Institutional Theory Research Research Articles

Making Sense of Hybrid Practices: The role of individual adherence to institutional logics in impact investing

Hybrid practices combine core elements of different institutional logics. As such, they elicit contrasting responses from individuals, including ignoring, rejecting and adopting them. Yet, extant research in institutional theory does not explain how individuals come to form these responses. To address this gap, we adopt a sensemaking perspective and conduct an inductive, comparative case study of 14 wealthy individuals based on life story interviews, examining their responses to impact investing, an emergent hybrid practice combining elements of the philanthropy and finance logics. Our study uncovers key contextual mechanisms by which institutions influence how individuals respond to hybrid practices, a neglected dimension in sensemaking studies. In particular, we show how individuals’ degree of adherence to the logics involved shapes how they notice, interpret and finally respond to impact investing. Contrary to what previous research suggests, our study shows that individuals who are merely familiar with the logics at play are better positioned than both novices and individuals who identify with the logics to evaluate hybrid practices positively and adopt them.

Making Sense of Hybrid Practices: The Role of Individual Adherence to Institutional Logics

Hybrid practices recombine core elements of different institutional logics in novel ways. They proliferate in our complex and uncertain world. As such, they elicit contrasting responses from people who encounter them, from strong rejection to enthusiastic adoption. However, extant research in institutional theory does not capture the process through which individuals come to form these responses. To address this gap, we conducted a comparative, longitudinal multiple case study of 14 high-net-worth individuals, examining their response to impact investing, an emergent hybrid practice that combines elements of the philanthropy and finance logics. Our study shows how individuals frame the hybrid practice as an alternative to one of the pure practices being combined (e.g., giving or investing), and how their degree of adherence to the logics at play (novice, familiar, identified) orient the sensemaking process. In particular, mere familiarity with the logics at play seems to foster individuals’ adoption of hybrid practices.

Microlevel Analysis of Institutional Intermediation in a Rudimentary Market-Based Economy: Entrepreneurship in Kathmandu’s Indrachok Market

Institutional theory research on institutional intermediation typically focuses on how institutional intermediaries address voids in market-based institutions that inhibit entrepreneurship. In doing so, the research rarely studies what types of institutional intermediaries entrepreneurs prefer to use. We address this gap with a microinstitutional inquiry of how entrepreneurs in a rudimentary market-based economy differ in the relevance they place on different types of institutional intermediaries. Using a sample from the Indrachok market in Kathmandu, Nepal, and using a three-stage qualitative and quantitative abductive investigation of a cascading set of increasingly refined research questions, we identify two key preferences for institutional intermediaries. First, we find a key institutional intermediation tripod consisting of three locally focused institutional intermediaries: family, suppliers, and peer entrepreneurs. The tripod is supplemented by institutional intermediaries with more moderate preference in this context: four other locally focused institutional intermediaries (local politicians, police, religious figures, and political gangs) and three broad-based institutional intermediaries (government, microlenders, and nongovernmental organizations). Second, the importance of suppliers and peers as institutional intermediaries reflects entrepreneurs’ registration status (registered versus unregistered) and microgeographic location (dispersed versus clustered businesses). The research reconceptualizes institutional intermediation in rudimentary market-based economies from the entrepreneurs’ perspective, identifying mechanisms that shape entrepreneurs’ preferences and providing proposition for future testing. Funding: This research was partially supported by the National Natural Science Foundation of China [Grant 71620107001]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2021.1531 .

From isomorphism to institutional work: advancing institutional theory in sport management research

ABSTRACT This paper offers a review of institutional work and its utilization in sport management. We detailed how institutional work offers a modern paradigm of institutional theory that addresses calls for examining how institutions are created, maintained, and disrupted in sport. Upon review of the institutional work research in sport management, we argue for more studies of embedded agency and provide insights into how scholars may effectively implement institutional work within studies of sport phenomena. We advocate for the expansion of methods and analyses to provide empirical relationships between embedded agency and institutional outcomes. Further, we concluded that there is a need for more research with institutional work and other core institutional elements. Thus, we offer important insights into the progression of institutional theory research in sport management.

Cross‐national differences in stakeholder management: Applying institutional theory and comparative capitalism framework

AbstractDrawing upon the research in institutional theory and comparative capitalism, the present study investigates how cross‐national differences in the political, business, and economic institutional contexts of the United States, Italy, and Japan are associated with the ways in which companies in each of these countries prioritize and engage in their stakeholder engagement activities (SEAs). Using Porter and Kramer's framework, which classifies corporate social responsibility (CSR) activities as falling into four categories (good citizenship, mitigating harm from value chain, transforming value chain activities, and strategic philanthropy), we investigate how companies in the United States, Japan, and Italy prioritize and engage in these four SEAs. An analysis of data collected from 340 companies across these countries reveals that while companies in each of these three countries undertake the four types of SEAs, the prioritization and prevalence of the four types of SEAs vary from one country to the other, in ways that align with the prevailing institutional contexts of each country. The results contribute to a more nuanced understanding of why and how companies' approaches to CSR differ across countries. From a practitioner's perspective, the findings highlight the cultural specificity of CSR, implying that despite the global nature of CSR, the implementation of CSR needs to be tailored to a country's context.

