Management Organization Theory
by
Royston Greenwood, Bob Hinings
  • LAST REVIEWED: 01 March 2021
  • LAST MODIFIED: 29 June 2015
  • DOI: 10.1093/obo/9780199846740-0024

Introduction

Organization theory is concerned with the relationship between organizations and their environment, the effects of those relationships on organizational functioning, and how organizations affect the distribution of privilege in society. A central concept is organizational design (sometimes termed “organizational form”). Organizational design is important because the ability of societies to respond to various problems depends on the availability of organizations with different capabilities. Organization theorists are thus interested in the range of organizational designs; their governance, capabilities (e.g., the ability to innovate, learn, and adapt), processes (e.g., decision making), and consequences (and for whom); and how new organizational designs arise and become established. The authors of this bibliography would like to acknowledge the suggestions and constructive advice of Tony Briggs, David Deephouse, Jennifer Jennings, Sally Maitlis, Evelyn Micelotta, Mia Raynard, Wendy Smith, and Tyler Wry.

Textbooks

Organizational theory texts may cover the breadth of the field (see, e.g., Scott and Davis 2007, Tolbert and Hall 2009) or focus on particular themes, such as organizational design or organizational change (see, e.g., Daft 2007, Jones 2010). Most textbooks are revised and published as new editions every two or three years. A very different introduction to the literature is provided in Pugh and Hickson 2007, which is organized around the works of important scholars (not all of whom are organization theorists).

  • Daft, Richard L. Organization Theory and Design. 9th ed. Mason, OH: Thomson South-Western, 2007.

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    Focuses on organizational design, managing contextual relationships, and managing dynamic processes.

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  • Jones, Gareth R. Organizational Theory, Design, and Change: Text and Cases. 6th ed. Upper Saddle River, NJ: Pearson Prentice Hall, 2010.

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    Looks at organizational design and change.

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  • Pugh, Derek S., and David J. Hickson. Writers on Organizations. 6th ed. Thousand Oaks, CA: SAGE, 2007.

    DOI: 10.4135/9781483329628Save Citation »Export Citation »

    Unlike most texts, this one is not organized by topic or perspective. Instead, the text summarizes the works of a range of major scholars.

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  • Scott, W. Richard, and Gerald F. Davis. Organizations and Organizing: Rational, Natural, and Open System Perspectives. Upper Saddle River, NJ: Pearson Prentice Hall, 2007.

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    Revision of Scott’s Organizations: Rational, Natural, and Open Systems (Englewood Cliffs, NJ: Prentice-Hall, 1981), which ran to five editions.

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  • Tolbert, Pamela S., and Richard H. Hall. Organizations: Structures, Processes, and Outcomes. Upper Saddle River, NJ: Pearson Prentice Hall, 2009.

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    Based on classical and modern-day theory, this text examines the impacts organizations have on individuals and society.

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Journals

The Academy of Management publishes several journals that address organization theory. The Academy of Management Review is the major theoretical outlet, but despite its name, it does not include reviews. In contrast, the Academy of Management Annals, which appears annually, emphasizes reviews (both of theoretical perspectives and topics) and offers guidance in promising or underdeveloped directions. The Academy of Management Journal is the flagship, empirical journal of the academy. Other highly relevant journals include the Administrative Science Quarterly and Organization Science. These journals publish both empirical and theoretical papers, although the main focus is on empirical work. European outlets include Organization Studies, the official journal of the European Group for Organizational Studies (EGOS), and the Journal of Management Studies. More practically oriented journals include the Harvard Business Review and the California Management Review.

Handbooks

The early 21st century has seen a surge of handbook-style collections. Four of particular relevance to organization theory are cited here; they differ in their approaches. Clegg, et al. 2006 and Baum 2002 are collections of original contributions. Tsoukas and Knudsen 2003, as indicated by its title, is of a more philosophical bent. Adler 2009 is a set of essays, each discussing a major sociologist whose works have profoundly influenced the study of organizations.

  • Adler, Paul S., ed. The Oxford Handbook of Sociology and Organization Studies: Classical Foundations. Oxford: Oxford University Press, 2009.

    DOI: 10.1093/oxfordhb/9780199535231.001.0001Save Citation »Export Citation »

    Invaluable set of papers introducing and discussing contributions by organizational sociologists.

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  • Baum, Joel A. C., ed. The Blackwell Companion to Organizations. Oxford: Blackwell, 2002.

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    More highly structured than most handbooks, this one is arranged by level of analysis (intraorganizational, organizational, interorganizational), with chapters in each level covering the same perspectives.

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  • Clegg, Stewart R., Cynthia Hardy, Thomas B. Lawrence, and Walter R. Nord, eds. The SAGE Handbook of Organization Studies. 2d ed. London: SAGE, 2006.

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    Presents a range of topics, including reviews of some of the major organization theories, emerging themes, and issues of theorizing.

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  • Tsoukas, Haridimos, and Christian Knudsen, eds. The Oxford Handbook of Organization Theory: Meta-theoretical Perspectives. Oxford: Oxford University Press, 2003.

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    An erudite collection of philosophical reflections and analyses of organization theory.

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Collections of Readings

Collections are less common, but all the sources in this section contain original, highly cited writings by major figures. Pugh 2007 is an important resource that discusses much of organization theory, as does Shafritz, et al. 2011, which has an interesting opening chapter. Czarniawska 2006 covers similar ground but offers a more extensive set of papers.

  • Czarniawska, Barbara, ed. Organization Theory. 2 vols. International Library of Critical Writings on Business and Management. Cheltenham, UK: Elgar, 2006.

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    This collection groups exemplary papers by topic (e.g., decision making, organizational learning).

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  • Pugh, Derek S., ed. Organization Theory: Selected Classic Readings. 5th ed. London: Penguin, 2007.

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    Groups papers by their focus on organization structure, the organization in its environment, management decision making, people in organizations, and change and learning.

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  • Shafritz, Jay M., J. Steven Ott, and Yong Suk Jang, eds. Classics of Organization Theory. 7th ed. Boston: Wadsworth Cengage, 2011.

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    Distinctive for its first chapter, which provides material from Socrates to Luther Gulick. Thereafter the contributions are more typical of those found in collections of this kind.

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Thematic Collection

An increasingly important outlet for themes and developments in organization theory is the annual series Research in the Sociology of Organizations.

  • Research in the Sociology of Organizations. Bingley, UK: Emerald, 1982–.

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    The attraction of this annual series is that each volume is devoted to a theme (e.g., Volume 30, Michael Lounsbury and Paul Morris Hirsch, eds., Markets on Trial: The Sociology of the U.S. Financial Crisis [2010]), affording authors more opportunity to develop ideas outside the constraints of the typical format.

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Communities

The major forum for organization theory scholars is the Organization and Management Theory Division of the Academy of Management, which plays a significant role at the academy’s annual conference. The group also provides a web-based discussion and information service. In Europe the major community is the European Group for Organizational Studies (EGOS), which organizes an annual conference.

Central Theories and Perspectives

Organization theory consists of several theories and perspectives that are used to understand topics and concerns. Often these theories are taken from social science disciplines—especially sociology—but others have resulted from the topics and concerns themselves. Application of theories to topics and concerns inevitably results in enrichment of the theories and may also initiate development of new perspectives.

Beginnings

The origins of organization theory reside in the first half of the 20th century, notably in scientific management and classical management theory (extracts from the leading exponents of these approaches, Frederick W. Taylor and Henri Fayol, respectively, are in Pugh 2007, cited under Collections of Readings) and especially in Weberian analysis of bureaucracy. Scientific management was one of the earliest manifestations of time and motion studies (or industrial engineering) and was focused on production methods on the shop floor. Emphasis in this approach is on observation and measurement, and the role of management is to detail how work should be carried out. Classical management theory is much more explicitly about the organization as a whole and represents an attempt to theorize the functions of management and to establish the principles whereby they should be discharged. Max Weber analyzed organizations in terms of their authority structures; that is, the basis on which individuals accept the decisions of others. He distinguished among traditional, charismatic, and rational-legal bases, the latter of which finds expression in the modern bureaucracy. This organizational form, according to Weber, is the most efficient, because it imbues organizations with technical rationality and because its authority is premised on expertise and impartiality. However, a series of studies showed that the application of the bureaucratic form was not without difficulties (see, e.g., Gouldner 1955). Furthermore, the relevance of bureaucracy was found to be contingent on the nature of the tasks and the technology involved (see, e.g., Burns 1994) A different and highly influential approach to the study of organizations was adopted by James G. March and Herbert A. Simon (see March and Simon 1958, March and Simon 1993), whose central interest was understanding how and why decisions are made as they are and how they might be made more effectively. Emphasis was placed on a more realistic appreciation of the limitations of rationality and of the complexity and implicitly political nature of organizations. This approach evolved into the Behavioral Theory of the Firm and the study of Organizational Learning Theory.

  • Burns, Tom. “Preface.” In The Management of Innovation. Rev. ed. Edited by Tom Burns and G. M. Stalker, vii–xx. Oxford: Oxford University Press, 1994.

    DOI: 10.1093/acprof:oso/9780198288787.001.0001Save Citation »Export Citation »

    Interesting description of organization theory c. 1960, with the convergence of important works analyzing the problems associated with the supposedly efficient bureaucratic form. An important read for anyone wishing to understand the emergence of empirically based organization theory.

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  • Gouldner, Alvin W. Patterns of Industrial Bureaucracy. International Library of Sociology and Social Reconstruction. London: Routledge and Kegan Paul, 1955.

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    An early application of Weber’s concept of bureaucracy to modern industrial corporations. Explores and critically appraises Weber’s assumption that organizational members will comply with orders and rules, especially when bureaucratic methods displace a different set of arrangements. Introduces three patterns of bureaucratic behavior: mock, representative, and punishment centered. Gouldner insists that there are always unanticipated consequences, both positive and negative.

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  • March, James G., and Herbert A. Simon. Organizations. New York: Wiley, 1958.

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    An important early work that challenged the fairly simplistic ideas behind much management thought because of their weak behavioral assumptions. Highly analytic rather than empirical. Second edition published in 1993 (see March and Simon 1993).

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  • March, James G., and Herbert A. Simon. “Introduction.” In Organizations. 2d ed. By James G. March and Herbert A. Simon, 1–19. Cambridge, MA: Blackwell, 1993.

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    Summarizes the focus and purpose of March and Simon 1958, comments on its continuing relevance, and acknowledges themes and nuances that in retrospect were underemphasized.

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  • Weber, Max. “Legal Authority with a Bureaucratic Administrative Staff.” In The Theory of Social and Economic Organization. By Max Weber, 329–340. Translated by A. M. Henderson and Talcott Parsons. Edited by Talcott Parsons. Eastford, CT: Martino, 2012.

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    Originally published in 1947. The classic analysis of bureaucracy: this work forms the foundation for modern organization theory.

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Structural Contingency Theory / Information-Processing Theory

Prior to the 1960s it was largely assumed that organizations were more efficient and effective if they approximated the principles of Weberian bureaucracy. However, a series of studies demonstrated that organizational structures are contingent on the nature of organizational tasks—especially their uncertainty and ambiguity (see, e.g., Burns and Stalker 1994)—and on organizational size. Chandler 1990 added a variation to this theme, showing how complex, highly diversified strategies became associated with the multidivisional-form (M-form) organization. Another important early contribution was made by the Aston Group (see Pugh 1973), which systematically measured “dimensions” of bureaucracy (e.g., centralization, formalization) and compared the structures of organizations of different sizes and types; for example, manufacturing, service, public municipalities, and churches (Donaldson 1995). The term “contingency theory” was first used in Lawrence and Lorsch 1999, which shows that the greater the differentiation between the structures of departments, the higher the necessary range of integrative structures required to coordinate departments. These complementary processes of differentiation and integration remain fundamental to theorizing of organizational design. The central idea of contingency is the need to secure an appropriate “fit” between context and structure (Drazin and Van de Ven 1985); underpinning contingency is the information-processing theory of organizational design (Galbraith 1977), which portrays structure as channels of information. Structural contingency theory is less fashionable in the early 21st century. The theory is seen as overly technocratic and as minimizing the discretion (strategic choice) of senior managers. Also missing is any recognition that organizations might have difficulty identifying which contingencies are important or the appropriate responses to them. Nevertheless, the theory contains robust findings and still has advocates (see, e.g., Donaldson 1995), and it has seen a revival of interest in the early 21st century (see, e.g., Sine, et al. 2006 and Van de Ven, et al. 2013).

  • Burns, Tom, and G. M. Stalker. The Management of Innovation. Rev. ed. Oxford: Oxford University Press, 1994.

    DOI: 10.1093/acprof:oso/9780198288787.001.0001Save Citation »Export Citation »

    Originally published in 1961. This book identifies two basic organizational designs: mechanistic and organic. The former, which is virtually synonymous with Max Weber’s bureaucracy, is appropriate for predictable and repetitive situations. The latter is more appropriate for unpredictable and uncertain contexts. These models are summarized in chapter 6. But the book goes on to probe why organizations do not easily shift to the appropriate form, and it raises the issue of pathologies of organizational politics.

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  • Chandler, Alfred D. Strategy and Structure: Chapters in the History of the Industrial Enterprise. Cambridge, MA: MIT, 1990.

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    Originally published in 1962. Concerned with the rise of large-scale business enterprises between 1850 and 1920. Chandler develops his ideas from detailed case studies and takes the stance that strategy precedes structure. Hence, as corporations become larger and more complex through a strategy of mass production and diversification, they adopt more-appropriate structures, such as the M-form organization. Chandler also discusses the implications of these new structural arrangements for the role and power of management.

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  • Donaldson, Lex, ed. Contingency Theory. History of Management Thought. Aldershot, UK: Dartmouth, 1995.

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    A collection of important articles in the contingency perspective. Those by Jerald Hage and Michael Aiken (chapter 1), Paul R. Lawrence and Jay W. Lorsch (chapter 4), Robert Drazin and Andrew H. Van de Ven (chapter 5; see Drazin and Van de Ven 1985), Derek S. Pugh and colleagues (chapter 6), Donaldson (chapter 13), and John Child (chapter 20) capture the approach, its contribution, and its weaknesses.

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  • Drazin, Robert, and Andrew H. Van de Ven. “Alternative Forms of Fit in Contingency Theory.” Administrative Science Quarterly 30.4 (1985): 514–539.

    DOI: 10.2307/2392695Save Citation »Export Citation »

    This paper points out that “fit” is central to contingency theory but that the term has been used in different ways. The paper then compares and assesses the different approaches by applying them to employment security units in California. Available online by subscription.

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  • Galbraith, Jay R. Organization Design. Reading, MA: Addison-Wesley, 1977.

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    Classic text that treats organizations as information-processing vehicles, thus establishing how and why different organizational structures are better suited for particular tasks and circumstances.

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  • Lawrence, Paul R., and Jay W. Lorsch. Organizations and Environment: Managing Differentiation and Integration. Rev. ed. Boston: Harvard Business School, 1999.

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    Originally published in 1967. An essential book for any organization theory bookshelf. Analyzes how departments in an organization face different levels of uncertainty in their task environments and thus require different organizational arrangements. The greater these differences, the more difficult it is to coordinate the departments, hence necessitating more-complex integrative structures. Rich analysis of the implication of complex environments for organizational design.

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  • Pugh, Derek S. “The Measurement of Organization Structures: Does Context Determine Form?” Organizational Dynamics 1.4 (1973): 19–34.

    DOI: 10.1016/S0090-2616(73)80021-XSave Citation »Export Citation »

    Pugh was the leader of the Aston Group, which systematically analyzed Max Weber’s concept of bureaucracy, using the same approach that psychologists use to measure personality. Bureaucracy was disaggregated into a set of dimensions along which organizations were measured. The resulting structural forms were then associated with different contexts (e.g., organization size, technology, ownership). This paper summarizes the Aston approach. Available online for purchase or by subscription.

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  • Sine, Wesley, Hitoshi Mitsuhashi, and David A. Kirsch. “Revisiting Burns and Stalker: Formal Structure and New Venture Performance in Emerging Economic Sectors.” Academy of Management Journal 49.1 (2006): 121–132.

