Institutional logic

Institutional Logic is a core concept in sociological theory and organizational studies that focuses on how broader belief systems shape the cognition and behavior of actors (see Friedland & Alford, 1991; Lounsbury, 2007; Thornton, 2004). Friedland and Alford (1991: 243) defined institutional logics as “both supraorganizational patterns of activity by which individuals and organizations produce and reproduce their material subsistence and organize time and space. They are also symbolic systems, ways of ordering reality, thereby rendering experience of time and space meaningful”.

Overview

Focusing on macro-societal phenomena, Friedland and Alford (1991: 232) identified several key institutional logics: the Capitalist market, bureaucratic state, democracy, nuclear family, and Christianity. Thornton (2004) revised Friedland and Alford’s (1991) inter-institutional scheme to six ideal types, i.e., the market, the corporation, the professions, the state, the family, and religions. This revision to a theoretically abstract and analytically distinct set of ideal types makes it useful for studying multiple logics in conflict and consensus, the hybridization of logics, and institutions in other parts of society and the world. While building on Friedland and Alford’s scheme, the revision addresses the confusion created by conflating institutional sectors with ideology (democracy) and means of organization (bureaucracy), variables that can be characteristic several different institutional sectors. The institutional logic of Christianity leaves out other religions in the US and other religions that are dominant in other parts of the world. Thornton and Ocasio (2008) discuss the importance of not confusing the ideal types of the inter-institutional system with a description of the empirical observations in a study—that is to use the ideal types as meta theory and method of analysis.

Organizational theorists operating within the new institutionalism have begun to develop the institutional logics concept by empricially testing it. One variant emphasizes how logics can focus the attention of key decision-makers on a particular set of issues and solutions (Ocasio, 1997), leading to logic-consistent decisions (Thornton, 2002). A fair amount of research on logics has focused on the importance of dominant logics and shifts from one logic to another (e.g., Thornton, 2002; Suddaby & Greenwood, 2005). Haveman and Rao (1997) showed how the rise of Progressive thought enabled a shift in savings and loan organizational forms in the U.S. in the early 20th century. Scott et al. (2000) detailed how logic shifts in healthcare led to the valorization of different actors, behaviors and governance structures. Thornton and Ocasio (1999) analyzed how a change from professional to market logics in U.S. higher education publishing led to corollary changes in how executive succession was carried out.

While earlier work focused on ambiguity as a result of multiple and conflicting institutional logics, at the levels of analysis of society and individual roles (Boltanski and Thevenot ( [1986] 1991), Friedland and Alford (1991:248-255) discussed in theory multiple and competing logics at the macro level of analsyis. Recent empirical research is developing a pluralistic approach by focusing on multiple competing logics and contestation of meaning (Lounsbury, 2007; Schneiberg, 2007). By focusing on how some fields are comprised of multiple logics, and thus, multiple forms of institutionally-based rationality, institutional analysts can provide new insight into practice variation and the dynamics of practice. Multiple logics can create diversity in practice by enabling variety in cognitive orientation and contestation over which practices are appropriate. As a result, such multiplicity can create enormous ambiguity, leading to logic blending, the creation of new logics, and the continued emergence of new practice variants. Thornton, Jones, and Kury (2005) showed how competing logics may never resolve but share the market space as in the case of architectural services.

Notes

References

* Boltansti, Luc and Laurent Thevenot ( [1986] 1991). On Justification Economies of Worth. Princeton, NJ: Princeton University Press.

* Friedland, Roger, and Robert R. Alford. 1991. “Bringing Society Back in: Symbols, Practices, and Institutional Contradictions.” Pp. 232-266 in The New Institutionalism in Organizational Analysis, edited by Walter W. Powell and Paul J. DiMaggio. Chicago: University of Chicago Press.

* Haveman, Heather A., and Hayagreeva Rao. 1997. Structuring a Theory of Moral Sentiments: Institutional and Organizational Coevolution in the Early Thrift Industry. American Journal of Sociology 102: 1606-1651.

* Lounsbury, Michael. 2007. A Tale of Two Cities: Competing Logics and Practice Variation in the Professionalizing of Mutual Funds. Academy of Management Journal, 50: 289-307

* Ocasio W. 1997. Towards an Attention-Based View of the Firm. Strategic Management Journal, 18:187-206.

* Schneiberg, Marc. 2007 ‘What’s on the Path? Path dependence, organizational diversity and the problem of institutional change in the U.S. economy, 1900-1950’. Socio-Economic Review 5: 47-80.

* Scott, W Richard, Martin Ruef, Peter Mendel, and Carol Caronna. 2000. Institutional Change and Healthcare Organizations: From Professional Dominance to Managed Care. Chicago: University of Chicago Press.

* Suddaby, R. and R. Greenwood. 2005. Rhetorical strategies of legitimacy. Administrative Science Quarterly, 50(1): 35-67.

* Thornton, Patricia H., and William Ocasio. 1999. Institutional Logics and the Historical Contingency of Power in Organizations: Executive Succession in the Higher Education Publishing Industry, 1958-1990. American Journal of Sociology 105: 801-843.

* Thornton, P.H. 2002. The Rise of the Corporation in a Craft Industry: Conflict and Conformity in Institutional Logics. Academy of Management Journal, 45: 81-101.

* Thornton, P.H. 2004. Markets from Culture: Institutional Logics and Organizational Decisions in Higher Education Publishing. Stanford, CA: Stanford University Press.

* Thornton, Patricia, Candace Jones, and Kenneth Kury 2005. “Institutional Logics and Institutional Change: Transformation in Accounting, Architecture, and Publishing, in Candace Jones and Patricia H. Thornton (eds.) Research in the Sociology of Organizations, London: JAI.

* Thornton, Patricia, H. and William Ocasio (2008). “Institutional Logics,” in Royston Greenwood, Christine Oliver, Salin Kerston Andersen, and Roy Suddaby (eds.) Handbook of Organizational Institutionalism, CA: Sage.


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