In 1977, prevailing theories of organization were based on a rational perspective that organizations established their formal structures to be as effective and efficient as possible. Redundancies and excess would be eliminated. However, John Meyer and Brian Rowan saw things differently – that “institutionalized products, services, techniques, policies, and programs function as powerful myths, and many organizations adopt them ceremonially” (p. 340), even if they result in organizations becoming less efficient or effective in their intended missions or purposes. In fact, these myths can become so powerful as to stigmatize organizations that reject them.

Examples abound in contemporary life. Legitimate fears over potential litigation has caused organizations to adopt structures to protect themselves against the threats of lawsuits, even if the possibility of successful lawsuits would be extremely low. Failure to establish formal positions dedicated to diversity, equity, inclusion, and accessibility can result in members and stakeholders to question the organization’s promotion of human dignity and equality. The belief that organizations can always be more efficient (e.g., “do more with less”) has led to increased quantification of performance indicators, leading to more administrative and analytical positions lest the organization be seen as inefficient or wasteful of its resources.

Meyer and Rowan argued that conformity to these institutionalized rules is therefore necessary for organizations to survive. However, because they can detract from the organization’s purpose, organizations cope by, by enacting rituals to show that it is adhering to the “rules”, yet also using loose coupling to protect its central work activities from unnecessary and unhelpful intrusion and subverting or weakening inspection of observation of those activities. Thus, while the formal structure of the organization grows to accommodate new institutional rules, in theory the work proceeds with minimal interruption or intervention.

Meyer and Rowan’s theory of institutionalization came out roughly at the same time as other theories that questioned the true source of formal structures, such as population ecology. This article, however, provided a broad and actionable research agenda that continues to produce useful scholarship. The author’s proposed three streams of research, each bearing much fruit: (1) that more institutionalized rules leads to more formal organization; (2) that organizations adopting more rules compared to others are often more “legitimate, successful, and able to survive,” and (3) the extent to which organizational control leads to more ritualistic conformity.

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Read with us:

Meyer, J. W., & Rowan, B. (1977). Institutionalized organizations: Formal structure as myth and ceremony. American journal of sociology, 83(2), 340-363.

To Learn More:

DiMaggio, P. J. & Powell, W. W. (1983). The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American sociological review, 147-160.

Eriksson-Zetterquist, U. (2019). The (Re?) Emergence of New Ideas in the Field of Organizational Studies. In The Production of Managerial Knowledge and Organizational Theory: New Approaches to Writing, Producing and Consuming Theory (pp. 123-139). Emerald Publishing Limited.

Hudson, B. A., Okhuysen, G. A., & Creed, W. D. (2015). Power and institutions: Stones in the road and some yellow bricks. Journal of Management Inquiry, 24(3), 233-238.

Meyer, J. W. & Bromley, P. (2013). The worldwide expansion of “organization”. Sociological Theory, 31(4), 366-389.

Oliver, C. (1991). Strategic responses to institutional processes. Academy of management review, 16(1), 145-179.

Oliver, C. (1992). The antecedents of deinstitutionalization. Organization Studies, 13(4), 563-588.

Sherer, P. D. & Lee, K. (2002). Institutional change in large law firms: A resource dependency and institutional perspective. Academy of Management journal, 45(1), 102-119.

Suárez, D. F. & Bromley, P. (2016). Institutional theories and levels of analysis: History, diffusion, and translation. World culture re-contextualised: Meaning constellations and path-dependencies in comparative and international education research, 139-159.

Tolbert, P. S. & Zucker, L. G. (1983). Institutional sources of change in the formal structure of organizations: The diffusion of civil service reform, 1880-1935. Administrative science quarterly, 22-39.

Tolbert, P. S. & Zucker, L. G. (1999). The institutionalization of institutional theory. Studying organization. Theory & method, 1, 169-184.

Willmott, H. (2015). Why institutional theory cannot be critical. Journal of Management Inquiry, 24(1), 105-111.

Zucker, L. G. (1977). The role of institutionalization in cultural persistence. American sociological review, 726-743.

Zucker, L. G. (1987). Institutional theories of organization. Annual review of sociology, 13(1), 443-464.