Toward a cross-level understanding of institutional change - A Microfoundational perspective
Due to the COVID-19 crisis the PhD defence of Koen Kuijpers will take place online (until further notice).
The PhD defence can be followed by a live stream.
Koen Kuijpers is a PhD student in the research group Entrepreneurship/Technology/Management (ETM). His supervisor is prof.dr. A.J. Groen from the Faculty of Behavioural, Management and Social Sciences.
Traditionally, institutional theory has portrayed institutions as having a deterministic influence on lower-level institutional actors, such as organizations. It is argued that organizations become relatively alike when they are faced with the same institutional demands—a process termed “isomorphism”. This traditional position has been subject to major criticism because it did not explain observed organizational agency. These critiques resulted in an “agentic turn” in institutional theory. Scholars did sterling work in bringing agency into institutional theory by introducing the perspectives of: “institutional work”, “institutional entrepreneurship”, “hybrids”, and “decoupling”. However, in turn, these studies received criticism for portraying organization as overly “heroic” and overlooking the structural embeddedness of organizations. Therefore, more recently, the microfoundational perspective has been introduced to institutional theory. The line of argument is that this perspective offers a more nuanced view of agency versus structural determinism in institutional theory. In short, the microfoundation perspective explores the mechanisms through which higher-level institutions affect lower-level institutional actors, such as organizations, and vice versa. Although the microfoundational perspective shows promise, research is still in its infancy and highly fragmented. We, therefore, sought to contribute by firmly embedding the microfoundational perspective into institutional theory and advancing a definitive explanation of institutional phenomena. Based on a review of the literature (presented in Chapter 1), we developed a number of research avenues that seemed promising in pursuing our objective. We followed these research directions in four studies presented in Chapters 2 to 5. Our overall research question driving this dissertation was: “How can the microfoundational perspective in institutional theory advance an explanation of institutional phenomena?”
Our first study explored how configurations of institutions explain organizations’ adoption of inclusive practices—practices that enable the inclusion of people with disabilities into the workforce. We found that institutions do not work in isolation. Rather, complex interactions among institutions seem to promote changes in organizations. In particular, we found that certain configurations of institutions (and their underlying attributes) form a beneficial climate for macro–micro transitions. We suggest that organizations seek validity cues from the environment to allow them to respond confidently to macro-level demands. Particular configurations are then likely to signal mutual validity of an institutional demand and could, in turn, facilitate top-down transition. This study suggest that a microfoundational perspective on institutional theory advances understanding of macro-level institutional phenomena. In particular, explaining and interpreting these phenomena with reference to lower-level mechanisms seem highly valuable. This study does not treat institutions as structurally deterministic; rather, its theoretical stance is that organizations scan the environment for cues to guide their response to demands.
The second study investigates how and under which political conditions interactions between activists and the tobacco industry trickle up and impact regulative institutions— namely, the content of tobacco legislation. We found that the bottom-up effect of activists on legislation depends on the opportunities for political involvement provided by the state. However, for the tobacco industry, this is not the case. We suggest that the tobacco industry is likely to be blocked from participation in the political process because the tobacco dispute is highly contested, and political actors do not want to get their hands dirty. This study’s findings offer important contributions that promote the integration of the microfoundational perspective into institutional theory. In particular, our study contributes to an understanding of the transformational mechanism—the process through which lower-level actions coalesce and change institutions. The study shows that contention among lower-level institutional actors, under certain political conditions, initiates macro-level institutional changes. Implicitly, our findings suggest that organizations’ agency may well be weaker when organizations are faced with contestation.
Our third study investigates the process of how institutional pressures trickle down and impact organizations. Specifically, we studied organizations’ adoption of the inclusive practices of institutions. We introduced the institutional logic perspective. Simply stated, institutional logics can be understood as shared normative expectations, values, and beliefs among actors that guide organizational responses to institutions. Institutional logics operate on multiple levels, such as the societal and regional levels. Therefore, organizations face constellations of logics that can be in conflict, creating a situation of institutional complexity. We found that institutional logics “filter” institutional demands when they flow down to organizations. In this process, logics operating on the societal level seem to be more influential than logics operating on the regional level. We suggest that this could be explained by a situational prioritization of institutional logics. The findings of this study add to our understanding of the situational-formation mechanism—the process through which macro-level institutions instigate organizational behavior. Specifically, we show that institutional demands cross several levels before entering organizations and, as part of this process, are filtered by institutional logics. Based on these findings, we suggest that conflicting institutional logics provide organizations with greater agency.
In our final study, we concentrated on the direct effect of logics at the community level on organizational behavior—specifically, the adoption of inclusive practices. Furthermore, we assessed whether community logics impact the transformation of central government regulations into local regulations. Finally, we studied whether there was an interactive effect of logics and local regulations on organizations. We found that community logics have a direct impact on organizational behavior but not on local regulations. Interestingly, we found an interactive effect of community logics and local regulations on organizational behavior. In particular, we found that strong community logics can substitute for weak local regulations and vice versa. The findings of this study contribute to our understanding of the situational-formation mechanism. That is to say, we found that the effects of (local) institutional pressures need to be considered in the light of prevailing logics in order to understand organizational behavior. In other words, the effects of local institutions should be placed within a wider sphere of normative frames. Furthermore, we add to the understanding of the transformational mechanism by showing that normative expectations, values, and beliefs tend not to trickle up and affect local institutions. Leaving aside bottom-up effects, the diffusion of regulations seem to explain heterogeneity among local regulative institutions.
Taken together, the studies’ findings show the value of integrating the microfoundational perspective into institutional theory. The microfoundational perspective enables a richer theorization of macro-level phenomena by incorporating lower-level antecedents and facilitators that instigate macro-level institutional change. We show that institutional phenomena can be deconstructed into underlying constituents and that institutional processes inherently cross analytical levels. The institutional logic perspective is proven to be powerful in studying the mechanisms through which institutions impact organizations and vice versa. Finally, we advance the agency versus structural determinism debate in institutional theory by exposing the cross-level conditions that constrain or enable organizational agency.