    DOI: 10.5465/AMJ.2006.20785590Save Citation »Export Citation »

    Interesting modern application and refinement of structural contingency theory. The paper shows that the Tom Burns and G. M. Stalker thesis—that in dynamic economic sectors, firms with organic structures are more effective than those with more-mechanistic structures—does not hold for new ventures in turbulent, emergent economic sectors. This exception is explained by reference to the particular liabilities of newness faced by new ventures. Available online for purchase or by subscription.

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  • Van de Ven, Andrew H., Martin Ganco, and C. R. Hinings. “Returning to the Frontier of Contingency Theory of Organizational and Institutional Designs.” Academy of Management Annals 7.1 (2013): 393–440.

    DOI: 10.1080/19416520.2013.774981Save Citation »Export Citation »

    Reviews the origins, development, and waning influence of structural contingency theory, which was eclipsed by the elaboration of alternative perspectives such as resource dependence and (especially) institutional theory. The paper proposes that combined with complexity theory, contingency might regain its resonance.

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Configuration Theory / Archetype Theory

Configuration theory developed from structural contingency theory. Configuration theory stresses that strategies, structures, and processes should be considered holistically; that is, as a pattern rather than (as in structural contingency theory) variable by variable (for an overview, see Meyer, et al. 1993). The theory acknowledges, moreover, that multiple configurations (organizational forms, organizational designs) can be successful. Performance in this sense depends on the overall coherence and alignment of the various organizational parts. Definitive early statements of the configuration approach are in Miles and Snow 2003, Miller and Friesen 1984, Miller 1986, Miller 1996, and Mintzberg 1983. A later variation of the approach, referred to as archetype theory, sees the coherence of an organizational configuration as provided by underlying sets of ideas and values. Furthermore, as Greenwood and Hinings 1993 notes, these ideas and values derive from the institutional context. Configuration theory emphasizes that change is problematic, because the internal coherence of strategies, structures, and processes provides a “momentum” that makes it difficult to perceive the need for change and that serves to resist it. Organizational configurations in this sense are not static but dynamic, actively reproducing themselves (Rivkin and Siggelkow 2003). Meyer, et al. 1993 connects configuration theory to an earlier interest in typologies. Typologies come from ideal types, defining organizational elements and their combinations a priori. Fiss 2007 suggests that there is a mismatch between theories and methods in researching organizational configurations and that set theoretic methods will reinvigorate the theory.

  • Fiss, Peer C. “A Set-Theoretic Approach to Organizational Configurations.” Academy of Management Review 32.4 (2007): 1180–1198.

    DOI: 10.5465/AMR.2007.26586092Save Citation »Export Citation »

    A continuing problem in configuration theory is a mismatch between theory and method. Use of set theoretic methods means that issues of equifinality and the limited diversity of configurations can be dealt with and that configuration theory can be appropriately matched to other theories. Available online for purchase or by subscription.

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  • Greenwood, Royston, and C. R. Hinings. “Understanding Strategic Change: The Contribution of Archetypes.” Academy of Management Journal 36.5 (1993): 1052–1081.

    DOI: 10.2307/256645Save Citation »Export Citation »

    Links configuration theory explicitly to institutional theory and in doing so partly rescues it from the criticism of technocratic bias often levied against structural contingency and configuration theory. The thesis is that organizations tend to adopt variations of institutionally prescribed archetypal organizational forms. Available online for purchase or by subscription.

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  • Meyer, Alan D., Anne S. Tsui, and C. R. Hinings. “Configurational Approaches to Organizational Analysis.” Academy of Management Journal 36.6 (1993): 1175–1195.

    DOI: 10.2307/256809Save Citation »Export Citation »

    An introduction to a special section devoted to configuration theory. The article defines configuration theory, distinguishes it from contingency theory, and highlights its major contributions. Provides a neat and accessible summary of the applicability of configuration theory at different levels of analysis. Available online for purchase or by subscription.

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  • Miles, Raymond E., and Charles C. Snow. Organizational Strategy, Structure, and Process. Stanford Business Classics. Stanford, CA: Stanford University Press, 2003.

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    Originally published in 1978. A definitive text that identifies distinct configurations of strategies and organizational arrangements: defenders, analyzers, and prospectors. Organizations stuck between these types are less successful. Interesting text that effectively links strategy with design.

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  • Miller, Danny. “Configurations of Strategy and Structure: Towards a Synthesis.” Strategic Management Journal 7.3 (1986): 233–249.

    DOI: 10.1002/smj.4250070305Save Citation »Export Citation »

    This paper is a direct application of configuration theory to the strategy literature asserting that the link between strategy and structure is a complex one based not on simple relationships but rather on complex networks of alignment between aspects of common structural types and popular forms of generic strategy. These alignments are argued to be both natural and salutary in their performance implications. Available online for purchase or by subscription.

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  • Miller, Danny. “Configurations Revisited.” Strategic Management Journal 17.7 (1996): 505–512.

    DOI: 10.1002/(SICI)1097-0266(199607)17:7%3C505::AID-SMJ852%3E3.0.CO;2-ISave Citation »Export Citation »

    In revisiting Miller 1986, Miller contends that there were also dysfunctional aspects of hyperalignment and that the degree of alignment (versus loose coupling) of organizational attributes was an important avenue of investigation. Available online for purchase or by subscription.

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  • Miller, Danny, and Peter H. Friesen. Organizations: A Quantum View. Englewood Cliffs, NJ: Prentice-Hall, 1984.

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    This is the first full-fledged empirical treatment of the configuration approach. It begins by providing a theoretical foundation for the approach and an overview of methods, before illustrating its results in the form of a typology of structure and distinct empirical taxonomies of strategy making in the context of organizational transitions. The book establishes the predictive superiority of the configuration approach over that of structural contingency theory and presents the implications of the approach for organizational change.

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  • Mintzberg, Henry. Structure in Fives: Designing Effective Organizations. Englewood Cliffs, NJ: Prentice-Hall, 1983.

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    This analytic text takes the building blocks of organizational strategy and structure and forms from them six patterns: the simple, entrepreneurial structure; the machine (bureaucratic) organization; the professional organization; the diversified organization; the innovative organization; and the missionary organization. A key advantage of this approach is its emphasis on the logic underlying each type. Written with Mintzberg’s typical clarity of style.

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  • Rivkin, Jan W., and Nicolaj Siggelkow. “Balancing Search and Stability: Interdependencies among Elements of Organization Design.” Management Science 49.3 (2003): 290–311.

    DOI: 10.1287/mnsc.49.3.290.12740Save Citation »Export Citation »

    Effective decision making, which is channeled by organizational design, requires balance between search and stability. This paper focuses on the interdependence of vertical hierarchy and other design elements, such as firmwide incentives. Offers some surprising insights—for example, circumstances in which vertical interdependencies lead to inferior long-term performance.

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Behavioral Theory of the Firm

The Carnegie school (summarized in Gavetti, et al. 2012) produced a series of works that explored decision making by individuals in organizations. Unlike the works of structural contingency theorists, who sought to understand which organizational forms matched contingent situations, Cyert and March 1963 sought to understand how organizations adapt to their environments. To do so the work applied ideas introduced in March and Simon 1993 to the level of the organization. Organizational decisions, Cyert and March 1963 suggests, are triggered by whether “performance aspirations” are (or are not) being met. Much research (summarized in Greve 2003 and Shinkle 2012) has explored this performance feedback thesis and by and large has concluded that feedback (especially historical aspirations) does affect decision making. Greve 1998 extends this research to consider the implications of feedback for risky organizational change. Cyert and March 1963 also notes that organizational decision making is affected by bounded rationality and by organizational politics. The image presented is of intendedly adaptive systems struggling to cope with complex and ambiguous information-processing demands. Furthermore, organizations are not homogeneous but are made up of participants with different preferences, leading to contested goals. Portrayed in this manner, the key managerial challenges are computational (how to handle uncertainty) and political (how to secure cooperation). Hence, decision making uses routines—“decision rules”—that not only overcome the limited cognitive capabilities of decision makers but also prevent political differences from escalating to a point of obstruction. Routines include “problemistic search,” “local search,” and “satisficing.” These processes imply that decisions will be incremental. Unlike structural contingency theory, which implicitly assumes that adaptation to changing environmental circumstance is easy, research in the behavioral tradition shows that most learning is essentially conservative. In the early 21st century, research in this tradition has moved explicitly into organizational learning and the associated themes of knowledge management and knowledge transfer (see Argote and Greve 2007). An important variant explores how organizations resolve the challenge of exploiting existing knowledge while exploring new knowledge (see Levinthal and March 1993).

  • Argote, Linda, and Henrich R. Greve. “A Behavioral Theory of the Firm—40 Years and Counting: Introduction and Impact.” In Special Issue: Behavioral Theory of the Firm. Edited by Linda Argote and Henrich R. Greve. Organization Science 18.3 (2007): 337–349.

    DOI: 10.1287/orsc.1070.0280Save Citation »Export Citation »

    This introduction to a special issue reviews the impact of the theory and discusses research trends.

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  • Cyert, Richard M., and James G. March. A Behavioral Theory of the Firm. Prentice-Hall International Series in Management. Englewood Cliffs, NJ: Prentice-Hall, 1963.

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    Given the assumption of bounded rationality and acknowledging that organizations are made up of competing groups with different interests, this landmark study identifies four features of organizational decision processes: quasi resolution of conflict, uncertainty avoidance, problemistic search, and organizational learning. (A second, shortened edition of this text [Cambridge, MA: Blackwell, 1992] contains an interesting postscript.)

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  • Gavetti, Giovanni, Henrich R. Greve, Daniel A. Levinthal, and William Ocasio. “The Behavioral Theory of the Firm: Assessment and Prospects.” Academy of Management Annals 6.1 (2012): 1–40.

    DOI: 10.1080/19416520.2012.656841Save Citation »Export Citation »

    Begins by discussing the new agenda that the theory introduced into organization theory, and then evaluates progress to date on that research agenda. Concludes by identifying underdeveloped ideas and emerging possibilities.

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  • Greve, Henrich R. “Performance, Aspirations, and Risky Organizational Change.” Administrative Science Quarterly 43.1 (1998): 58–86.

    DOI: 10.2307/2393591Save Citation »Export Citation »

    An example of performance feedback research that examines how performance feedback affects the probability of risky organizational changes that are important for performance. Available online by subscription.

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  • Greve, Henrich R. Organizational Learning from Performance Feedback: A Behavioral Perspective on Innovation and Change. Cambridge, UK: Cambridge University Press, 2003.

    DOI: 10.1017/CBO9780511615139Save Citation »Export Citation »

    Reviews the evidence on how organizations evolve in response to feedback on their performance. Connects organizational learning to competitive rivalry and institutional influences.

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  • Levinthal, Daniel A., and James G. March. “The Myopia of Learning.” Strategic Management Journal 14.S2 (1993): 95–112.

    DOI: 10.1002/smj.4250141009Save Citation »Export Citation »

    Looks at how organizations approach the problem of balancing exploitation and exploration through simplification and specialization and how this approach contributes to three forms of learning myopia: the tendency to overlook distant times, distant places, and failures. Available online for purchase or by subscription.

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  • March, James G., and Herbert A. Simon. Organizations. 2d ed. Cambridge, MA: Blackwell, 1993.

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    Originally published in 1958. Chapter 2 reviews scientific management and classical management theory and points out their questionable assumptions of motivation and neglect of intraorganizational conflicts, cognitive limitations on decision making, and task identification and classification. Each of these limitations is elaborated in a subsequent chapter.

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  • Shinkle, George A. “Organizational Aspirations, Reference Points, and Goals: Building on the Past and Aiming for the Future.” Journal of Management 38.1 (2012): 415–455.

    DOI: 10.1177/0149206311419856Save Citation »Export Citation »

    Comprehensive review of studies into the thesis of organizational aspiration and performance feedback. In addition, the article compares this approach with other approaches to understanding the role of organizational goals and suggests potential lines of study.

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Organizational Learning Theory

Organizational learning—an intellectual descendant of the Behavioral Theory of the Firm—focuses on processes and attributes that affect the capability of an organization to learn, including attributes of the organization itself, such as its “absorptive capacity” (see Cohen and Levinthal 1990, Zahra and George 2002), which precipitated interest in “dynamic capabilities,” relationships between organizations and organizational units, and the nature of the knowledge itself, especially whether it is tacit or codified. An important line of work looks at learning curves (e.g., Argote 1999) and the circumstances under which organizations are able to transfer knowledge between units in the organization. A different approach examines how organizations learn from the experiences of other organizations, exploring such factors as organizational size, visibility, status, and performance and geographic proximity and direct ties (see Beckman and Haunschild 2002, Greve 2005). A related perspective suggests that the locus of learning is the network itself rather than the individual firm (see Powell, et al. 1996).

  • Argote, Linda. Organizational Learning: Creating, Retaining, and Transferring Knowledge. Boston: Kluwer, 1999.

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    The standard review of why some organizations learn at faster rates than others. Chapters deal with the learning curve, organizational forgetting, organizational memory, the microunderpinnings of learning, and knowledge transfer. Excellent starting point.

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  • Beckman, Christine M., and Pamela R. Haunschild. “Network Learning: The Effects of Partners’ Heterogeneity of Experience on Corporate Acquisitions.” Administrative Science Quarterly 47.1 (2002): 92–124.

    DOI: 10.2307/3094892Save Citation »Export Citation »

    Examines the effects of interorganizational networks on acquisition decisions. Firms tied to others with heterogeneous prior experience pay less for their acquisitions and have better-performing acquisitions than those tied to others with homogeneous experience. Firms also pay lower premiums when their network partners have completed deals of diverse sizes, have unique information, or are themselves of diverse sizes. Available online for purchase or by subscription.

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  • Cohen, Wesley M., and Daniel A. Levinthal. “Absorptive Capacity: A New Perspective on Learning and Innovation.” In Special Issue: Technology, Organizations, and Innovation. Edited by Michael L. Tushman and Richard R. Nelson. Administrative Science Quarterly 35.1 (1990): 128–152.

    DOI: 10.2307/2393553Save Citation »Export Citation »

    Highly influential paper that introduces a critical factor affecting the ability of organizations to learn—their absorptive capacity. Available online by subscription.

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  • Greve, Henrich R. “Interorganizational Learning and Heterogeneous Social Structure.” Organization Studies 26.7 (2005): 1025–1047.

    DOI: 10.1177/0170840605053539Save Citation »Export Citation »

    Suggests that interorganizational learning is a function of the susceptibility of an organization to outside ideas, the infectiousness of the point of origin of ideas, and the proximity of organizations. Available online for purchase or by subscription.

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  • Powell, Walter W., Kenneth W. Koput, and Laurel Smith-Doerr. “Interorganizational Collaboration and the Locus of Innovation: Networks of Learning in Biotechnology.” Administrative Science Quarterly 41.1 (1996): 116–145.

    DOI: 10.2307/2393988Save Citation »Export Citation »

    Shows that when an industry is complex and expanding and the sources of expertise are widely dispersed, the locus of innovation will be found in networks of learning rather than in individual firms. The authors offer a network approach to organizational learning that links research and development alliances, experience with managing interfirm relationships, network position, rates of growth, and portfolios of collaborative activities. Available online by subscription.

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  • Zahra, Shaker A., and Gerard George. “Absorptive Capacity: A Review, Reconceptualization, and Extension.” Academy of Management Review 27.2 (2002): 185–203.

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    Useful review of the literature on absorptive capacity that also offers a reconceptualization. Building on the dynamic capabilities view of the firm, the authors distinguish between a firm’s potential and realized capacities and advance a model outlining when these capacities can influence the firm’s competitive advantage. Available online by subscription.

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Resource Dependence Theory

Resource dependence theory, initially proposed in Pfeffer and Salancik 2003 and Aldrich 2008 and refined in Casciaro and Piskorski 2005, advances that organizations seek to control their environments in order to access critical resources, which are both material (e.g., money) and symbolic (e.g., legitimacy, social endorsement). The theory is thus an explicitly political model emphasizing relationships between firms. Organizations strive to avoid becoming overly dependent on other organizations for resources that are necessary for organizational survival while trying to make these other organizations dependent on them. Organizations use various strategies, including alliances, joint ventures, interlocking board directorates, and associations with high-status firms, to accomplish these aims (reviewed in Hillman, et al. 2009). Resource dependence theory includes an intraorganizational theory of power derived from the strategic contingency theory of power (Hickson, et al. 1971). Resource dependence theory is often combined with other perspectives, notably network and institutional theory (see, e.g., Oliver 1991 and Wry, et al. 2013). Pfeffer 2005 provides an interesting reflection and reconsideration of the theory.