Legitimacy, Government Regulations and the Emergence of the Market for Cryptocurrencies

Building on legitimacy in institutional theory research, we theorize how the perception of regulative legitimacy based on strong versus weak government regulations varies in conjunction with instit...

Where Are You From? Perceived Country Homophily and Its Effect on the Implementation of Corporate Political Strategy

Although research has examined when firms will engage in strategies to appease the demands of important stakeholders, stakeholder theories have not thoroughly explained how firms go about executing these strategies. We address this issue by linking institutional theory with the theory of the firm to explore the organizational boundary decision of a foreign firm’s corporate political activities. Our theoretical framework proposes that the degree to which a firm’s host-country stakeholders perceive a firm to be legitimate will influence its choice to internalize or outsource its lobbying functions. We also explore how this cognitive legitimacy effect is moderated by pragmatic legitimacy factors between home and host countries. Empirically, the study examines the political strategy implementation of 2,219 U.S. subsidiaries of foreign firms from 101 countries lobbying in the United States from 1998 to 2012. The findings of this paper advance research in institutional theory, stakeholder management, nonmarket strategy, and transaction cost economics.

Power and Reflexivity in Boundary Work: Addressing Inequality through Distributed Social Ownership

We extend research in institutional theory that has highlighted the importance of boundaries and boundary work to create institutional impact, but has not foregrounded the power aspects inherent in...

Logic Multiplicity and Conflict: The Effect Of Competing Logics on Board Turnover

While institutional theory research has shown that multiple institutional logics can exist in the same organization, researchers have just begun to theorize when multiple logics will instantiate in...

Institutions Under a Microscope: Experimental Methods in Institutional Theory

Recent literature on institutional theory is replete with calls for greater use of experimental designs to explore the micro-foundations of institutions (Bitektine, 2011; Green, 2004; Kennedy and Fiss, 2009). Well-conceived and -developed experiments can enable institutional theory scholars not only to scrutinize difficult-to-isolate relationships (David and Bitektine, 2009), but also to explore institutions as multilevel processes that form the foundation of organizational life (Thornton et al., 2012). Nevertheless, experimental methods have yet to occupy their due place in the toolkit of institutional researchers. The purpose of this chapter is to draw researchers’ attention to the potential of experiments to generate interesting and relevant insights for understanding institutions in organizational contexts, as well as to provide some guidance for scholars interested in using experimental studies in institutional theory research. In the following sections, we briefly elaborate the importance of micro-level processes in institutional theory, discuss the advantages and challenges of experimental studies of institutional practices, and review examples of extant experimental research in institutional theory, with an emphasis on their methodological distinctions and the theoretical questions that they address. We close with practical recommendations for the design and implementation of experimental studies exploring micro-foundations of institutions, and a discussion of promising future directions for experimental research in institutional theory.

So You Want to be a Fighter? Institutional Work and Sport Development Processes at an Elite Mixed Martial Arts Gym

Mixed martial arts (MMA) is a rapidly growing combat sport with unique development procedures unlike most traditional sports. In this study the development processes at an exemplar MMA gym were examined. Institutional work theory was used to understand how and why the sport is being developed in this setting. The results provide a microlevel account of the processes and operation of the sport as it develops, and indicate that traditional sport development models may not adequately represent all sports. Subcultural values reflecting what it takes to be a fighter along with a fighter’s duty to the gym influence recruitment, retention, and transition strategies of athletes. Two forms of institutional work, refinement and barrier work, were identified as simultaneously aiding and hindering the development of the sport. Along with furthering institutional theory research, this study contributes to the discourse on alternative ways of sport development for MMA and emergent sports.

Beneficiary contact and innovation: The relation between contact with patients and medical innovation under different institutional logics

The recent policy agenda to enhance translational research in biomedicine emphasizes the need to promote interactions among all the actors involved in the medical innovation process. While patients are generally acknowledged to be a critical source to facilitate medical innovation, there is little empirical evidence on the relation between direct contact with patients and medical innovation. Drawing on organizational psychology and institutional theory research, we propose that contact with beneficiaries is likely to enhance scientists’ propensity to engage in innovation activities, and that the intensity of this relation is contingent on the institutional setting in which actors are embedded. Our study is based on a large-scale survey of biomedical scientists in Spain. Our findings show an inverted U-shaped relationship between contact with patients and participation in medical innovation. We also observe that the effect of contact with patients varies depending on the institutional logic in which scientists are embedded: our results show that the positive relation between contact with patients and innovation is particularly pronounced for scientists who are embedded in a science logic compared to a care logic.

