economic system Personal capitalism Managerial capitalism
Sources of identity Architect as artist–entrepreneur Architect as engineer–manager
Sources of legitimacy Reputation of architect Scale and scope of firm
Aesthetics of design Efficiency and economics of design
Sources of authority Design prowess Managing partner or supervisor
Basis of mission Build personal reputation Build multidisciplinary firm
Build prestige of firm Build market position of firm
Basis of attention Resolve design problems and Resolve technological and organizational
entrepreneurial challenges challenges
Basis of strategy Increase prestige of patron or Increase number of corporate clients
government sponsor Build recurring clientele
Win design competitions Increase markets for services
Logic of investment Build wealth and prestige of Build wealth of partners
entrepreneurs
Continued
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INSTITUTIONAL LOGICS 129
Table 3.2 Ideal types of institutional logics in architecture—cont’d
Characteristic Aesthetic logic Efficiency logic
Governance mechanism Entrepreneurial firm (atelier) Partnership ownership
Profession Private global multidisciplinary
corporation
Institutional entrepreneurs H. H. Richardson, R. M. Hunt, Louis Sullivan, Wm Le Baron Jenney,
R. R.Ware, Robert Venturi Walter Gropius, Mies Van der Rohe
Event sequencing 1857 Founding of Increased immigration and industrialization
Architecture profession 1871 Chicago Fire provides commercial
1893 Chicago Fair reinforces building opportunities
aesthetic of Beaux Art tradition World War I provides building
1967 Postmodernism treatise rejects opportunities and implementation of
aesthetic of minimalism new aesthetic which rejects history
World War II immigration of modernist
architects to U.S.
Structural overlap Professions – architects, Professions – architects, engineers, and
engineers, and contractors contractors
Clients – government and Clients – real estate speculators and
wealthy individuals as patrons corporations
Table 3.3 Ideal types of institutional logics in higher-education publishing
Characteristic Editorial logic Market logic
Economic system Personal capitalism Market capitalism
Sources of identity Publishing as a profession Publishing as a business
Sources of legitimacy Personal reputation Market position of firm
Education value Share value
Sources of authority Founder–editor CEO
Personal networks Corporate hierarchy
Private ownership Public ownership
Basis of mission Build prestige of house Build competitive position of
Increase sales corporation
Increase profits
Basis of attention Author–editor networks Resource competition
Basis of strategy Organic growth Acquisition growth
Build personal imprints Build market channels
Logic of investment Capital committed to firm Capital committed to market return
Governance mechanism Family ownership Market for corporate control
Trade association
Institutional entrepreneurs Prentice Hall Thomson
Richard Prentice Ettinger Michael Brown
Event sequencing Increased public funding to education Founding of boutique investment
Increased college enrollments bankers
Wall St. announces good investment Founding of publishing finance
newsletters
Structural overlap 1950–1960s Prentice Hall internal 1980s acquisitions wave
corporate ventures and spin-offs
1960s acquisitions wave
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