  • Aldrich, Howard E. Organizations and Environment. Stanford Business Classics. Stanford, CA: Stanford Business Books, 2008.

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    Originally published in 1979. An inclusive analysis of organizations and their relationships with their environmental contexts. Begins with the ecological model, discusses the persistence and transformation of organizations, and then analyzes how organizations seek to manage their interorganizational relationships to enhance their dependencies.

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  • Casciaro, Tiziana, and Mikołaj Jan Piskorski. “Power Imbalance, Mutual Dependence, and Constraint Absorption: A Closer Look at Resource Dependence Theory.” Administrative Science Quarterly 50.2 (2005): 167–199.

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    Finds several ambiguities in the resource dependence model and proposes a reformulation based on two dimensions (power imbalance, mutual dependence) that were combined in the original theory. Shows that these dimensions have opposite effects on an organization’s ability to absorb sources of external constraint. Available online for purchase or by subscription.

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  • Hickson, David J., C. R. Hinings, Charles A. Lee, Rodney E. Schneck, and Johannes M. Pennings. “A Strategic Contingencies’ Theory of Intraorganizational Power.” Administrative Science Quarterly 16.2 (1971): 216–229.

    DOI: 10.2307/2391831Save Citation »Export Citation »

    The theory of intraorganizational power in The External Control of Organizations (Pfeffer and Salancik 2003) is taken from this paper, which empirically confirms that power in an organization resides with the department best able to handle the critical uncertainty—or, in the language of resource dependency theory, the critical resource dependence—confronting the firm. Available online by subscription.

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  • Hillman, Amy J., Michael C. Withers, and Brian J. Collins. “Resource Dependence Theory: A Review.” Journal of Management 35.6 (2009): 1404–1427.

    DOI: 10.1177/0149206309343469Save Citation »Export Citation »

    The authors structure their review of work done in the thirty years since resource dependency was initially formulated around the five strategies put forward in Pfeffer and Salancik 2003 as ways of reducing dependency: mergers and vertical integration, joint ventures, interlocking boards of directors, political action, and executive succession.

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  • Oliver, Christine. “Strategic Responses to Institutional Processes.” Academy of Management Review 16.1 (1991): 145–179.

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    Oliver incorporates resource dependency theory into institutional theory and offers a highly influential framework for understanding how and under what circumstances organizations might accommodate or resist institutional demands. Available online for purchase or by subscription.

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  • Pfeffer, Jeffrey. “Developing Resource Dependence Theory: How Theory Is Affected by Its Environment.” In Great Minds in Management: The Process of Theory Development. Edited by Ken G. Smith and Michael A. Hitt, 436–459. Oxford: Oxford University Press, 2005.

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    An interesting account of how the theory emerged and its subsequent evolution. The author responds to several comments and criticisms of the theory. Also includes a discussion of some of the factors that affect how a theoretical perspective may or may not become prominent.

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  • Pfeffer, Jeffrey, and Gerald R. Salancik. The External Control of Organizations: A Resource Dependence Perspective. Stanford Business Classics. Stanford, CA: Stanford Business Books, 2003.

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    Originally published in 1978. The 1978 text laid the foundational building blocks of resource dependence theory. Pfeffer’s introduction to this edition summarizes developments since that text’s initial publication.

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  • Wry, Tyler, J. Adam Cobb, and Howard E. Aldrich. “More Than a Metaphor: Assessing the Historical Legacy of Resource Dependence and Its Contemporary Promise as a Theory of Environmental Complexity.” Academy of Management Annals 7.1 (2013): 441–488.

    DOI: 10.1080/19416520.2013.781862Save Citation »Export Citation »

    Comprehensive review both of the traditional and current literature on resource dependence, suggesting how it might be further developed. The paper points to a neglected central theme of resource dependence theory and argues that it remains an important challenge for early-21st-century organization.

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Neo-institutional Theory

Meyer and Rowan 1977 challenges the idea of organizations as embedded in exclusively economic contexts in which technical considerations are dominant. Instead, this work points to the role of social and cultural (institutional) factors and to how organizations conform to social expectations, because doing so provides legitimacy and enhances survival prospects. Moreover, as later works (e.g., Scott 2008) point out, market structures themselves are institutionally defined. Much early neo-institutional research examined the extent to which organizations converge around the same organizational form; that is, how they exhibit isomorphism (DiMaggio and Powell 1983). Responding to early critiques and suggestions in DiMaggio and Powell 1983 and Oliver 1991 (see Resource Dependence Theory), later work turned to understanding the processes and mechanisms by which institutional prescriptions are socially reproduced and changed, providing research a necessary correction to the previous imagery of institutional determinism. The level of analysis of most institutional research is the organizational field (see Powell and DiMaggio 1991), although the more recent interest in hybrid organizations is providing a correction to this imbalance. Fields are stabilized by institutional logics; that is, socially constructed norms and beliefs that define field membership, provide role identities, and regulate patterns of relationships (Thornton, et al. 2012). An important research endeavor is understanding how those logics are monitored, enforced, and thus maintained, and how they are destabilized and replaced. Often, the framework for this line of research draws on theory of social movement. Focusing on the organizational field draws attention to processes of structuration, whereby organizations are portrayed as constrained by institutional structures but in their behaviors reproducing and translating them, sometimes imperfectly, leading to institutional innovation and change. Giving attention to institutional entrepreneurship and change recognizes purposive behavior and raises the “paradox of embedded agency” (Battilana, et al. 2009). It has also led to explicit interest in institutional work (Lawrence and Suddaby 2006). An early-21st-century research theme is exploring how organizations experience and cope with the presence of multiple logics (Kraatz and Block 2008; also see Hybrid Organizations).

  • Battilana, Julie, Bernard Leca, and Eva Boxenbaum. “How Actors Change Institutions: Towards a Theory of Institutional Entrepreneurship.” Academy of Management Annals 3.1 (2009): 65–107.

    DOI: 10.1080/19416520903053598Save Citation »Export Citation »

    Reviews the literature on institutional entrepreneurship and proposes a process model comprising phases that extend from the emergence of institutional entrepreneurs to implementation of change.

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  • DiMaggio, Paul J., and Walter W. Powell. “The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields.” American Sociological Review 48.2 (1983): 147–160.

    DOI: 10.2307/2095101Save Citation »Export Citation »

    Organizations confronting similar institutional contexts deploy similar structures and processes; that is, they exhibit isomorphism. This paper puts forward three mechanisms (mimetic, normative, cognitive) whereby prescriptions of appropriate behavior diffuse, each associated with a different motivation. Available online for purchase or by subscription.

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  • Kraatz, Matthew S., and Emily S. Block. “Organizational Implications of Institutional Pluralism.” In The SAGE Handbook of Organizational Institutionalism. Edited by Royston Greenwood, Christine Oliver, Kerstin Sahlin, and Roy Suddaby, 243–275. Los Angeles: SAGE, 2008.

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    Reviews and analyzes situations faced by an organization operating within multiple institutional spheres, which therefore confronts more than one institutional logic. These logics may be compatible or not. Discusses the implications for organizational legitimacy, governance, and change.

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  • Lawrence, Thomas B., and Roy Suddaby. “Institutions and Institutional Work.” In The SAGE Handbook of Organization Studies. 2d ed. Edited by Stewart R. Clegg, Cynthia Hardy, Thomas B. Lawrence, and Walter R. Nord, 215–254. London: SAGE, 2006.

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    Emphasizes the importance of understanding the role of actors in effecting, transforming, and maintaining institutions. Makes the case for further investigation of institutional work; that is, the “broad category of purposive action” (p. 216).

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  • Meyer, John W., and Brian Rowan. “Institutionalized Organizations: Formal Structure as Myth and Ceremony.” American Journal of Sociology 83.2 (1977): 340–363.

    DOI: 10.1086/226550Save Citation »Export Citation »

    The paper that first presented the neo-institutional perspective. The authors note that organizations are significantly influenced by cultural expectations, “rational myths” of appropriate conduct. Conformity with those myths results in social endorsement (legitimacy) and opens access to resources. Available online by subscription.

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  • Oliver, Christine. “Strategic Responses to Organizational Processes.” Academy of Management Review 16.1 (1991): 145–179.

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    This paper challenged the then prevailing imagery of organizations uncritically adopting institutional prescriptions. By combining institutional theory with resource dependence theory, the author provides a range of possible responses and the circumstances under which they might be deployed. Available online for purchase or by subscription.

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  • Powell, Walter W., and Paul J. DiMaggio, eds. The New Institutionalism in Organizational Analysis. Chicago: University of Chicago Press, 1991.

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    Landmark collection of papers—some modified classics, others original. The introduction by the editors is a masterful survey of institutional theorizing in the social sciences. Chapter 10, by Roger Friedland and Robert R. Alford, introduces the idea of institutional logics and has been particularly influential.

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  • Scott, W. Richard. Institutions and Organizations: Ideas and Interests. 3d ed. Los Angeles: SAGE, 2008.

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    Undoubtedly the overview introduction to institutional scholarship. Contains the “three pillars” framework—normative, mimetic, cognitive-cultural—that underpins much institutional scholarship. Gives a balanced and insightful summary of how institutional ideas have evolved and an assessment of early-21st-century trajectories.

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  • Thornton, Patricia H., William Ocasio, and Michael Lounsbury. The Institutional Logics Perspective: A New Approach to Culture, Structure, and Process. Oxford: Oxford University Press, 2012.

    DOI: 10.1093/acprof:oso/9780199601936.001.0001Save Citation »Export Citation »

    The definitive analysis of the institutional logics approach to institutional theorizing.

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  • Tolbert, Pamela S., and Lynne G. Zucker. “Institutional Sources of Change in the Formal Structure of Organizations: The Diffusion of Civil Service Reform, 1880–1935.” Administrative Science Quarterly 28.1 (1983): 22–39.

    DOI: 10.2307/2392383Save Citation »Export Citation »

    A very early application of isomorphism. The authors examine the spread of civil service reform and observe that early adopters do so for reasons related to internal organizational requirements whereas late adopters appear simply to copy others. The authors conclude that as practices become prevalent, their adoption is for institutional reasons. This two-stage model of diffusion became a core idea of institutionalism. Available online by subscription.

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Ecology Theory

Most organization theories operate at the level of the organization and are concerned, albeit in various ways, with the relationship between a focal organization and its context (environment). Ecology theory is distinctly different, focusing on “populations” of organizations; that is, aggregates of organizations that share common characteristics (usually a common organizational form). As initially developed (Hannan and Freeman 1977), the theory was in the lineage of structural contingency theory in that it dealt with the variety of organizational forms and regarded organizational survival as the product of fit between organizational forms and primarily market forces. But the theory is distinctive in two ways. First, ecological theory is interested in how organizational forms per se (not individual organizations) prevail. Second, changes in an organization’s context pose survival challenges because managers are unable to change organizational strategies and structures quickly enough. Movement between organizational forms is thus highly problematic (this idea separates ecological theory from structural contingency theory). By highlighting the difficulties of achieving change, ecologists are at the opposite extreme of structural contingency theory and are distant from resource dependence. Nevertheless, ecological theory echoes the same basic assumption that organizational forms survive to the extent that they match the exigencies of the economic context. As discussed in Baum and Amburgey 2002 and Carroll and Hannan 2004, ecologists are interested in three processes (circumstances that generate novel organizational forms): diversity in the range of populations, selection processes (i.e., characteristics of the resource context that determine the survival or death of particular organizational populations), and retention processes. Factors affecting survival rates are demographic (e.g., age, size), ecological (specialist versus generalist organizations), environmental (social and political shifts), and institutional (see Baum and Oliver 1991). Early formulations of ecological theory, such as Hannan and Freeman 1977 and Hannan and Freeman 1984, appeared to minimize the role of agency, but more-recent formulations, such as ideas of resource partitioning, are more readily applied to strategic management. Damaging criticisms often levied against the ecological perspective are its almost exclusive inattention to cultural forces and its assumption of competition between organizations in a population (i.e., no allowance is given for cooperative relations).

  • Baum, Joel A. C., and Terry L. Amburgey. “Organizational Ecology.” In The Blackwell Companion to Organizations. Edited by Joel A. C. Baum, 304–326. Oxford: Blackwell, 2002.

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    Excellent overview of the theory’s conceptual framework, primary theoretical questions, and empirical work.

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  • Baum, Joel A. C., and Christine Oliver. “Institutional Linkages and Organizational Mortality.” Administrative Science Quarterly 36.2 (1991): 187–218.

    DOI: 10.2307/2393353Save Citation »Export Citation »

    Neat investigation that combines ideas from ecology with institutional reasoning. Shows how an organization’s associations with prestigious others provide legitimacy and thus enhance survival rates. Available online by subscription.

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  • Carroll, Glenn R., and Michael T. Hannan. The Demography of Corporations and Industries. Princeton, NJ: Princeton University Press, 2004.

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    Provides a definitive overview and restatement of ecology theory by two of its foremost proponents.

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  • Hannan, Michael T., and John Freeman. “The Population Ecology of Organizations.” American Journal of Sociology 82.5 (1977): 929–964.

    DOI: 10.1086/226424Save Citation »Export Citation »

    The paper that started the population level of theorizing. It ran counter to the then prevailing theory, which emphasized the organization or the organization set. Available online by subscription.

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  • Hannan, Michael T., and John Freeman. “Structural Inertia and Organizational Change.” American Sociological Review 49.2 (1984): 149–164.

    DOI: 10.2307/2095567Save Citation »Export Citation »

    This paper directly challenges the notion that organizations can adapt quickly enough to accomplish successful change. Available online by subscription.

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Transaction Cost Economics

In the 1930s the economist Richard Coase asked, why do organizations exist at all? Put another way, what advantages do organizations provide relative to market exchanges? And if organizations are necessary, where should an organization’s boundaries be drawn? Is it better, for example, to outsource activities or to hold them in-house? This line of analysis is the basis of the theory of the firm exemplified in the work of Oliver E. Williamson, who more than any other writer has popularized this line of inquiry (see Williamson 2005). According to the theory, market exchanges (transactions) are not frictionless; they involve contracts between parties, and these incur the costs of discovering relevant prices, negotiating contracts, and enforcing and renegotiating the contracts. These costs are exacerbated if transactions are highly uncertain, occur with great frequency, or especially involve assets that are specific to the parties to the exchange (Palmer, et al. 1993; Hennart 1991; Nickerson and Silverman 2003). Empirical support, however, is mixed (David and Han 2004, Lazerson 1995). In the early 21st century this theory noticeably speaks to issues such as the shift from vertically integrated to network forms of organizing, outsourcing, the governance of joint ventures and alliances, and employment relationships (Zenger, et al. 2011). The theory is criticized for its narrow conception of human nature and particularly its neglect of social embeddedness (see, e.g., Nahapiet and Ghoshal 1998).

  • David, Robert J., and Shin-Kap Han. “A Systematic Assessment of the Empirical Support for Transaction Cost Economics.” Strategic Management Journal 25.1 (2004): 39–58.

    DOI: 10.1002/smj.359Save Citation »Export Citation »

    More than sixty articles are examined. Shows that support for transaction costs is mixed in part because of “considerable disagreement” on the operationalization of central constructs. Available online for purchase or by subscription.

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  • Hennart, Jean-François. “The Transactions Cost Theory of Joint Ventures: An Empirical Study of Japanese Subsidiaries in the United States.” Management Science 37.4 (1991): 483–497.

    DOI: 10.1287/mnsc.37.4.483Save Citation »Export Citation »

    Large-scale survey of factors influencing whether Japanese companies use full or partial ownership of US manufacturing subsidiaries. Finds that Japanese firms use joint ventures when there are high market transaction costs. Available online for purchase or by subscription.

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  • Lazerson, Mark. “A New Phoenix? Modern Putting-Out in the Modena Knitwear Industry.” Administrative Science Quarterly 40.1 (1995): 34–59.

