Traditions as Institutionalized Practice: Implications for Deinstitutionalization

Traditions as Institutionalized Practice: Implications for Deinstitutionalization

Institutional theory provides a powerful lens for explaining individual and collective action. Recently, increased efforts towards understanding how institutions are created have led to a systematic development of ideas on institutional entrepreneurship and attention to processes and mechanisms of institutional construction. Despite this growing rise of interest in how institutions are created, we still know relatively little about the process of deinstitutionalization. Many questions remain concerning how institutions wax and wane or diminish in potency over time and the processes that shape the erosion and extinction of institutionalized practices.

While a few studies examine institutional decline within the framework or boundaries of studying institutional change (Dacin, Goodstein, & Scott, 2002), efforts to unpack the strategies and dynamics associated with extinction are lacking. Scott defines deinstitutionalization as the ‘process by which institutions weaken and disappear’ (2001: 182). Important theorizing on deinstitutionalization was put forth by Oliver (1992). Oliver's framework was the first to pay explicit attention to the erosion and extinction of institutionalized practices.

The framework proposed that the dissipation or rejection of an institutionalized practice was a result of a set of political, functional, and social pressures. The dissipation or rejection then leads to deinstitutionalization, which, in turn, leads to erosion and/or extinction. For Oliver, deinstitutionalization is ‘the process by which the legitimacy of an established or institutionalized organizational practice erodes or discontinues’ (1992: 564).

A number of studies examine processes of decline and erosion, including erosion via replacement as in the case of classic French cuisine (Rao, Monin, & Durand, 2003); strategy abandonment in radio formats (Greve, 1995), ideological and political obsolescence of CEOs with finance backgrounds (Ocasio & Kim, 1999), impact of downsizing in deinstitutionalizing permanent employment practices in Japan (Ahmadjian & Robinson, 2001), and the shedding and shunning of the conglomerate form (Davis, Diekmann, & Tinsley, 1994). An interesting observation from these studies, however, is that institutionalized practices are rarely ever completely extinguished. The practice continues albeit weaker in scope (extent of diffusion) or potency. These studies also suggest that various features or elements of institutionalized [Page 328]behaviors continue and serve as either a reminder of prior strategies and/or as raw material for the construction of new ones. We take these findings as a starting point for our chapter to understand the nature of traditions and how traditions erode and become extinguished. As we discuss below, we focus on traditions because, while they share commonalities with institutionalized practice, they also have some unique qualities that make them relevant for understanding deinstitutionalization.

In order to understand the process by which traditions erode, we summarize a recent illustration of a single tradition in an organizational setting and its evolution over time. We consider traditions to be institutionalized practices or collections of such practices and subsequently focus on developing implications for understanding the process of deinstitutionalization. We do this through an application and extension of Oliver's framework of deinstitutionalization in the context of examining the life history of a single tradition over time. Before presenting our case study, we want to clarify what we mean by traditions and how they erode. Towards the end of our chapter, we demonstrate how our story reveals important insights for understanding the erosion and extinction of institutionalized practices.

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