The Role of Regret in Institutional Persistence and Change

Abstract

This paper theorizes the impact of regret in institutional persistence and change. We articulate a framework modelling how decision-maker regret influences how organizations respond to institutional pressures. The extent to which individuals anticipate regret or deal with previous regrettable experiences leads to the choice of either isomorphic (i.e. more conformist) or non-isomorphic (i.e. less conformist) institutional outcomes. Identifying differences in this response connects regret to institutional arrangements, bringing the individual back to the institution. Doing so, the paper addresses the acknowledged lack of specific attention to micro-level meaning systems in institutional theory, and tangentially deals with the silence in regret research on broader institutional consequences. We conclude by discussing how regret demonstrates an alternative explanation of how divergent organizational responses can occur in similar institutional contexts.