    DOI: 10.2307/2393699Save Citation »Export Citation »

    Careful account of the Italian knitwear region, which has retained putting-out practices that are inconsistent with the transaction cost economics (TCE) thesis, which would predict emergence of larger mass production organizations. The study highlights that TCE ignores the role of social connections and reciprocity, instead favoring pecuniary motivations of behavior. The Modena system foregrounds the role of family networks and a supportive institutional context. Available online by subscription.

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  • Nahapiet, Janine, and Sumantra Ghoshal. “Social Capital, Intellectual Capital, and the Organizational Advantage.” Academy of Management Review 23.2 (1998): 242–266.

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    Adds to the debate on the benefits of organizations relative to markets by emphasizing the importance of social capital—both its generation and the ability to transfer it across structural, cognitive, and relational obstacles. Social capital is a mechanism that enables organizations to outperform markets. Available online for purchase or by subscription.

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  • Nickerson, Jack A., and Brian S. Silverman. “Why Firms Want to Organize Efficiently and What Keeps Them from Doing So: Inappropriate Governance, Performance, and Adaptation in a Deregulated Industry.” Administrative Science Quarterly 48.3 (2003): 433–465.

    DOI: 10.2307/3556680Save Citation »Export Citation »

    Looks at companies in the trucking industry and their contracts with drivers and analyzes the factors that affect the choice between combinations of in-house drivers and self-employed owner-operators. Finds that organizations that govern transactions in accordance with TCE prescriptions exhibit higher profitability than those that do not govern transactions appropriately. Available online for purchase or by subscription.

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  • Palmer, Donald A., P. Devereaux Jennings, and Xueguang Zhou. “Late Adoption of the Multidivisional Form by Large U.S. Corporations: Institutional, Political, and Economic Accounts.” Administrative Science Quarterly 38.1 (1993): 100–131.

    DOI: 10.2307/2393256Save Citation »Export Citation »

    This article provides some support for Oliver E. Williamson’s thesis that the multidivisional form (M-form) has advantages over the functional form for large, complex organizations. Available online by subscription.

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  • Williamson, Oliver E. “Transaction Cost Economics: The Process of Theory Development.” In Great Minds in Management: The Process of Theory Development. Edited by Ken G. Smith and Michael H. Hitt, 485–508. Oxford: Oxford University Press, 2005.

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    Williamson traces the intellectual roots of TCE to works of the 1930s in the disciplines of law, economics, and organization theory. He also shows TCE resurgence and elaboration through the 1960s, leading to his biographical account of the TCE framework. This is a very accessible introduction to a complex perspective.

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  • Zenger, Todd R., Teppo Felin, and Lyda Bigelow. “Theories of the Firm-Market Boundary.” Academy of Management Annals 5.1 (2011): 89–133.

    DOI: 10.1080/19416520.2011.590301Save Citation »Export Citation »

    Excellent review of the literature. Offers a balanced account of the ideas and empirical work in the area. Focuses on four central questions: (1) What are the virtues of markets? (2) What causes markets to fail? (3) What are the virtues of organizational integration? (4) What factors cause organizations to fail? Available online for purchase or by subscription.

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Agency Theory

Agency theory is concerned with the difficulties that occur when a principal hires or contracts with an agent to carry out activities on the principal’s behalf (Jensen and Meckling 1976, Eisenhardt 1989). The classic example is the owner (the shareholder) of a firm and the chief executive officer (CEO; the agent). Under conditions of incomplete or asymmetrical information (especially when the principal lacks information), how can the principal ensure that the agent acts in the principal’s interests and not his or her own? Agency theory assumes that agents are driven by self-interest and that unless appropriate arrangements are put in place, the agent will take advantage. The challenge is to devise compensation arrangements that make the agent’s interests coincide with those of the principal or to put in place effective arrangements for monitoring the agent’s actions and performance. One arrangement is to link CEO compensation to the interests of shareholders through use of stock option plans. An alternative arrangement is to establish a system of governance using, for example, independent directors (representing shareholders). Agency theory’s assumptions are challenged by organization theorists (see, e.g., Ghoshal 2005 and Dalton, et al. 1998), but the theory’s influence on research into governance structures is great. Agency theory is directly contradicted by stewardship theory.

Network Theory

Network analysis deals with the relationships between organizations, or between units in organizations, or both. Those relationships, or ties, can be direct (e.g., organizations linked through common directors) or indirect (e.g., organizations linked via an intermediary) and vary according to the frequency of interaction. Strong ties have high frequency (Granovetter 1973). Direct ties constitute an organization set. Research into network patterns has looked at the extent to which networks consist of dense ties, how far they are focused (centralized) on a small number of organizations, and the benefits of different positions in a network. Three distinct streams of network research may be identified. One approach studies the structure of links connecting organizations. In this approach, networks are portrayed as structures of resource flows that provide opportunities for some organizations by virtue of their connections and positions in the network (e.g., Burt 1992). This approach to networks has an affinity with the imagery of resource dependence theory. A second approach, closer to the logic of institutional theory, sees organizations not as taking advantage of a network but as being shaped by it. Research in this tradition explores how ideas and practices disseminate through networks, resulting in convergence around a limited range of organizational forms (e.g., Davis 1991). A third approach conceptualizes networks as embedded relationships. Studies examine how networks are constructed and their consequences, such as the ability of the network as a whole to innovate and of individual firms to survive (e.g., Uzzi 1997; see also Powell, et al. 1996, cited under Organizational Learning Theory). The difference between networks as relationships and networks as opportunities is significant. The networks-as-opportunities approach emphasizes that networks evolve because of organizational specialization and patterns of resource dependencies between organizations, and it highlights that some organizations secure advantages by virtue of their positions in existing networks. The relational approach, in contrast, emphasizes how networks arise from concerns with identifying trustworthy partners. It sees the benefits of networks arising from social norms that enable coordination by removing the fear of opportunism in economic exchanges. An organization’s advantage is therefore a function of the normative strength of its network; that is, its “social closure” (Gulati, et al. 2012). This distinction represents an important shift in the concept of organizational form. Interest in networks began with depictions of them as an aspect of context and thus as a determinant of organizational form, whereas more-recent research (e.g., Powell 1990) treats networks as organizational forms in their own right. There is considerable interest in these virtual, or network, organizations (Miles and Snow 1992). Jones, et al. 1997 provides a general theory of when they are most likely to emerge. A very different shift in early-21st-century attention is to intraorganizational networks. McEvily, et al. 2014 uses the network approach to revisit the relationships between formal and informal social structures within organizations. Network theory has developed a distinctive language (Kilduff and Shipilov 2011).

  • Burt, Ronald S. Structural Holes: The Social Structure of Competition. Cambridge, MA: Harvard University Press, 1992.

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    Exposition and elaboration of one of the central themes and terms—“structural holes”—in network analysis. Basic thesis is that networks are opportunity structures for the organizations strategically positioned in them. Not an introductory text.

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  • Davis, Gerald F. “Agents without Principles? The Spread of the Poison Pill through the Intercorporate Network.” Administrative Science Quarterly 36.4 (1991): 583–613.

    DOI: 10.2307/2393275Save Citation »Export Citation »

    Illustrates how ideas and practices are carried through networks of common membership of corporate boards of directors. Compares the predictions of agency theory with interorganizational (network) theory and finds in favor of the latter. Available online by subscription.

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  • Granovetter, Mark S. “The Strength of Weak Ties.” American Journal of Sociology 78.6 (1973): 1360–1380.

    DOI: 10.1086/225469Save Citation »Export Citation »

    Absolute classic. A must-read for anyone exploring network theory. Points out that strong and weak ties provide different benefits. Strong ties offer cohesion and high trust. Weak ties typically connect to a wider and more disparate set of sources.

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  • Gulati, Ranjay, Franz Wohlgezogen, and Pavel Zhelyazkov. “The Two Facets of Collaboration: Cooperation and Coordination in Strategic Alliances.” Academy of Management Annals 6.1 (2012): 531–583.

    DOI: 10.1080/19416520.2012.691646Save Citation »Export Citation »

    Distinguishes between cooperation and coordination. The paper shows that the former has received more attention that the latter, and shows how both are important in the context of interorganizational collaboration.

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  • Jones, Candace, William S. Hesterly, and Stephan P. Borgatti. “A General Theory of Network Governance: Exchange Conditions and Social Mechanisms.” Academy of Management Review 22.4 (1997): 911–945.

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    An influential account of the conditions under which network governance has comparative advantage over integrated organizational forms and thus will emerge and thrive. Draws on transaction theory and social network theory. Available online for purchase or by subscription.

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  • Kilduff, Martin, and Andrew V. Shipilov. “Introduction.” In Organizational Networks. Vol. 1. Edited by Martin Kilduff and Andrew Shipilov, xix. SAGE Library in Business and Management. Los Angeles: SAGE, 2011.

    DOI: 10.4135/9781446262788Save Citation »Export Citation »

    Introduction to a four-volume collection of influential contributions by the editors, who provide a nuanced review of the different streams of network research. Highlights the leading ideas and how they evolved, and organizes the main contributions. Excellent.

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  • McEvily, Bill, Giuseppe Soda, and Marco Tortoriello. “More Formally: Rediscovering the Missing Link between Formal Organization and Informal Social Structure.” Academy of Management Annals 8.1 (2014): 299–345.

    DOI: 10.1080/19416520.2014.885252Save Citation »Export Citation »

    Revisits the distinction between formal structure within organizations and informal interaction patterns. The paper shows how use of the network approach could reinvigorate this important phenomenon.

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  • Miles, Raymond E., and Charles C. Snow. “Causes of Failure in Network Organizations.” California Management Review 34.4 (1992): 53–72.

    DOI: 10.2307/41166703Save Citation »Export Citation »

    Discusses and analyzes the trend away from large, vertically integrated organizations in favor of various forms of network organizations. Perspective is that of the focal organization. Captures one of the broad shifts in organizational design that began in the late 1980s. Available online by subscription.

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  • Powell, Walter W. “Neither Market nor Hierarchy: Network Forms of Organizations.” In Research in Organizational Behavior. Vol. 12. Edited by Barry M. Staw and Larry L. Cummings, 295–336. Greenwich, CT: Elsevier JAI, 1990.

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    Makes the case that networks constitute a new organizational form that warrants further theorizing and empirical attention.

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  • Uzzi, Brian. “Social Structure and Competition in Interfirm Networks: The Paradox of Embeddedness.” Administrative Science Quarterly 42.1 (1997): 35–67.

    DOI: 10.2307/2393808Save Citation »Export Citation »

    Definitive analysis of the collective opportunities and competitive benefits arising from an appropriate balance between strong and weak ties in the fashion industry. Available online by subscription.

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Critical Theory

Critical theory is more commonly found in Europe and Australia than in North America, although it is incorporated into US labor studies (see Adler 2007). Critical theory essentially questions the assumption of most organizational scholarship that organizations and managers are benign in their aspirations and purposes (see Willmott 1993, Fournier and Grey 2000). Theorists using this perspective probe the underlying assumptions of managerialism (e.g., Adler, et al. 2007) and seek to expose the power relations in organizations and society (e.g., Foucault 2007). Existing organizational forms are regarded as systems of domination. An early contributor was J. Kenneth Benson (see Benson 1977), who suggested that a dialectical approach to organizations is appropriate on the basis of interests, values, and power. The theory confronts and highlights social injustices (e.g., gender inequalities) and the environmental destructiveness of capitalist systems and explores noncapitalist ways of organizing work. The theory has several disparate strands (Alvesson and Deetz 2006). Essentially, it points out that organizations should be treated as instruments of political exploitation. Perrow 2002, for example, sees the large, modern corporation as the creation of elite interests that use it to preserve and enhance positions of privilege. Critical theory is inspired by Karl Marx, not, as are most organization theories, by Max Weber, and the perspective of critical theory reinterprets much organization theory. Critical theory reexamines networks as mechanisms whereby class interests are nurtured and sustained. It treats institutional prescriptions that are taken for granted as hegemonies of ideas serving particular interests (e.g., Cooper, et al. 2008). Similarly, it regards organizational forms as socially constructed means of generating resources and controlling their (unequal) distribution. Critical theorists thus question whether organizational forms are in any sense a natural (functionalist) response to the exigencies of contextual influences, viewing these forms instead as political vehicles. A more modest version of critical theory points not to the hidden hand of elite, class interests but to the unequal distribution of benefits in organizations and the marginalization of certain interests (e.g., those of women, lower-level employees, minorities). The essential questions of critical theory are who controls organizations and who benefits.

  • Adler, Paul S. “The Future of Critical Management Studies: A Paleo-Marxist Critique of Labor Process Theory.” Organization Studies 28.9 (2007): 1313–1345.

    DOI: 10.1177/0170840607080743Save Citation »Export Citation »

    Discusses labor process theory and argues that the post-structuralist approach to it takes insufficient account of fundamental Marxist principles. Available online for purchase or by subscription.

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  • Adler, Paul S., Linda C. Forbes, and Hugh Willmott. “Critical Management Studies.” Academy of Management Annals 1.1 (2007): 119–179.

    DOI: 10.1080/078559808Save Citation »Export Citation »

    Definitive review of the ideas, motivation, and premises of critical theory. Available online for purchase or by subscription.

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  • Alvesson, Mats, and Stanley Deetz. “Critical Theory and Postmodernism Approaches to Organizational Studies.” In The SAGE Handbook of Organization Studies. 2d ed. Edited by Stewart R. Clegg, Cynthia Hardy, Thomas B. Lawrence, and Walter R. Nord, 255–283. London: SAGE, 2006.

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    Examines the common themes of critical theory and postmodern theory, especially their foregrounding of issues of power. However, the article is more concerned with highlighting differences between the theories.

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  • Benson, J. Kenneth. “Organizations: A Dialectical View.” Administrative Science Quarterly 22.1 (1977): 1–21.

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    Organizations are conceptualized as beset by contradictions that arise from the interests and beliefs of organizational members, with an organization’s impact dependent on its power to dominate organizational arrangements. There are four basic principles to the dialectical view: social construction, totality, contradiction, and praxis. Available online by subscription.

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  • Cooper, David J., Mahmoud Ezzamel, and Hugh Willmott. “Examining ‘Institutionalization’: A Critical Theoretic Perspective.” In The SAGE Handbook of Organizational Institutionalism. Edited by Royston Greenwood, Christine Oliver, Kerstin Sahlin, and Roy Suddaby, 673–701. Los Angeles: SAGE, 2008.

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    An interesting and provocative analysis of institutional theory from the perspective of critical theory. Contends that the two perspectives are incompatible.

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  • Foucault, Michel. “The Means of Correct Training.” In Organization Theory: Selected Classic Readings. 5th ed. Edited by Derek S. Pugh, 561–576. London: Penguin, 2007.

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    Originally published in 1971 in Derek S. Pugh, ed., Organization Theory: Selected Readings (Harmondsworth, UK: Penguin). A taste of Foucault’s probing style and approach. This extract shows how disciplinary processes in armies and prisons were generalized to other types of organizations.

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  • Fournier, Valerie, and Chris Grey. “At the Critical Moment: Conditions and Prospects for Critical Management Studies.” Human Relations 53.1 (2000): 7–32.

    DOI: 10.1177/0018726700531002Save Citation »Export Citation »

    Provides a definition of critical management studies. The authors highlight that this tradition involves denaturalization (i.e., challenging the existing order of things), nonperformativity (i.e., the search for understanding should not solely be to advance efficiency), and reflexivity (i.e., recognition of the roles of managers, the media, and so on in producing accounts of managerial performance). Available online for purchase or by subscription.

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  • Perrow, Charles. Organizing America: Wealth, Power, and the Origins of Corporate Capitalism. Princeton, NJ: Princeton University Press, 2002.

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    A history of the emergence of large US corporations in the 19th century that traces how their evolution differed from that of counterparts in Europe because of the removal of regulatory constraints. Claims that the driving force in US history has been the large corporation, to the benefit of those whose interests are aligned with it.

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  • Willmott, Hugh. “Strength Is Ignorance, Slavery Is Freedom: Managing Culture in Modern Organizations.” Journal of Management Studies 30.4 (1993): 515–552.

    DOI: 10.1111/j.1467-6486.1993.tb00315.xSave Citation »Export Citation »

    Critically analyzes the literature on organizational and corporate culture. The article pulls out the subjugating implications of the quality movement. Available online for purchase or by subscription.

