Presented by Di Wu

Institutional Entrepreneurship

Cynthia Hardy and Steve Maguire

The SAGE handbook of organizational institutionalism Chapter 7

Introduction of authors Cynthia Hardy

Professor of Management (Organization Studies) Organization discourse theory Power and politics in organizations Identity Inter-organizational collaboration Strategic change Organizational theory

Steve Maguire Associate Professor of Strategy and Organization in the

Desautels Faculty of Management at McGill University Markets and Globalization Strategies for Sustainable Development Managing Organizational Politics

Definition of Institutional Entrepreneurship

“activities of actors who have an interest in particular institutional arrangement and who leverage resources to create new institutions or to transform existing ones”. (Maguire, Hardy &Lawrence, 2004:657)

“new institutions arise when organized actors with sufficient resources (institutional entrepreneurs) see in them an opportunity to realize interests that they value highly”. (DiMaggio, 1998:14)

Different Perspectives Individual institutional entrepreneurs

play highly influential, if not determining, roles in episodes of creating and transforming institutional arrangements.

VS Collective, incremental and multi-level

elements of institutional entrepreneurship is a process.

Interesting questions for recent institutional theorists How actors are able to envision and champion

new practices if they are embedded in an institutional field and subject to its regulative, normative, and cognitive pressures? Deeply embedded, advantaged, resource-rich

central players. How institutional entrepreneurs get other

embedded field members to take up and institutionalize new practice? Those less embedded in and less privileged are

more likely to welcome new ideas.

Introduction of this chapter Review the emerging and rapidly growing

body of organizational research on institutional entrepreneurship. Which types of actor take on the role of

institutional entrepreneur? The field condition that help to initiate

institutional entrepreneurship. The role of interpretive struggles. Intervention strategies. Provide some insights.

Institutional entrepreneurs Who?

Individuals; Organizations, especially in the professions; Networks; Associations; and Social movements.

Two approaches to understand Who -1

One approach focuses explicitly on the properties – special characteristics, qualities and abilities Take a reflective position towards

institutional practices and can envision alternative modes of getting things done (Beckert,1999:786)

Critical realism emphasizes “autonomous reflexive” An actor who reflected in relative isolation from

the concerns of others, as a result of which he was more likely to experience conflict with the structures that surrounded him and, there fore, to seek opportunities for change.

Two approaches to understand Who -2

The Other approach focuses in subject positions or social positions from which actors can take action.

(Maguire et al., 2001; Battilana, 2006; Bourdieu, 1990) Actors do not have power; instead, they occupy subject

positions that allow them to exercise power in and on a particular filed. Legitimated identities; legitimacy with respect; powerful;

Empirical studies have found that institutional change can be initiated by powerful actors located in dominant positions in mature fields.

Central actors may have access to alternative practices in other fields through a variety of mechanisms.

Institutional change can also be initiated by less dominant, peripheral actors.

Initiating field conditions Certain stimuli – uncertainty, problems,

tensions and contradictions in a field – can establish favourable initiating conditions for institutional entrepreneurship by motivating and furnishing ideas for change;

Fields in particular states, especially emerging ones and those in crisis, are also more likely to present opportunities for institutional entrepreneurship.

Interpretive struggles Actors are not simply carriers of institutional

meanings; rather, they are viewed as active interpreters of practices whose meaning is, as a result, negotiated in ongoing, complex process

“individual” interpretations can be seen as part of institutional agency

The process of discursive struggle through which institutional entrepreneurship succeeds or fails.

View meanings as a collective achievement and emphasizes the complex and contradictory process in which it is negotiated and stabilized

Intervention strategies How do institutional entrepreneurs succeed in

these activities to change institutional fields? Identifying and explicating the strategic

interventions made by institutional entrepreneurs to bring about change. Strategies and activities in which institutional

entrepreneurs engage (e.g., Lawrence, 1999) Skills and abilities required to carry out these

activities (e.g., Fligstein, 1997; Perkmann & Spicer, 2007) Three broad themes: resources, rationales,

and relations

Resources DiMaggio highlighted the necessity of

“sufficient resources” to create or change institutions (DiMaggio, 1988:14)

Wide range of resources The use of finance, knowledge, position; (Beckert,

1999) political, financial, and organizational resources;

(Greenwood & Suddaby, 2006) material resources; (Lawrence & Suddaby, 2006) cultural resources; (Creed, Scully & Austin, 2002) and discursive resources. (Hardy &Phillips,1999)

Resources This chapter focus on material resources

Material resources are mobilized by institutional entrepreneurs to be used as a lever against other actors – subsidiary actors, allies, and external constituencies – to negotiate support for the change project in question (DiMaggio, 1988)

Positive inducement: rewards Negative inducements: punishments Recruit allies to control rewards and

punishments

Rationales How the content of the institutional

entrepreneur’s communication creates shared cognitions that support institutional change.

The discursive interventions associated with institutional entrepreneurship draws attention to the context in which legitimating accounts are produced.

Institutional entrepreneur’s discursive interventions in terms of the desired outcomes they are designed to achieve in relation to the targeted audience.

Relations Institutional entrepreneurship often

involves establishing new inter-actor relations to bring about change. (e.g., Dew,2006; Aldrich & Fiol, 1994; Garud et al., 2002)

Institutional entrepreneurship is associated with various forms of collaborative relations.

Institutional entrepreneurs engage in a range of material and discursive interventions aimed at changing inter-actor relations and bringing about collective action.

Three dimension of power (Lukes, 1974)

Institutional entrepreneurship is tightly connected to the exercise of power (Fligstein, 2001)

1st: The overt leveraging of material resources to ensure change even in the face of resistance, such as offering financial incentives, imposing penalities, or invoking formal authority, etc.

2nd: Less discussion, to manipulate decision agendas, arenas and participants to bring about change.

3rd: Discursive interventions to create and communicate convincing rationales.

Insights – Outcomes Actor-centric view: centered on the institutional

entrepreneur. Creation of new formal institutions, industries,

organizational forms, practices and identities. Process centric view: focus on institutional

entrepreneurship as an emergent outcome of activities of diverse, spatially dispersed actors (Lounsbury & Crumley, 2007) Major upheaval or transformation Changes that while they might be quite marked,

do not entail a significant redistribution of capital (Bourdieu, 1990)

Insights – broad view The two narratives are not necessarily

mutually exclusive; The great potential lies with the process-

centric narrative Three reasons (page212,213)

There are dangers in the recent groundswell of interest in institutional entrepreneurship Celebrating heroic “entrepreneurs” and

great “leaders” Reify fields, actors, and the process of

change itself.

Big questions in OT Why do organizations exist? Why are firms the same/different? What causes changes in organizations? Why do some firms survive and others

don’t? Emerging issue?

Thank you!