Understanding Resource-Deprived Actors’ Interaction with Conflicting Institutional Demands

Recent research in institutional theory has given prominence to actors' agency in strategically responding to institutional pressures, and shaping institutions themselves. Nevertheless, very little attention has been paid to how resource-deprived actors cope with institutional demands. In this study, we make a major contribution to advancing theory on strategic responses to institutional pressures among resource deprived actors through a detailed analysis of the mechanisms that small developing world suppliers employ to manage the often conflicting institutional demands they face regarding labour practices. Through this analysis, we establish a typology of perception, of and response to, institutional pressures that reflects the unique circumstances of resource deprived actors, and theorize a number of proposals regarding the circumstances in which these mechanisms are deployed. In so doing, we contribute significantly to institutional theory, and also to empirical understanding of supplier behavior in developing countries.

How do institutional norms and trust influence knowledge sharing? An institutional theory

We employed institutional theory to evaluate knowledge sharing by people, proposing that institutional norms enhance knowledge sharing. We assumed a micro-institutional approach with a simultaneous examination of the mediating role of trust on knowledge sharing. We employed structural equation modeling to analyze surveys from 340 employes, discovering that institutional norms are positively related to knowledge sharing. Trust serves as the dominant mediator in the relationship between institutional norms and knowledge sharing. Our purpose in applying isomorphic processes to knowledge sharing was to provide an additional layer of understanding for the growing body of research in institutional theory, bridging micro and macro theories with suggestions for future research.

The impact of media on the legitimacy of new market categories: The case of broadband internet

Building on research in institutional theory and market categories, we argue that media coverage, through the effects of cognitive and sociopolitical legitimacy, influence the creation of new market categories. Using data on the broadband access industry, we develop and test a media coverage model of market category entries, demonstrating the legitimacy effects of media-based information exchange on the emergence of new market categories. We include two post hoc analyses on mediation effects to test the relationship between population density and media coverage. These results indicate a possible mediation relationship, which we discuss in the implications of our study.

Asymmetrical Institutional Conflict and Discourse-based Institutional Entrepreneurship

This study explores the manner in which young, innovative firms resolve institutional conflict to establish legitimacy after entering new markets. Prior research has highlighted the use of isomorphism, decoupling, and deinstitutionalization as mechanisms for establishing legitimacy. However, these approaches may not be practical for young firms with few resources. We build on prior research in institutional theory to explain how differences in legitimacy judgment processes create asymmetrical institutional conflicts that do not require costly campaigns to rectify. Instead, young firms may use discourse management to resolve the conflict and achieve growth in new markets.

The social constitution of regulation: The endogenization of insider trading laws

Accounting research, whether founded in an economics or sociological paradigm, has generally treated regulation as an exogenous part of the environment that shapes the behavior of those who operate within it. Recently, joining those who have advanced the regulator capture hypothesis, the exogenous presumption of the regulatory framework has been challenged by institutional theorists within the sociology literature, and it has been reasoned that those regulated seek to influence the regulations applied to them to gain advantage. In effect, the actions of those regulated “endogenize” the regulations that gird them. Employing this emerging strand of institutional theory research, we probe efforts to “endogenize” the Securities and Exchange Commission’s (SEC) regulation of insider trading. More specifically, applying both latent and manifest content analyses, we examine archival material relating to the development of insider trading regulations, focusing in particular on the social negotiation of the SEC’s Rule 10b5-1, which prohibits company officers from trading in their company’s stock while in “knowing possession” of material, non-public information. Our results suggest that those regulated by 10b5-1 effectively influenced this regulation (viz., by way of successfully advocating for an affirmative defense provided for so-called “planned trades”). Our analysis suggests that endogenization is an on-going, recursive process marked by moves and counter-moves among contending factions. Implications are explored.

Corporate Responsibility as Myth and Ceremony: Bad, But Not for Good

Organizations adopt corporate responsibility (CR) policies often ceremonially, meaning that policy adoption is not substantive and lacks alignment with actual practice. Prior research in institutional theory has largely assumed as static view of adoption and suggests that a situation of opacity (i.e. the difficulty or impossibility of evaluation) stabilizes ceremonial adoption and thus impedes substantive adoption. This paper offers a dynamic view of adoption sequences and re-examines the role of opacity in promoting substantive adoption among multiple organizations within a given field or industry. Using a three-state Markov chain model, we specify the boundary conditions under which initial opacity paired with a change towards transparency (i.e. the relative ease or possibility of evaluation) maximizes the overall number of substantive adoptions. Our findings suggest that the institutionalization of CR-related policies can be advanced by leaving organizations significant leeway and autonomy in their adoption decision. In turn, institutionalization may be hampered by initial requests for transparency and organizational accountability. We discuss implications for (1) efforts to institutionalize CR as a global governance mechanism and (2) the institutional theory concepts of decoupling and (re-)coupling.