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Identity Theory

An organization’s identity is composed of the shared beliefs held by organizational members as to the fundamental nature of the organization. Organizational identities influence how organizations make sense of and respond to opportunities and threats arising from their contexts. Albert and Whetten 1985 initially defined organizational identity as the central, enduring, and distinctive beliefs that differentiate the organization from other organizations, yet in the early 21st century there are ongoing debates about the extent to which organizational identities are enduring or can change (and be managed) (an overview of this central debate is provided in Gioia, et al. 2013). Two perspectives permeate this debate. The first emphasizes an organization’s identity as a claim-making process (Glynn 2008) and something relatively static and argues for the durability and distinctiveness of organizational identity. The second emphasizes identity as a sense-making process. This perspective accounts for the necessity for identity to be malleable and adaptive under conditions of change (Gioia, et al. 2000). These perspectives have been referred to as the social actor and the social constructionist perspectives (Corley, et al. 2006). Proponents of the first perspective view organizational identity as a feature or property of the organization as a social actor (Corley, et al. 2006), whereas scholars following the second perspective stress organizational members’ and leaders’ renegotiation and reinterpretation of what their organization stands for (Corley and Gioia 2004, Ravasi and Schultz 2006), thereby minimizing the importance of endurance as a constitutive characteristic of organizational identity (Ravasi and Schultz 2006). A second stream in the literature speaks to the challenge of managing multiple organizational identities and the place of collective identities (banks, universities). Studies suggest that identity plurality in organizations is likely to generate not only tension but also intractable identity conflicts among members who hold conflicting views about what the organization stands for—hence the need to manage this plurality. Although this literature has mainly examined how organizations handle multiplicity of identities, new insights highlight the likely importance of the pluralistic institutional environment, ascribing collective identities on organizations (e.g., Glynn 2008, Pratt and Foreman 2000).

  • Albert, Stuart, and David A. Whetten. “Organizational Identity.” In Research in Organizational Behavior. Vol. 7. Edited by Larry L. Cummings and Barry M. Staw, 263–295. Greenwich, CT: Elsevier JAI, 1985.

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    Here is where it all started. This paper defines organizational identity as that which meets three criteria—“claimed central identity, claimed distinctiveness, and claimed temporal continuity” (p. 265)—a definition that has been challenged, in particular its emphasis on the enduring nature of identity.

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  • Corley, Kevin G., and Dennis A. Gioia. “Identity Ambiguity and Change in the Wake of a Corporate Spin-Off.” Administrative Science Quarterly 49.2 (2004): 173–208.

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    An examination of a spin-off from a Fortune 100 company and how the new entity developed a new organizational identity. Looks at the processes that enable identity formation and change. Available online for purchase or by subscription.

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  • Corley, Kevin G., Celia V. Harquail, Michael G. Pratt, Mary Ann Glynn, C. Marlene Fiol, and Mary Jo Hatch. “Guiding Organizational Identity through Aged Adolescence.” Journal of Management Inquiry 15.2 (2006): 85–99.

    DOI: 10.1177/1056492605285930Save Citation »Export Citation »

    Not a review but a reflection on two decades of research on organizational identity. The authors argue for a pluralism of approaches. Three questions are in the foreground: (1) What embraces and defines the literature to date? (2) Is organizational identity real? (3) How should identity be conceptualized? Available online for purchase or by subscription.

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  • Gioia, Dennis A., Shubha D. Patvardhan, Aimee L. Hamilton, and Kevin G. Corley. “Organizational Identity Formation and Change.” Academy of Management Annals 7.1 (2013): 123–193.

    DOI: 10.1080/19416520.2013.762225Save Citation »Export Citation »

    A comprehensive review of the literature on organizational identity, giving special attention to the debate over whether and how far identities are stable over time. Gives attention to the smaller body of work on identity formation. Concludes by discussing four prevalent views: social construction, social actors, institutionalist, and population ecologist.

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  • Gioia, Dennis A., Majken Schultz, and Kevin G. Corley. “Organizational Identity, Image, and Adaptive Instability.” Academy of Management Review 25.1 (2000): 63–81.

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    Challenges the idea that organizational identity is necessarily enduring. The authors propose that the concept is better conceptualized as more fluid and unstable than originally portrayed in the literature. Available online for purchase or by subscription.

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  • Glynn, Mary Ann. “Beyond Constraint: How Institutions Enable Identities.” In The SAGE Handbook of Organizational Institutionalism. Edited by Royston Greenwood, Christine Oliver, Kerstin Sahlin, and Roy Suddaby, 413–430. Los Angeles: SAGE, 2008.

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    This paper reviews thirty-two organizational identity studies in the management literature, notes the small number that have an institutional dimension, and sets out the advantages of better integrating institutional and identity perspectives.

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  • Pratt, Michael G., and Peter O. Foreman. “Classifying Managerial Responses to Multiple Organizational Identities.” Academy of Management Review 25.1 (2000): 18–42.

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    Organizations may have multiple identities. This paper puts forward four major types of managerial strategies for handling multiple identities—compartmentalization, deletion, integration, and aggregation—and makes suggestions concerning the circumstances that affect and define their appropriateness. Available online for purchase or by subscription.

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  • Ravasi, Davide, and Majken Schultz. “Responding to Organizational Identity Threats: Exploring the Role of Organizational Culture.” Academy of Management Journal 49.3 (2006): 433–458.

    DOI: 10.5465/AMJ.2006.21794663Save Citation »Export Citation »

    Longitudinal study of environmental changes that push members to rethink their organization’s identity. Highlights the role of organizational culture in providing cues supporting Sensemaking and sense giving by leaders. Available online for purchase or by subscription.

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Managerial and Organizational Cognition

Organizational and managerial cognition is concerned with how organization members model reality and how such models influence behavior, especially decision processes. Two images often characterize decision processes in organization theory (Lant 2002, Kaplan 2011). One, explicit in structural contingency theory and early versions of the behavioral theory of the firm, is that of the organization as essentially a complex information-processing system: decision making is computational. The second image, running through organizational cognition work since the 1980s, is that of the decision process as interpretative: decision processes involve Sensemaking and the social construction of meaning. The shift here is from seeing the problem purely as one of information processing or conflict resolution to seeing it as one of understanding how managers socially construct their world. There is recognition that organizational processes are shaped by the mental maps and understandings of organizational actors who through their interactions reciprocally reinforce and crystallize those meaning systems. These cognitive filters not only shape the agenda of issues that receive attention but also frame how they are interpreted (Jackson and Dutton 1988) and how they are acted on (Dutton and Jackson 1987). Some work in this tradition has sought to connect the categorization of issues to contextual (usually organizational but also temporal) circumstances (Walsh 1995). Other work adopts a more macro stance and examines how markets are socially constructed and how conceptions of competitors and of appropriate ways of competing become crystallized into industry “recipes” or mindsets (e.g., Porac, et al. 1989). Most of this work denies the assumption of environments as “out there.” On the contrary, actions premised on reciprocated social constructions “enact” the assumed context (Weick 1979). There is an obvious affinity between cognition research and institutional theorizing of logics, which, it could be argued, are cognitive frames by another name. Both cognitive and institutional theorists have a strong interest in cognitive categories, and since the late 20th century much attention has been given to how categories arise, their effects on behavior, and (of special interest to institutional scholars) how they are enforced and change (e.g., Zuckerman 1999).

  • Dutton, Jane E., and Susan E. Jackson. “Categorizing Strategic Issues: Links to Organizational Action.” Academy of Management Review 12.1 (1987): 79–90.

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    Analyzes how managers interpret issues as threats or opportunities. Basic theme is that managers have a cognitive framework defining the characteristics of threats and opportunities. This general model explains how managers identify and classify issues, and it suggests that issue characteristics can vary according to how well they fit decision makers’ conceptions of threat and opportunity. Available online for purchase or by subscription.

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  • Jackson, Susan E., and Jane E. Dutton. “Discerning Threats and Opportunities.” Administrative Science Quarterly 33.3 (1988): 370–387.

    DOI: 10.2307/2392714Save Citation »Export Citation »

    Investigates the issue characteristics that managers associate with the concepts of threat and opportunity, and demonstrates that managers are more sensitive to those associated with threats than to those associated with opportunities. Available online by subscription.

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  • Kaplan, Sarah. “Research in Cognition and Strategy: Reflections on Two Decades of Progress and a Look to the Future.” Journal of Management Studies 48.3 (2011): 665–695.

    DOI: 10.1111/j.1467-6486.2010.00983.xSave Citation »Export Citation »

    Review of cognition studies in strategic management research. Takes Porac, et al. 1989 as its starting point and traces the evolution of three sets of studies: those that establish that mental models exist, those that ascertain the accuracy of managers’ cognitive frames, and those that connect cognition to outcomes.

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  • Lant, Theresa K. “Organizational Cognition and Interpretation.” In The Blackwell Companion to Organizations. Edited by Joel A. C. Baum, 344–362. Oxford: Blackwell, 2002.

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    A useful overview of the cognition literature, focused on two questions: (1) How do organizations obtain information about their environment and its prior performance? (2) How do organizations use this information? Analyzes studies that portray organizations as information-processing entities and those that see them as enactors of their environments.

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  • Porac, Joseph F., Howard Thomas, and Charles Baden-Fuller. “Competitive Groups as Cognitive Communities: The Case of Scottish Knitwear Manufacturers.” Journal of Management Studies 26.4 (1989): 397–416.

    DOI: 10.1111/j.1467-6486.1989.tb00736.xSave Citation »Export Citation »

    At the time, Michael E. Porter’s industry analysis framework dominated thinking on strategy, but there was a growing interest in strategic groups of competitive firms. This paper broke rank by showing that rivalry is a cognitive construction, not something determined by more-objective factors. The environments in which managers compete and how they compete are framed by shared mental models.

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  • Walsh, James P. “Managerial and Organizational Cognition: Notes from a Trip down Memory Lane.” Organization Science 6.3 (1995): 280–321.

    DOI: 10.1287/orsc.6.3.280Save Citation »Export Citation »

    Reviews empirical and theoretical work up to 1995. Analyzes it by level (individual, group, organization, industry) and by three broad themes: structures of information representation, their development, and their outcomes. The paper concludes that the existence of cognitive structures is clearly established, and calls for research to be redirected toward understanding their outcomes and consequences. Available online for purchase or by subscription.

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  • Weick, Karl E. The Social Psychology of Organizing. 2d ed. Topics in Social Psychology. New York: McGraw-Hill, 1979.

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    One of the most influential texts in organization theory. The text introduces a range of new ways of thinking about organizations—or organizing, as the author insists. These include the concept of enactment, the suggestion that the purpose of organizing is to reduce equivocality, the idea that Sensemaking is a retrospective process, and the distinction between organizing and organization.

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  • Zuckerman, Ezra W. “The Categorical Imperative: Securities Analysts and the Illegitimacy Discount.” American Journal of Sociology 104.5 (1999): 1398–1438.

    DOI: 10.1086/210178Save Citation »Export Citation »

    Demonstrates that organizations poorly aligned with cognitive categories of securities analysts receive less attention because of their confusing identity and experience stock price discounts. Zuckerman terms this effect the categorical imperative. Has inspired efforts to understand how categories emerge, their consequences, and how they change. Available online for purchase or by subscription.

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Sensemaking

Studies on sense making focus on how actors within and across organizations make sense of events and issues that are ambiguous and surprising (e.g., Weick 1995). Sensemaking is about socially constructed plausible and coherent narratives or accounts (Abolofia 2010) associated with collective action. These accounts, it has been proposed, may be retrospective (i.e., follow action) and (although this is contested in the literature) prospective, and the processes involved are both cognitive and social (Maitlis 2005, Maitlis and Sonenshein 2010). In organizational settings, Sensemaking involves actors from a variety of positions, although senior managers have received emphasis in the research. Studies have sought to show how they make sense of issues and their role in “sense giving” (i.e., attempting to influence the Sensemaking of others), especially during circumstances of change (e.g., Gioia and Thomas 1996). Sense giving may also be directed toward audiences outside the organization on which the organization is dependent for its reputation and for social endorsement (Abolofia 2010). The role of actors in lower-level organizational positions has also been explored, notably in “issue selling” to senior levels or in simply making sense of unfolding events (e.g., Dutton and Ashford 1993, Balogun and Johnson 2005). Of particular interest have been sense-making processes during extreme conditions under which existing interpretative frames collapse (see, e.g., Weick 1993). Studies of Sensemaking often draw on identity theory (e.g., Pratt 2000), and there have been attempts to link it with institutional theory (e.g., Weber and Glynn 2006). A review of these approaches and analysis is found in Maitlis and Christianson 2014.

  • Abolofia, Mitchell Y. “Narrative Construction as Sensemaking: How a Central Bank Thinks.” Organization Studies 31.3 (2010): 349–367.

    DOI: 10.1177/0170840609357380Save Citation »Export Citation »

    Interesting analysis of a meeting of the US Federal Reserve as it sought to understand economic data that were not unfolding as initially expected and that could not obviously be explained by the current “dominant perceptual filter.” The author outlines how a narrative that explained the data unfolded. Available online for purchase or by subscription.

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  • Balogun, Julia, and Gerry Johnson. “From Intended Strategies to Unintended Outcomes: The Impact of Change Recipient Sensemaking.” Organization Studies 26.11 (2005): 1573–1601.

    DOI: 10.1177/0170840605054624Save Citation »Export Citation »

    This article focuses on the social processes of interaction between middle managers as change recipients as they try to make sense of change interventions. The article demonstrates how lateral, informal processes of interrecipient Sensemaking contribute to intended and unintended change outcomes and thus to the unpredictable, emergent nature of strategic change. Available online for purchase or by subscription.

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  • Dutton, Jane E., and Susan J. Ashford. “Selling Issues to Top Management.” Academy of Management Review 18.3 (1993): 397–428.

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    Given that the time and attention of senior managers in an organization are limited resources, understanding how issues arise on their attention agenda is important. This article analyzes the very earliest stage in which that occurs; that is, how issues become issues. Available online for purchase or by subscription.

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  • Gioia, Dennis A., and James B. Thomas. “Identity, Image, and Issue Interpretation: Sensemaking during Strategic Change in Academia.” Administrative Science Quarterly 41.3 (1996): 370–403.

    DOI: 10.2307/2393936Save Citation »Export Citation »

    Examines how top management teams in higher education made sense of pressures for change. The authors show that image and identity are key to how members make sense of pressures for change; however, instead of classifying them as “threats” or “opportunities,” organizations respond according to whether pressures are seen as “strategic” or “political.” Available online by subscription.

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  • Maitlis, Sally. “The Social Processes of Sensemaking.” Academy of Management Journal 48.1 (2005): 21–49.

    DOI: 10.5465/AMJ.2005.15993111Save Citation »Export Citation »

    This article highlights the importance of social as well as cognitive processes in organizational Sensemaking. Attempts by organizational leaders to provide sense giving are given special notice. Available online for purchase or by subscription.

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  • Maitlis, Sally, and Marlys Christianson. “Sensemaking in Organizations: Taking Stock and Moving Forward.” Academy of Management Annals 8.1 (2014): 57–125.

    DOI: 10.1080/19416520.2014.873177Save Citation »Export Citation »

    Research into sense making has significantly expanded since the turn of the 21st century, and this paper provides a historical overview before focusing on two key themes: how sense making is accomplished, and how sense making affects processes of organizational change, learning on creativity, and innovation.

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  • Maitlis, Sally, and Scott B. Sonenshein. “Sensemaking in Crisis and Change: Inspiration and Insights from (Weick 1988).” Journal of Management Studies 47.3 (2010): 551–580.

    DOI: 10.1111/j.1467-6486.2010.00908.xSave Citation »Export Citation »

    A review of Karl E. Weick’s work and how it speaks to and informs understanding of Sensemaking during circumstances of change and crisis. Also contains a review of the relevant literature and offers suggestions for future directions.

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  • Pratt, Michael G. “The Good, the Bad, and the Ambivalent: Managing Identification among Amway Distributors.” Administrative Science Quarterly 45.3 (2000): 456–493.

