Microfoundations of Institutional Theory

Introduction

For almost two decades, scholars have stressed the need to make the microfoundations of institutional theory more explicit (DiMaggio and Powell, 1991; Zucker, 1991). Curiously, there has been limited progress in this effort, although Barley, Glynn, and Sahlin, in Chapters 8, 16 and 20 in this volume, also remedy this deficit. We think that much analytical purchase can be gained by developing a micro-level component of institutional analysis. Moreover, there are useful building blocks from ethnomethodology to Goffman on interaction rituals to Weick on sensemaking and social psychological research on legitimation that can be drawn upon to contribute to this effort.

We begin by making a case for the benefits of examining micro-processes. We then selectively review the terrain, cobbling together useful, albeit disparate, lines of research and theory. The thrust of this chapter is generative and by no means intended as a comprehensive survey. From these diverse sources, we contend, a viable micro-analysis of institutionalization can be developed. We apply our ideas to several contemporary issues, notably the rise of academic entrepre-neurship in universities in the U.S. and the trend toward increased efforts at earned income by nonprofit organizations. These applications illustrate the analytical utility of our approach. We conclude with a discussion of research tools generated by this line of theorizing that can be used to fashion compelling, multi-level explanations.

Why a Micro-Level Theory of Institutionalization?

The bulk of institutional research has focused on the sectoral, field, or global level. And properly so, as the transfer of ideas, practices, and organizational forms spans the boundaries of organizations, industries, and nations. A core insight of institutional theory is just how taken-for-granted formal organization and rationalization has become (Drori, Meyer, and Hwang, 2006). In our view these macro-lines of analysis could also profit from a micro-motor. Such a motor would involve theories that attend to enaction, interpretation, translation, and meaning. Institutions are sustained, altered, and extinguished as they are enacted by individuals in concrete social situations. We need a richer understanding of how individuals locate [Page 277]themselves in social relations and interpret their context. How do organizational participants maintain or transform the institutional forces that guide daily practice? From an institutional perspective, how are the passions and interests implicated in human behavior? In our view, the development of micro-level explanations will give more depth to accounts of macro-level events and relationships.

Institutional forces shape individual interests and desires, framing the possibilities for action and influencing whether behaviors result in persistence or change. Macroinstitutional effects, through processes of classification and categorization, create conventions that are the scripts for meaning making. This process is recursive and self-reinforcing. Institutional logics are instantiated in and carried by individuals through their actions, tools, and technologies. Some actions reinforce existing conventions, while others reframe or alter them. Ideas can be picked up in one setting and transposed to another, tools can be multi-purpose, and some settings are rife with multiple logics. Such situations afford considerable latitude for human agency and interpretation.

Nonetheless, the individuals that presently populate institutional analysis are portrayed as either ‘cultural dopes’ (Garfinkel, 1967: 68–75) or heroic ‘change agents’ (Strang and Sine, 2002: 503–507). The move to consider institutional entrepreneurs was motivated by a desire to replace the over-socialized individuals who seemed slavishly devoted to habit and fashion. But the celebration of entrepreneurs has perhaps gone too far, as not all change is led by entrepreneurs, and surely heroic actors and cultural dopes are a poor representation of the gamut of human behavior. Indeed, we recoil somewhat at the frequent use of ‘actors' in social science writings to characterize both individuals and organizations. As Meyer (Chapter 21 in this volume) notes, such language typically implies purposive, muscular, rather free actors, unembedded in their surrounding context. Institutional theory gains little by making unleashed actors the drivers of institutional change.

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