Why Don't They Do What We Want? An Exploration of Organizational Responses to Institutional Pressures in Community Health Centers

Abstract

Throughout the last two decades, the nonprofit sector has emerged as a major provider of basic health and human services and as a prime implementor of certain public policies (Kramer, 1981; Saidel, 1991; Salamon, 1987; Smith and Lipsky, 1993). At the same time, resource suppliers to nonprofit organizations, such as government agencies at local, state, and federal level, have been under pressure to demand that non-profits reduce costs and increase efficiency and productivity. However, nonprofit response to such demands is not well understood despite the fact that public administrators, policy makers, and foundation managers, among others, find that implementing their goals is increasingly intertwined with the work of nonprofit organizations (Saidel, 1991). Our purpose in this article is to examine what specific organizational and environmental characteristics shape nonprofit responses to these downsizing demands. Through a study of budget cuts in four community health centers, this research demonstrates that conformity through compliance - a response often anticipated by funding sources - is only one among four responses made in the face of pressures for improved efficiency and productivity that accompanied the cuts. Nonprofit organizations operate in environments characterized by uncertain relationships between means and ends. In such institutional environments, legitimacy, not efficiency, is critical to an organization's ability to secure vital resources (Meyer and Rowan, 1977). Organizations gain legitimacy through conformity with prevailing norms, practices, and beliefs of multiple constituencies (Meyer and Rowan, 1977; Zucker, 1983), and through organizational responses to institutional pressures. The nature of these pressures has been well defined (see, for example, DiMaggio and Powell, 1983) and their effect on the diffusion of different organizational structures and processes is well documented (Burns and Wholey, 1993; Fligstein, 1979; Tolbert and Zucker, 1983). However, implicit in much of this work is an assumption of organizational passivity and conformity in the face of institutional pressures (Covaleski and Dirsmith, 1988a). Oliver (1991) developed a conceptual framework of organizational response to institutional pressures that directly challenges this assumption of passivity. First, organizations may conform or acquiesce. Second, they may compromise, particularly in the face of conflicting demands. This response includes the partial conformity described by Scott (1983) in which health care organizations meet at least minimum standards set by federal agencies. Third, organizations may attempt to avoid institutional pressures through, for example, symbolic compliance (Meyer and Rowan, 1983) where organizations conceal nonconformity or minimize external evaluation. Fourth, organizations may actively resist pressures or, fifth, attempt to manipulate or change them. The analysis in this article builds directly on Oliver's (1991) framework. Both Covaleski and Dirsmith (1988a; 1988b) and Oliver (1991) suggest that internal characteristics and interorganizational relationships combine in unique ways to produce this variety of responses. In this article, we investigate organizational responses to one form of institutional pressure - the expectations accompanying budget cuts demanded of community health centers. Although funders do not dictate what cuts should be made, they use coercive pressures in the form of productivity standards or staffing levels to encourage certain ends. However, community health centers are not dependent solely on funders for legitimacy and resources. As a consequence, the conformity desired by funders may be problematic as centers respond not only to pressures emanating from them but from other critical constituencies such as communities, clients, and others. In the next section, three characteristics of community health centers likely to affect organizational response are described: intraorganizational conflict, organizational coalitions, and interorganizational conflict. …