    DOI: 10.2307/2667106Save Citation »Export Citation »

    This article connects Sensemaking to culture and organizational identity through a case study of Amway. The article looks at how leadership uses “sense-breaking” and sense-making practices to achieve members’ identification with Amway. Available online for purchase or by subscription.

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  • Weber, Klaus, and Mary Ann Glynn. “Making Sense with Institutions: Context, Thought, and Action in Karl Weick’s Theory.” Organization Studies 27.11 (2006): 1639–1660.

    DOI: 10.1177/0170840606068343Save Citation »Export Citation »

    Proposes that there has been an unfortunate neglect of social and historical contexts in Sensemaking. The article suggests three mechanisms—priming, editing, and triggering—and evolves the institutional context in Sensemaking beyond the idea of internalized logics. Available online for purchase or by subscription.

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  • Weick, Karl E. “The Collapse of Sensemaking in Organizations: The Mann Gulch Disaster.” Administrative Science Quarterly 38.4 (1993): 628–652.

    DOI: 10.2307/2393339Save Citation »Export Citation »

    Important case study that illustrates Weick’s approach to Sensemaking. Shows not only the criticality of sense-making structures but also their fragility under conditions of urgency and turbulence. Available online by subscription.

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  • Weick, Karl E. Sensemaking in Organizations. Foundations for Organizational Science. Thousand Oaks, CA: SAGE, 1995.

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    The study of Sensemaking is synonymous with Karl E. Weick, whose empirical studies are foundational papers. This book is an accessible overview of his ideas.

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Stakeholder Theory

Stakeholder theory (Freeman 1984, Donaldson and Preston 1995), which is complementary to stewardship theory (Hernandez 2012), posits that organizations should be attentive not solely to the interests of shareholders (as famously declared by Milton Friedman) but also to a wide array of stakeholders who are affected by and who seek to influence the organization (see, e.g., Frooman 1999 and Mitchell, et al. 1997). Stakeholders considered in the literature include employees, unions, suppliers, consumers, geographic communities in which the organization operates, and society (Parmar, et al. 2010) such an array of interests, stakeholder theory does not propose that all interests should be treated equally. The theory not only is descriptive and analytic. However, the theory does not ask the (to which stakeholder management is attentive, why, and with what consequences) but also has a strong normative dimension. Proponents of stakeholder theory as indicated in Laplume, et al. 2008, readily assert that the theory brings together ethics and capitalism. It has also been shown that attending to the interests of a range of stakeholders can have positive effects on performance (see, e.g., Margolis and Walsh 2003, Hillman and Keim 2001). Arguably, this theory is assertively challenging US forms of capitalism, in which shareholder value is more dominant than in other capitalist nations (e.g., Germany).

  • Donaldson, Thomas, and Lee E. Preston. “The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications.” Academy of Management Review 20.1 (1995): 65–91.

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    Useful restatement of the theory and approach. Available online for purchase or by subscription.

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  • Freeman, R. Edward. Strategic Management: A Stakeholder Approach. Pitman Series in Business and Public Policy. Boston: Pitman, 1984.

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    The text that started it all, by the author most associated with it.

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  • Frooman, Jeff. “Stakeholder Influence Strategies.” Academy of Management Review 24.2 (1999): 191–205.

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    Analyzes the kinds of strategies available to stakeholders—withholding, usage, direct, and indirect—and how and why stakeholders might use one or more of them. Heavily influenced by resource dependence theory. Available online for purchase or by subscription.

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  • Hernandez, Morela. “Toward an Understanding of the Psychology of Stewardship.” Academy of Management Review 37.2 (2012): 172–193.

    DOI: 10.5465/amr.2010.0363Save Citation »Export Citation »

    An exploration of the assumptions of stewardship theory and of its antecedents. Suggests how feedback loop processes can shift organizational governance away from agency to stewardship. Available online for purchase or by subscription.

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  • Hillman, Amy J., and Gerald D. Keim. “Shareholder Value, Stakeholder Management, and Social Issues: What’s the Bottom Line?” Strategic Management Journal 22.2 (2001): 125–139.

    DOI: 10.1002/1097-0266(200101)22:2%3C125::AID-SMJ150%3E3.0.CO;2-HSave Citation »Export Citation »

    Finds that being attentive to multiple stakeholder interests improved shareholder value in Standard and Poor’s 500 firms. Should be read alongside Margolis and Walsh 2003. Available online for purchase or by subscription.

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  • Laplume, André O., Karan Sonpar, and Reginald A. Litz. “Stakeholder Theory: Reviewing a Theory That Moves Us.” Journal of Management 34.6 (2008): 1152–1189.

    DOI: 10.1177/0149206308324322Save Citation »Export Citation »

    Reviews the literature on stakeholder theory around five themes: (1) definitions and salience of stakeholders, (2) stakeholders’ actions and responses, (3) firms’ actions and responses, (4) firm performance, and (5) theory debates.

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  • Margolis, Joshua D., and James P. Walsh. “Misery Loves Companies: Rethinking Social Initiatives by Business.” Administrative Science Quarterly 48.2 (2003): 268–305.

    DOI: 10.2307/3556659Save Citation »Export Citation »

    A review of 127 studies that finds a modestly positive association between socially responsible actions by corporations and their financial performance. Discusses the multiple difficulties in defining “socially responsible.” Available online for purchase or by subscription.

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  • Mitchell, Ronald K., Bradley R. Agle, and Donna J. Wood. “Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What Really Counts.” Academy of Management Review 22.4 (1997): 853–886.

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    An alternative framework to Jeff Frooman’s typology of stakeholder strategies (Frooman 1999). Proposes power legitimacy and urgency. These are combined to produce a set of propositions about the salience of stakeholders to corporate managers. Available online for purchase or by subscription.

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  • Parmar, Bidhan L., R. Edward Freeman, Jeffrey S. Harrison, Andrew C. Wicks, Lauren Purnell, and Simone de Colle. “Stakeholder Theory: The State of the Art.” Academy of Management Annals 4.1 (2010): 403–446.

    DOI: 10.1080/19416520.2010.495581Save Citation »Export Citation »

    Wide-ranging summary of the theory and how it has been applied in several disciplines and areas, ranging from business ethics to strategic management, to finance, to accounting, and to management. Available online for purchase or by subscription.

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Imprinting

Imprinting is the idea that current organizational states are a reflection of historical experiences of that organization. Even though the environments and circumstances in which organizations operate change over time, initial characteristics persist, even for decades (Stinchcombe 1965). Its origins are in biology. The idea of imprinting has been used at multiple levels of analysis (e.g., industries, individual organizations, individual performance, and communities of organizations). Imprinting is not just that history matters. There are three important aspects that distinguish it from more-general ideas of historical influences, such as path dependence (Mahoney 2000)—namely, that there are particularly sensitive periods of transitions, usually of short duration; during that sensitive period, that elements of the environment become reflected in an organization; and that these elements persist over long periods in spite of other change (Marquis and Tilcsik 2013). The central idea of imprinting, that effects persist over long periods of time in organizations, has also been addressed as institutional legacies (Greve and Rao 2014).

  • Greve, Henrich R., and Hayagreeva Rao. “History and the Present: Institutional Legacies in Communities of Organizations.” Research in Organizational Behavior 34 (2014): 27–41.

    DOI: 10.1016/j.riob.2014.09.002Save Citation »Export Citation »

    Institutions are all about persistence and so leave legacies, especially at the community level. Such legacies are a variant and extension of the idea of imprinting. Interestingly, this approach to persistence has been neglected in institutional theory. The primary carriers of these legacies are legal structures, voluntary organizations, and intracommunity relations.

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  • Mahoney, James. “Path Dependence in Historical Sociology.” Theory and Society 29.4 (2000): 507–548.

    DOI: 10.1023/A:1007113830879Save Citation »Export Citation »

    A seminal work on path dependence, setting out the idea that there are historical sequences where events produce patterns or chains of events that are deterministic in their effects. Thus, it is necessary to show how a particular outcome can be traced back to a particular set of historical events. There are self-reinforcing sequences with long-term reproduction, and reactive sequences with clearly dependent steps.

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  • Marquis, Christopher. “The Pressure of the Past: Network Imprinting in Intercorporate Communities.” Administrative Science Quarterly 48.4 (2003): 655–689.

    DOI: 10.2307/3556640Save Citation »Export Citation »

    Through the study of community-based intercorporate networks, this paper shows the persistence of social forms. Social mechanisms that produce such imprinting are outlined.

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  • Marquis, Christopher, and András Tilcsik. “Imprinting: Toward a Multilevel Theory.” Academy of Management Annals 7.1 (2013): 195–245.

    DOI: 10.1080/19416520.2013.766076Save Citation »Export Citation »

    A framework is presented with a view to unifying the field of imprinting research, bringing together different levels of analysis. Those levels of analysis in the splintered field of imprinting research are organizational collectives, single organizations, organizational building blocks, and individuals. Key mechanisms, consequences, and contingencies of imprinting are developed that bring together the levels of analysis.

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  • Simsek, Zeki, Brian Curtis Fox, and Ciaran Heavey. “‘What’s Past Is Prologue’: A Framework, Review, and Future Directions for Organizational Research on Imprinting.” Journal of Management 41.1 (2015): 288–317.

    DOI: 10.1177/0149206314553276Save Citation »Export Citation »

    A review of what we know about imprinting, from diverse topics. From that review, a framework is developed that clarifies the domain to which the concept of imprinting applies, and the various levels of analysis on which it can be brought to bear. Distinctions are made among imprinters, imprinted, imprinting, imprint dynamics, and impact of imprints.

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  • Stinchcombe, Arthur L. “Social Structure and Organizations.” In Handbook of Organizations. Edited by James G. March, 142–193. Rand McNally Sociology. Chicago: Rand McNally, 1965.

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    This is the classic article on imprinting (and liability of newness). It introduced the topic to organization theory, although it is only a small part of the piece.

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Central Topics and Concerns

Organization theories are perspectives that provide understanding of organizational issues and topics. Since the 1960s, as organization theory has evolved, the relative importance of particular issues and topics has shifted. Organizational design was an early focus of attention but is less so in the early 21st century, although it retains its importance. The study of corruption, in contrast, is a more recent focus of attention. Different theories offer different insights into the various issues, and it is when theories are taken together that insights are amplified.

Organization Environments

The relationship between organizations and their environment is a central theme running through organization theory (Scott and Davis 2007). Unlike economic depictions of these relationships as essentially calculative, organization theorists emphasize their social embeddedness (see, e.g., Granovetter 1985). Structural contingency and institutional theories examine how the environment shapes appropriate organizational structures, whereas resource dependency theory analyzes how organizations seek to control their environment. The environment has been defined in many ways. In its simplest form the environment is anything beyond the boundaries of the organization, but organization theorists tend to focus on those parts with which the organization interacts or that have the potential to affect it, referred to in early theories as the task environment (see, e.g., Dess and Beard 1984, Duncan 1972). Typically, the task environment is taken to mean the industry, sources of raw materials, competitors, and consumers. Institutional theory, in contrast, emphasizes the sociocultural environment and the role of institutional logics (see, e.g., Rao, et al. 2003). Institutional theory also tends to focus on the relationship between the organization and the organizational field. For some theories, the environment is made up of interorganizational relations (e.g., resource dependence theory), or the pattern of ties with other organizations (e.g., network theory; for an early example, see Hirsch 1972), or both. Important aspects of the environment include its complexity (the parts) and especially its uncertainty and dynamism. The extent of uncertainty and dynamism affects the relevance of different organizational forms. An important interest of later research explores the significance of geographic proximity and the role of “industrial districts” (e.g., Saxenian 1994). A fundamentally different approach to environment stresses the impact of organizations on the material world, noting in particular the problem of environmental despoliation (Bansal and Hoffman 2012).

  • Bansal, Pratima, and Andrew J. Hoffman, eds. The Oxford Handbook of Business and the Natural Environment. Oxford: Oxford University Press, 2012.

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    A collection of important papers that address the interaction of organizations and their material environment and that explore through various theoretical lenses how organizations can be more attentive to their social responsibilities.

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  • Dess, Gregory G., and Donald W. Beard. “Dimensions of Organizational Task Environments.” Administrative Science Quarterly 29.1 (1984): 52–73.

    DOI: 10.2307/2393080Save Citation »Export Citation »

    An early attempt to identify aspects of organizational environments that affect organization structure. Heavily functional in its approach. Gives particular attention to uncertainty. Available online by subscription.

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  • Duncan, Robert B. “Characteristics of Organizational Environments and Perceived Environmental Uncertainty.” Administrative Science Quarterly 17.3 (1972): 313–327.

    DOI: 10.2307/2392145Save Citation »Export Citation »

    An early text that focuses on the task environment and the importance of environmental uncertainty for organizational design. Available online by subscription.

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  • Granovetter, Mark. “Economic Action and Social Structure: The Problem of Embeddedness.” American Journal of Sociology 91.3 (1985): 481–510.

    DOI: 10.1086/228311Save Citation »Export Citation »

    Classic article that stresses the embeddedness of organizations in their social and cultural contexts. Available online by subscription.

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  • Hirsch, Paul M. “Processing Fads and Fashions: An Organization-Set Analysis of Cultural Industry Systems.” American Journal of Sociology 77.4 (1972): 639–659.

    DOI: 10.1086/225192Save Citation »Export Citation »

    An early and interesting analysis of the role and importance of “organization sets” (a precursor term for networks) for the successful or unsuccessful diffusion of innovations in cultural industries. Available online by subscription.

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  • Rao, Hayagreeva, Phillipe Monin, and Rodolphe Durand. “Institutional Change in Toque Ville: Nouvelle Cuisine as an Identity Movement in French Gastronomy.” American Journal of Sociology 108.4 (2003): 795–843.

    DOI: 10.1086/367917Save Citation »Export Citation »

    Illustrates the institutionalists’ emphasis on sociocultural forces and how they can lead to the emergence of new organizational forms. Provides a useful contrast to the more typical emphasis on the task environment, in which economic and material aspects are foregrounded. Available online by subscription.

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  • Saxenian, AnnaLee. Regional Advantage: Culture and Competition in Silicon Valley and Route 128. Cambridge, MA: Harvard University Press, 1994.

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    Early and highly readable account of two industrial districts. Highlights the importance of geographic proximity for industry-level innovation and vibrancy. Contrasts two districts and explains why one succeeded and the other did not.

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  • Scott, W. Richard, and Gerald F. Davis. “Networks in and around Organizations.” In Organizations and Organizing: Rational, Natural, and Open System Perspectives. By W. Richard Scott and Gerald F. Davis, 278–309. Upper Saddle River, NJ: Pearson Prentice Hall, 2007.

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    Excellent chapter that reviews the network approach to understanding the environments of organizations—the distinctive vocabulary of network thinking, the different types of networks, and how networks can be analyzed at different levels of analysis.

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Interorganizational Relationships

Organizations deal with other organizations in multiple ways—as suppliers, competitors, partners, even regulators. Interorganizational relationships, however, typically are relatively enduring linkages between organizations that can take several forms; for example, alliances, joint ventures, consortia, and trade associations (Kogut 1988). Given their widespread prominence, it is not surprising that since the 1960s there has been an interest in understanding these relationships. Oliver 1990 brought order to the burgeoning literature by classifying the motivation for interorganizational ties and dividing them into six categories, each often associated with a particular theoretical perspective. Oliver also suggests which type of relationship (e.g., joint venture, association) is most likely to be associated with each motivation. In the 1990s a different, narrower focus on alliances and joint ventures dominated. Instead of asking why such arrangements develop, attention turned to understanding the choice of partners; that is, to why organizations develop ties to some organizations rather than others. The role of trust and status in minimizing opportunistic behavior has received considerable attention (e.g., Gulati 1995; Gulati and Gargiulo 1999; Podolny 1994; Zaheer, et al. 1998). So too has the efficacy of alternative governance arrangements (e.g., Oxley and Sampson 2004). Research has examined the outcomes of interorganizational ties, such as increased communication, social learning, and change (e.g., Kraatz 1998). The usual underpinning, or theoretical perspective, for analysis of interorganizational ties is a combination of network and agency and transaction cost economics (TCE) theory.

  • Gulati, Ranjay “Does Familiarity Breed Trust? The Implications of Repeated Ties for Contractual Choice in Alliances.” Academy of Management Journal 38.1 (1995): 85–112.