Using an informing strategy to manage moral legitimacy in healthcare organisations

Healthcare organisations operating within highly institutionalised environments are exposed to very intense isomorphic pressures. These institutional pressures help determine organisational success and survival through the recognition and distribution of legitimacy, which is generally gained through conformity. Moral legitimacy, defined as the ethical judgments made about an organisation’s activities, is of particular importance in the healthcare field. Following previous literature that argues that compliance may be an explicit strategic response to institutional processes, this paper develops and discusses a new related strategy for managing organisational moral legitimacy; it is labelled informing. Informing is used to signal allegiance to the institution and enhance organisational moral legitimacy. Building on institutional theory research, we develop key propositional statements regarding the informing strategy and its relationship to moral legitimacy, which is inherently important to all types of healthcare organisations and warrants further study. The informing strategy is then exemplified through several specific tactics that differ in their influence on the moral legitimacy along with other types of organisational legitimacy, although we demonstrate that its main utility lies in its ability to impact moral legitimacy.

Hong Kong Movers and Stayers: Narratives of Family Migration (review)

Reviewed by: Hong Kong Movers and Stayers: Narratives of Family Migration Shanti Fernando Janet W. Salaff, Siu-Iun Wong, and Arent Greve. Hong Kong Movers and Stayers: Narratives of Family Migration. Urbana-Chicago: University of Illinois Press, 2010. 259 pp. Notes. References. Index. $30.00 sc. Hong Kong Movers and Stayers: Narratives of Family Migration is an interesting and important addition to the University of Illinois Press series Studies of World Migrations. This book looks at the emigration from Hong Kong in the wake of the retrocession of Hong Kong to China in 1997. This is done at both a macro and micro level by using careful survey and interview data and seeking to complicate simple or universalizing theories surrounding migration patterns by grounding their research in institutional theory, transnationalism theory, and sociological analysis of in-depth narratives. The authors began this research in 1991 in order to capture the emigration patterns of Hong Kong residents during the period from 1984 to the return of Hong Kong to China in 1997. They surveyed 1,552 residents and found that 12% of them had plans to emigrate, so it was not quite the mass exodus that might have been expected. Nine of these potential emigrants were then selected for in-depth interviewing, and the stories of their hopes, challenges and fears are presented in this volume. The book is divided into three parts which represent different experiences based largely on the class of immigrants, and it also identifies three levels of social institution, which are “large-scale regulatory institutions, intermediate-level social relations, and more personal cognitive-cultural frames” (217), that provide the framework for their analysis. The book’s divisions, based on social class, are the Cosmopolitans, the Rooted, and the Working Class, each of which relates the story of three families from those categories. Each class, however, has its own sets of challenges and the common core value of family unity and the goal of creating the best conditions for the thriving of that family and its networks. The institutions that they describe include Hong Kong political and social institutions and the family—the Chinese family in particular—as an institution with varying “family scripts” that “shape their migration trajectories” and how they adjust and react in unique ways. The strong family ties play a part in the majority of the migrant narratives. Migration stories are not simple point A to point B stories, and this is captured in rich detail in the book. The three “Cosmopolitan” families, with their skills, education, and global connections, still had settlement issues, some of which were resolved and one of which resulted in reverse immigration. The three “Rooted” families demonstrated not just what immigrants gain through their emigration, but what they leave behind, and that adaptation to changes in one’s home country might be easier than adapting to a new country. Brian Wan, supposedly “rooted,” also has a story that shows the “different [End Page 291] migration experiences and expectations of women and men and of various generations” (135). He wanted to join his family in Canada, but his wife, Wai-Yin, did not want to emigrate, and his family, which had emigrated to Canada, disappointed him by changing their family emigration plan and denying him support. The three “Working Class” family stories emphasize that economic instability makes family and local support networks difficult to leave, along with the slim possibility of meeting the skills requirements of immigration programs such as those in Canada. It also challenges assertions that transcultural identities are now the norm (Castles and Miller, 1993Castles and Miller, 1998) by showing the enduring nature of national cultural identities and loyalties. The psychological factors of family decision-making are important ones and the book does well to emphasize this, as much of migration research relies on one-dimensional or unsophisticated views of immigrant motivation. The purpose of Hong Kong Movers and Stayers appears to be to provide an alternative to universal theories of push and pull factors such as Peter Li (2003) has presented. It pushes us to look at patterns of migration in more flexible and nuanced ways. It emphasizes that it is not a single decision of...