    DOI: 10.2307/256729Save Citation »Export Citation »

    Challenges the assumption in TCE theory that joint ventures and alliances will typically use equity-based governance arrangements. An important observation is the role of trust arising from repeated alliances between the same partners. Available online for purchase or by subscription.

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  • Gulati, Ranjay, and Martin Gargiulo. “Where Do Interorganizational Networks Come From?” American Journal of Sociology 104.5 (1999): 1439–1493.

    DOI: 10.1086/210179Save Citation »Export Citation »

    Addresses the question of how organizations decide with whom to cooperate. Emphasis is given to the network structure in which organizations are embedded and through which they are directly and indirectly linked. But networks have histories of prior alliances and behaviors and are continually evolving as new alliances are formed; the authors leave out these respective effects. Available online by subscription.

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  • Kogut, Bruce. “Joint Ventures: Theoretical and Empirical Perspectives.” Strategic Management Journal 9.4 (1988): 319–332.

    DOI: 10.1002/smj.4250090403Save Citation »Export Citation »

    Sets out to provide a theory of joint ventures; that is, to explain why a joint venture is chosen over other options, such as acquisitions, supply contracts, or licensing agreements. Clarifies and compares the explanations offered by TCE, competitive behavior, and organizational learning theory before reviewing extant empirical studies. Available online for purchase or by subscription.

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  • Kraatz, Matthew S. “Learning by Association? Interorganizational Networks and Adaptation to Environmental Change.” Academy of Management Journal 41.6 (1998): 621–643.

    DOI: 10.2307/256961Save Citation »Export Citation »

    Examines how the networks connecting community colleges mitigate environmental uncertainty and allow communication and learning. Also points out that colleges tend to draw from the experiences of similar colleges that are performing well rather than copying large, prestigious colleges. Available online for purchase or by subscription.

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  • Oliver, Christine. “Determinants of Interorganizational Relationships: Integration and Future Directions.” Academy of Management Review 15.2 (1990): 241–265.

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    A survey of the extensive literature up to 1990, arranged according to the reasons and conditions under which organizations establish enduring exchanges with one another and the forms these take. A useful aspect of this survey is the author’s explicit discussion of the theoretical perspectives underlying the six different motivations for establishing ties with other organizations. Available online for purchase or by subscription.

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  • Oxley, Joanne E., and Rachelle C. Sampson. “The Scope and Governance of International R and D Alliances.” In Special Issue: The Global Acquisition, Leverage, and Protection of Technological Competencies. Edited by Susan K. McEvily, Kathleen M. Eisenhardt, and John E. Prescott. Strategic Management Journal 25.8–9 (2004): 723–749.

    DOI: 10.1002/smj.391Save Citation »Export Citation »

    Illustrates the concern for understanding how firms choose an effective governance structure for their alliances to balance the benefits of knowledge exchange with the risks of unintended leakage of valuable technology. Empirical results suggest that successful alliances between competitive partners are carefully regulated in their scope. Available online for purchase or by subscription.

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  • Podolny, Joel M. “Market Uncertainty and the Social Character of Economic Exchange.” Administrative Science Quarterly 39.3 (1994): 458–483.

    DOI: 10.2307/2393299Save Citation »Export Citation »

    Looks at the criteria whereby organizations select alliance partners, especially under conditions of uncertainty. A study of investment banking relationships reveals that previous partners and those of similar status are preferred. Available online by subscription.

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  • Zaheer, Akbar, Bill McEvily, and Vincenzo Perrone. “Does Trust Matter? Exploring the Effects of Interorganizational and Interpersonal Trust on Performance.” Organization Science 9.2 (1998): 141–159.

    DOI: 10.1287/orsc.9.2.141Save Citation »Export Citation »

    Acknowledges that trust is an individual-level concept and that it should be cautiously extended to the level of organizational exchange. A study of buyer-supplier interfirm relationships in the electrical equipment–manufacturing industry shows that interpersonal and interorganizational trust are different constructs and play different roles in negotiation processes and exchange relationships. The link between trust and performance is underlined. Available online for purchase or by subscription.

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Organization Structure

Organization structure is the formal distribution of roles and responsibilities in an organization. Organization structure provides the framework for the discharge and coordination of tasks. Approaches to the study of structures have taken two primary directions. One direction, which underpins both structural contingency theory and configuration theory and which is exemplified by Pugh 1973 (cited under Structural Contingency Theory / Information-Processing Theory) and Pugh’s colleagues at the Aston Group, derives directly from Max Weber’s analysis of bureaucracy and conceptualizes structure in terms of an organization’s division of labor, the extent to which decisions are hierarchically centralized, the standardization of procedures, and the degree to which they are codified in written form. A second approach, used in Burton, et al. 2006, examines the overall structure of the organization, especially the basis for grouping roles and responsibilities, such as functional, divisional, and matrix structures, at the higher level. At the heart of all discussions of structure is the search for balance between the complementary processes, identified in Lawrence and Lorsch 1986, of differentiation (i.e., breaking the overall task into its constituent parts) and integration (i.e., putting the parts together again). More recent studies (reviewed in Okhuysen and Bechky 2009) have unpacked the extensive variety of integrative devices used in modern organizations.

  • Burton, Richard M., Gerardine DeSanctis, and Børge Obel. Organizational Design: A Step-by-Step Approach. 2d ed. Cambridge, UK: Cambridge University Press, 2006.

    DOI: 10.1017/CBO9780511812415Save Citation »Export Citation »

    An introductory text. Chapters 4 and 5 (pp. 57–105) provide straightforward summaries of the main structural configurations (e.g., functional, divisional). More extensive than most introductory texts.

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  • Lawrence, Paul R., and Jay W. Lorsch. Organization and Environment: Managing Differentiation and Integration. Rev. ed. Harvard Business School Classics. Boston: Harvard Business Press, 1986.

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    Originally published in 1967. An essential book for any organization theory bookshelf. Analyzes how departments in an organization face different levels of uncertainty in their task environments and thus require different organizational arrangements. The greater these differences, the more difficult it is to coordinate the departments and thus the need for more complex integrative structures. Rich analysis of the implications of complex environments for organizational design.

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  • Okhuysen, Gerardo A., and Beth A. Bechky. “Coordination in Organizations: An Integrative Perspective.” Academy of Management Annals 3.1 (2009): 463–502.

    DOI: 10.1080/19416520903047533Save Citation »Export Citation »

    Reviews how coordination has been treated in the literature and highlights the mechanisms whereby it is achieved. These mechanisms impact in organizations by creating three integrative conditions: accountability, predictability, and common understanding. Available online for purchase or by subscription.

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Organization Routines/Practices

The importance of understanding organizational routines was recognized early in organizational theory. The Behavioral Theory of the Firm showed how decision making is encoded in routines that are triggered by circumstance. Routines are thus important for organizational learning and the relative possibility of change (Parmigiani and Howard-Grenville 2011). More-recent work has sought to understand the circumstances under which routines change or endure (e.g., Feldman and Pentland 2003). A variation of this research redefines routines as “practices” (Vaara and Whittington 2012). Some studies treat practices, usually “strategy as practices,” as almost indistinguishable from routines (e.g., Jarzabkowski 2003), whereas others explicitly portray practices as manifestations of institutional logics (e.g., Smets, et al. 2012). A distinctive variant of practice theory is the application to technology in Orlikowski 2000.

  • Feldman, Martha S., and Brian T. Pentland. “Reconceptualizing Organizational Routines as a Source of Flexibility and Change.” Administrative Science Quarterly 48.1 (2003): 94–118.

    DOI: 10.2307/3556620Save Citation »Export Citation »

    Challenges the previously widely held view that routines create inertia in organizations. Distinguishes between a routine’s ostensive aspects (i.e., the structure) and its performative ones (i.e., the actions that bring the routine to life) to build a theory of change as well as stability. Available online for purchase or by subscription.

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  • Jarzabkowski, Paula. “Strategic Practices: An Activity Theory Perspective on Continuity and Change.” In Special Issue: Micro Strategy and Strategizing: Towards an Activity-Based View. Edited by Gerry Johnson, Leif Melin, and Richard Whittington. Journal of Management Studies 40.1 (2003): 23–55.

    DOI: 10.1111/1467-6486.t01-1-00003Save Citation »Export Citation »

    An early exposition of the practice perspective on understanding the continuity and change of strategy. Available online for purchase or by subscription.

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  • Orlikowski, Wanda J. “Using Technology and Constituting Structures: A Practice Lens for Studying Technology in Organizations.” Organization Science 11.4 (2000): 404–428.

    DOI: 10.1287/orsc.11.4.404.14600Save Citation »Export Citation »

    Challenges the idea that technologies are embodiments of social structures and meanings. Instead, the author shows that technologies are used in different ways depending on their institutional and organizational contexts and that, through use, structures and meanings are enacted. Available online for purchase or by subscription.

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  • Parmigiani, Anne, and Jennifer Howard-Grenville. “Routines Revisited: Exploring the Capabilities and Practice Perspectives.” Academy of Management Annals 5.1 (2011): 413–453.

    DOI: 10.1080/19416520.2011.589143Save Citation »Export Citation »

    Summarizes the treatment of routines by organizational economics and by those using the “lens of practice.” Identifies common themes and concludes that elements of each can be complementary for a more holistic understanding. Available online for purchase or by subscription.

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  • Smets, Michael, Tim Morris, and Royston Greenwood. “From Practice to Field: Multilevel Model of Practice-Driven Institutional Change.” Academy of Management Journal 55.4 (2012): 877–904.

    DOI: 10.5465/amj.2010.0013Save Citation »Export Citation »

    Shows what happens when professionals from very different jurisdictions are involved in the practice of a cross-border contract: a new practice emerges and leads to change at the level of the profession at large. A rare, multilevel empirical example of practice-driven institutional change. Available online for purchase or by subscription.

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  • Vaara, Eeero, and Richard Whittington. “Strategy-as-Practice: Taking Social Practices Seriously.” Academy of Management Annals 6.1 (2012): 285–336.

    DOI: 10.1080/19416520.2012.672039Save Citation »Export Citation »

    Reviews the expanding literature on strategy as practice and suggests its future theoretical development. The paper argues that this perspective explains how strategy is both enabled and constrained by organizational and social practices. Available online for purchase or by subscription.

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Organization Culture

Organization culture experienced an upsurge of interest in the 1970s. Studies have typically taken one of three approaches, although there have been attempts to combine them (Martin, et al. 2006; Martin 2002). One approach (integration) treats corporate culture as widely shared and thus amenable to managerial control (e.g., Ouchi 1981). A second approach (differentiation) portrays organizations as made up of differentiated subcultures based on occupational boundaries, or hierarchical status, or both (e.g., Alvesson 2002). A third approach (fragmentation) sees cultures as transient, ambiguous, and issue specific (e.g., Feldman 1989). All three approaches are challenged by critical theorists for their functionalist and promanagerial orientation (see, e.g., Willmott 1993). There has also been important work on organizational culture across societies (e.g., Hofstede 2001).

  • Alvesson, Mats. Understanding Organizational Culture. London: SAGE, 2002.

    DOI: 10.4135/9781446280072Save Citation »Export Citation »

    Clear statement of the multiplicity of subcultures typically found in complex organizations. Challenges the idea that organizations have a single overriding culture, and is critical of managerial orientation (i.e., managers treating cultures as tools for control).

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  • Feldman, Martha S. Order without Design: Information Production and Policy Making. Stanford, CA: Stanford University Press, 1989.

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    Early example of the fragmentation approach. This paper shows the ambiguities that reside in the different ways people interpret structural and symbolic aspects of organizational life. The idea of a clear and compelling corporate or occupational culture thus makes little sense.

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  • Hofstede, Geert. Culture’s Consequences: Comparing Values, Behaviors, Institutions, and Organizations across Nations. 2d ed. Thousand Oaks, CA: SAGE, 2001.

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    Maps cultural differences within organizations and between nations, by using a multidimensional classification of concepts such as power distance and individualism-collectivism.

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  • Martin, Joanne. Organizational Culture: Mapping the Terrain. Foundations for Organizational Science. Thousand Oaks, CA: SAGE, 2002.

    DOI: 10.4135/9781483328478Save Citation »Export Citation »

    A presentation of the integration, differentiation, and fragmentation views of culture as metaphors and lenses for viewing organizational life.

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  • Martin, Joanne, Peter J. Frost, and Olivia A. O’Neill. “Organizational Culture: Beyond Struggles for Intellectual Dominance.” In The SAGE Handbook of Organization Studies. 2d ed. Edited by Stewart R. Clegg, Cynthia Hardy, Thomas B. Lawrence, and Walter R. Nord, 725–753. London: SAGE, 2006.

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    Review of the cultural literature since its renaissance in the 1970s. Traces the antagonism among the three main approaches, comments on their empirical biases, and proposes directions for future theorizing.

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  • Ouchi, William G. Theory Z: How American Business Can Meet the Japanese Challenge. Reading, MA: Addison-Wesley, 1981.

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    A clear example of the integration approach to corporate culture and its treatment as a tool that managers can use to improve organizational performance.

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  • Willmott, Hugh. “Strength Is Ignorance, Slavery Is Freedom: Managing Culture in Modern Organizations.” Journal of Management Studies 30.4 (1993): 515–552.

    DOI: 10.1111/j.1467-6486.1993.tb00315.xSave Citation »Export Citation »

    Highly critical account of the managerial orientation of corporate culture. The pursuit of strong monocultures is interpreted as having “subjugating and totalitarian implications” (p. 515). Available online for purchase or by subscription.

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Organizational Design

Organizational design, or organizational “architecture” or “form” as it is sometimes labeled, is the aggregation of structures of accountability and responsibility used to develop and implement strategies, and the human resource practices and information and decision processes that activate those structures. The study of design is fundamental to organization theory because design concerns the mobilization of people and resources to accomplish desired ends collectively (Burton, et al. 2006). Yet, until the late 20th century the relative attention given to organizational design has been modest compared to previous decades. In the 1950s, 1960s, and 1970s, heavily influenced by Max Weber’s analysis of bureaucracy, issues of organization design (referred to as ‘structure’) dominated research. One stream, usually using the case study approach, empirically examined the functioning of bureaucracies (as in Gouldner 1954, an examination of processes of bureaucratization in a gypsum plant). A second stream led to the development both of structural contingency theory and configuration theory. Initially, emphasis was placed on the discovery of the range of organizational designs in use and their contingent applicability. Subsequently, the study of organizational design has evolved in several ways, from exploration of primarily integrated, self-contained designs to investigation of more-network-based arrangements (of which the “virtual” organization is an extreme variant); from examination of relatively enduring and stable organizations to study of temporary designs, such as “project” or modular designs; from depiction of organizations as relatively homogeneous entities to discovery of more-complex hybrid forms, such as the “ambidextrous” organization (e.g., Tushman and O’Reilly 1996) or those embracing two or more institutional logics (such as the social enterprises reviewed in Battilana and Lee 2014, cited under Hybrid Organizations); from relatively local to transnational firms (e.g., Bartlett and Ghoshal 2002); and from a focus on organizations in their sectors (e.g., schools, hospitals) to general treatment of organizations (Whetten 2009). Running through all these changes is the shift toward complexity. More-recent studies (reviewed in Okhuysen and Bechky 2009) have unpacked the extensive variety of integrative devices used in modern organizations.

  • Bartlett, Christopher A., and Sumantra Ghoshal. Managing across Borders: The Transitional Solution. 2d ed. Boston: Harvard Business School, 2002.

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    A definitive analysis of the challenges facing organizations that work across national borders. Highlights the design features of the transnational organization and explains how it fits the challenges posed by global competition.

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  • Burton, Richard M., Gerardine DeSanctis, and Børge Obel. Organizational Design: A Step-by-Step Approach. 2d ed. Cambridge, UK: Cambridge University Press, 2006.

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    An introductory text. Chapters 4 and 5 (pp. 57–105) provide straightforward summaries of the main structural configurations (e.g., functional, divisional). More extensive than most introductory texts.

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  • Burton, Richard M., Bo Ericksen, Dorthe Døjbak Håkonsson, and Charles C. Snow, eds. Organization Design: The Evolving-State-of-the-Art. Papers presented at a conference held at Syddansk Universitet, May 2005. Information and Organisation Design. New York: Springer, 2006.

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    A selection of papers from a conference focused on revitalizing academic interest in the study of design that covers a range of relevant themes and perspectives, including configuration theory and structural contingency theory. The issue of internal and external fit and their effect on performance figure prominently.

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  • Gouldner, Alvin W. Patterns of Industrial Bureaucracy. Glencoe, IL: Free Press, 1954.

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    An early and seminal examination of a bureaucratic organization. Gouldner observed the attempt by a new plant manager to impose a more formalized bureaucratic structure, and identified three variants of bureaucracy—“mock,” “representative,” and “punishment centered”—and their antecedents.

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  • Okhuysen, Gerardo A., and Beth A. Bechky. “Coordination in Organizations: An Integrative Perspective.” Academy of Management Annals 3.1 (2009): 463–502.

    DOI: 10.1080/19416520903047533Save Citation »Export Citation »

    Reviews how coordination has been treated in the literature, and highlights the mechanisms whereby it is achieved. These mechanisms have an impact in organizations by creating three integrative conditions: accountability, predictability, and common understanding. Available online through purchase.

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  • Tushman, Michael L., and Charles A. O’Reilly III. “Ambidextrous Organizations: Managing Evolutionary and Revolutionary Change.” California Management Review 38.4 (1996): 8–30.

    DOI: 10.2307/41165852Save Citation »Export Citation »

    Given the assumption that organizations should concurrently pursue the exploitation of existing knowledge and the exploration of new ideas and opportunities, how can these be incorporated in the same organizational framework in such a way that neither drives out the other? One solution is the ambidextrous, hybrid organizational design. Available online by subscription.

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  • Whetten, David A. “Organizational Comparative Analysis: Investigating Similarities and Differences among Organizations.” In Studying Differences between Organizations: Comparative Approaches to Organizational Research. Edited by Brayden G. King, Teppo Felin, and David A. Whetten, 63–87. Research in the Sociology of Organizations 26. Bingley, UK: Emerald, 2009.

    DOI: 10.1108/S0733-558X(2009)0000026005Save Citation »Export Citation »

    Revisits the case for studying types of organizations (e.g., schools, hospitals) rather than treating them as though they are all alike. The implications of doing so are laid out.

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Hybrid Organizations

Hybrids are usually defined as organizations influenced by two or more institutional logics—such as commercial organizations that embrace the practices and values of corporate sustainability (e.g., Besharov 2014), social welfare organizations that incorporate the market logic (Battilana and Dorado 2010; Pache and Santos 2013; Tracey, et al. 2011), and “public-private” partnerships, which are increasingly found in the public sector (Kivleniece and Quelin 2012). A different but complementary definition portrays hybrids as consisting of multiple identities—see Besharov 2014. The challenges for these organizations are twofold: to retain legitimacy with external agencies, and to manage internal contestation and avoid mission drift. These challenges are not insignificant, and hybrids have been shown to be highly unstable—for a review, see Battilana and Lee 2014. Much interest is being shown in how these challenges are managed, whether through structural combinations that draw from different logics (as in Pache and Santos 2013), through mutual accommodation on the part of logic representatives within the hybrid (as in McPherson and Sauder 2013), and through the distinctive behaviors of successful integrative managers (as in Besharov 2014). Increasing recognition is being given to the dynamic nature of hybrid managing, as in Jay 2013 (see Managing Paradoxes). Research on hybrids echoes the early works of contingency theory—notably by Paul Lawrence and Jay Lorsch (see Lawrence and Lorsch 1999, cited under Structural Contingency Theory / Information-Processing Theory)—and current work on paradoxes and ambidexterity (see Managing Paradoxes and Organizational Design for references).

  • Battilana, Julie, and Silvia Dorado. “Building Sustainable Hybrid Organizations: The Case of Commercial Microfinance Organizations.” Academy of Management Journal 53.6 (2010): 1419–1440.

    DOI: 10.5465/AMJ.2010.57318391Save Citation »Export Citation »

    A study of two newly formed microfinance organizations that sought to combine banking and development logics. Indicates the difficulties of the challenge and highlights the critical role of hiring practices in achieving success.

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  • Battilana, Julie, and Matthew Lee. “Advancing Research on Hybrid Organizing—Insights from the Study of Social Enterprises.” Academy of Management Annals 8.1 (2014): 397–441.

    DOI: 10.1080/19416520.2014.893615Save Citation »Export Citation »

    A comprehensive review of the issues surrounding hybrid management, by using social enterprises as an exemplar. Discusses four organizational areas where hybrid organizing occurs: core activities, organization design, interorganizational relationships, and workforce composition and socialization.

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  • Besharov, Marya L. “The Relational Ecology of Identification: How Organizational Identification Emerges When Individuals Hold Divergent Values.” Academy of Management Journal 57.5 (2014): 1485–1512.

    DOI: 10.5465/amj.2011.0761Save Citation »Export Citation »

    Defines a hybrid in terms of multiple identities and asks how such organizations can succeed in building employees’ identification with the hybrid purpose. Emphasizes that identification emerges from bottom-up interactions and is significantly enabled and sustained by managers who enact three key practices.

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  • Besharov, Marya L., and Wendy K. Smith. “Multiple Institutional Logics in Organizations: Explaining their Varied Nature and Implications.” Academy of Management Review 39.3 (2014): 364–381.

    DOI: 10.5465/amr.2011.0431Save Citation »Export Citation »

    Proposes a framework that spells out four types of logic multiplicity according to the combination of logic compatibility and the centrality of the logic to the organization’s purposes. Links each type to the probability, or otherwise of tension occurring within an organization.

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  • Kivleniece, Ilze, and Bertrand V. Quelin. “Creating and Capturing Value in Public-Private Ties: A Private Actor’s Perspective.” Academy of Management Review 37.2 (2012): 272–299.

    DOI: 10.5465/amr.2011.0004Save Citation »Export Citation »

    Proposes two types of public-private combination and explores their different value-creating capacities, rationales, and outcomes. Raises two important restraints on private-value capture: public-partner opportunism and external-stakeholder activism.

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  • McPherson, Chad Michael, and Michael Sauder. “Logics in Action: Managing Institutional Complexity in a Drug Court.” Administrative Science Quarterly 58.2 (2013): 165–196.

    DOI: 10.1177/0001839213486447Save Citation »Export Citation »

    Studies the day-to-day interactions of actors, each socialized into a particular logic but successfully cooperating by exercising discretion and reciprocal respect over the priority given to and the application of any logic to particular situation.

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  • Pache, Anne-Claire, and Filipe Santos. “Inside the Hybrid Organization: Selective Coupling as a Response to Competing Institutional Logics.” Academy of Management Journal 56.4 (2013): 972–1001.

    DOI: 10.5465/amj.2011.0405Save Citation »Export Citation »

    A study of social enterprises in France. In order to retain legitimacy with external audiences holding different logics, successful organizations adopt particular practices from each logic. The combination is affected by the history of the organization and how it is thus perceived by the different audiences.

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  • Tracey, Paul, Nelson Phillips, and Owen Jarvis. “Bridging Institutional Entrepreneurship and the Creation of New Organizational Forms: A Multilevel Model.” Organization Science 22.1 (2011): 60–80.

    DOI: 10.1287/orsc.1090.0522Save Citation »Export Citation »

    Examines a failed social enterprise in the United Kingdom and foregrounds the institutional work involved in creating a new type of organizational form underpinned by a novel hybrid logic. Considers the relationship between entrepreneurship and institutional entrepreneurship.

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Governance

Corporate governance is a set of arrangements that define whose interests will be represented and prioritized in organizational decisions and actions. Often, corporate governance is associated with boards of directors and top management teams. But this is an overly narrow conception and ignores differences arising from national contexts (Aguilera and Jackson 2010) and the role of regulatory gatekeepers, such as audit firms and investment analysts (Coffee 2006). One approach to governance is underpinned by agency theory and focuses on arrangements that ensure that shareholder interests are given priority (Dalton, et al. 2007). However, the prescriptions of agency theory are not always supported. Westphal and Bednar 2005, for example, demonstrates how “pluralistic ignorance” can affect the behavior of outside board members. More generally, the implications of the agency approach and its connection to broader societal norms have begun to receive critical scrutiny. A different, albeit complementary, approach to governance is provided by stakeholder theory, which involves the incorporation of wider sets of interests (Donaldson and Preston 1995). Most governance research is US centric. Comparative studies, in contrast, examine how the institutional arrangements of different countries shape governance structures (e.g., Aguilera and Jackson 2010) and their different outcomes. Governance arrangements not only vary across countries but also are historically contingent; that is, the same practices can be viewed differently in different eras (Zajac and Westphal 2004). The governance of noncorporate forms has received less attention, but there is growing attention to nonprofits (e.g., Ostrower and Stone 2006) and professional service firms (e.g., Greenwood, et al. 2007). The influence of family ownership has also been proposed as a distinctive governance context, usually from an agency theory perspective.

  • Aguilera, Ruth V., and Gregory Jackson. “Comparative and International Corporate Governance.” Academy of Management Annals 4.1 (2010): 485–556.

    DOI: 10.1080/19416520.2010.495525Save Citation »Export Citation »

    Extensive and authoritative review of the governance literature that gives special attention to cross-national differences and to comparative research. Compares the theoretical paradigms of economics, culture, law, and politics and highlights the different insights for explaining similarities and differences among corporate governance practices across countries. Available online for purchase or by subscription.

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  • Coffee, John C., Jr. Gatekeepers: The Professions and Corporate Governance. Clarendon Lectures in Management Studies. Oxford: Oxford University Press, 2006.

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    Most studies of governance stress the role of boards of directors and other forms of shareholder representation, to the neglect of the roles played by professional agents, such as auditing and accounting firms, law firms, and securities analysts. This book fills this gap.

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  • Dalton, Dan R., Michael A. Hitt, S. Trevis Certo, and Catherine M. Dalton. “The Fundamental Agency Problem and Its Mitigation: Independence, Equity, and the Market for Corporate Control.” Academy of Management Annals 1.1 (2007): 1–64.

    DOI: 10.1080/078559806Save Citation »Export Citation »

    Carefully reviews three aspects of governance intended to resolve agency theory’s concern that the separation of ownership encourages managers to prioritize their own interests over those of shareholders: independent boards of directors, the inclusion of equity in the compensation of chief executive officers (CEOs) and top managers, and the vulnerability of organizations to market consequences (e.g., takeovers). Excellent and balanced account. Available online for purchase or by subscription.

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  • Donaldson, Thomas, and Lee E. Preston. “The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications.” Academy of Management Review 20.1 (1995): 65–91.

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    Challenges the agency focus on the sole importance of shareholders and proposes that the interests of a wider range of stakeholders affected by organizations should be considered. Available online for purchase or by subscription.

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  • Greenwood, Royston, David L. Deephouse, and Stan Xiao Li. “Ownership and Performance of Professional Service Firms.” Organization Studies 28.2 (2007): 219–238.

    DOI: 10.1177/0170840606067992Save Citation »Export Citation »

    A rare empirical examination of different ownership and governance structures. Looks at three ownership arrangements of professional service firms (large management consultancies) and finds that private corporations and partnerships outperform public corporations, a result attributed to increased monitoring by owners and greater motivation by professionals seeking advancement to partnership. Available online for purchase or by subscription.

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  • Ostrower, Francie, and Melissa A. Stone. “Governance: Research Trends, Gaps, and Future Prospects.” In The Nonprofit Sector: A Research Handbook. 2d ed. Edited by Walter W. Powell and Richard Steinberg, 612–628. New Haven, CT: Yale University Press, 2006.

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    Boards in the nonprofit sector can serve purposes different from those in the corporate world. This chapter gives an overview of approaches that have been taken to the study of nonprofit boards, and it summarizes the questions explored and the resulting observations; in doing so it provides a useful contrast to the more typical emphasis on public corporations.

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  • Westphal, James D., and Michael K. Bednar. “Pluralistic Ignorance in Corporate Boards and Firms’ Strategic Persistence in Response to Low Firm Performance.” Administrative Science Quarterly 50.2 (2005): 262–298.

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    Agency theory presumes that external board members will voice their concern with poor organizational performance. However, this does not always occur. This article draws on the social-psychological theory of pluralistic ignorance to explain why this is the case and the likelihood of occurrence. Available online for purchase or by subscription.

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  • Zajac, Edward J., and James D. Westphal. “The Social Construction of Market Value: Institutionalization and Learning Perspectives on Stock Market Reactions.” American Sociological Review 69.3 (2004): 433–457.

    DOI: 10.1177/000312240406900306Save Citation »Export Citation »

    Shows that stock market reactions to corporate practices, such as stock repurchase plans, are not a function of the efficiency per se of those practices but are shaped by the prevailing institutional logic; that is, the same practice can be viewed positively or negatively depending on the logics currently held by analysts. Available online by subscription.

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Organizational Reputation

The importance of an organization’s reputation as an influence on its behavior and performance has received attention primarily following the seminal contribution in Fombrun and Shanley 1990. Lange, et al. 2011 identifies three definitions of reputation found in the literature—familiarity (or being known), beliefs about what to expect (being known for something), and generalized favorability. Most research deals with one or more of three themes: the consequences of reputation, its antecedents, and its management. The study of consequences includes not only economic outcomes—Pfarrer, et al. 2010, for example, shows how reputation affects how stock markets respond to earnings surprises, and Deephouse 2000 links reputation to a firm’s return on assets—but also non-economic outcomes, such as the ability to attract higher-quality personnel. The consequences of a high reputation may not always be unambiguously positive, because it might generate higher expectations and prompt questionable behavior (Rhee and Haunschild 2006). An important stream of research adopts an explicitly institutional approach by linking reputation to norms and values and by highlighting the role of intermediaries; for example, the media (emphasized in Deephouse and Carter 2005).

  • Deephouse, David L. “Media Reputation as a Strategic Resource: An Integration of Mass Communication and Resource-Based Theories.” Journal of Management 26.6 (2000): 1091–1112.

    DOI: 10.1177/014920630002600602Save Citation »Export Citation »

    Considers reputation as a resource leading to competitive advantage. The paper integrates mass communication theory and shows that media reputation increases the performance of commercial banks.

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  • Deephouse, David L., and Suzanne M. Carter. “An Examination of Differences between Organizational Legitimacy and Organizational Reputation.” Journal of Management Studies 42.2 (2005): 329–360.

    DOI: 10.1111/j.1467-6486.2005.00499.xSave Citation »Export Citation »

    Clarifies the relationship between legitimacy and reputation. The paper then examines two antecedents of the financial, regulatory, and public dimensions of legitimacy and reputation in a population of US banks.

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  • Fombrun, Charles, and Mark Shanley. “What’s in a Name? Reputation Building and Corporate Strategy.” Academy of Management Journal 33.2 (1990): 233–258.

    DOI: 10.2307/256324Save Citation »Export Citation »

    Examination of 292 large US firms that shows how public reputations are developed and their influence on mobility business within industries.

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  • Lange, Donald, Peggy M. Lee, and Ye Dai. “Organizational Reputation: A Review.” Journal of Management 37.1 (2011): 153–184.

    DOI: 10.1177/0149206310390963Save Citation »Export Citation »

    Reviews the literature on reputation, giving special attention to the first decade of the 21st century. Offers guidance on important directions for future research.

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  • Pfarrer, Michael D., Timothy G. Pollock, and Violina P. Rindova. “A Tale of Two Assets: The Effects of Firm Reputation and Celebrity on Earnings Surprises and Investors’ Reactions.” Academy of Management Journal 53.5 (2010): 1131–1152.

    DOI: 10.5465/AMJ.2010.54533222Save Citation »Export Citation »

    Reputation is usually associated with positive consequences. This paper distinguishes between and compares the effects of reputations of celebrities in their effects on responses to earnings surprise.

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  • Rhee, Mooweon, and Pamela R. Haunschild. “The Liability of Good Reputation: A Study of Product Recalls in the U.S. Automobile Industry.” Organization Science 17.1 (2006): 101–117.

    DOI: 10.1287/orsc.1050.0175Save Citation »Export Citation »

    Shows that, contrary to most studies that highlight the benefits of a high reputation, a high reputation can be a liability, as in this study of the US automobile industry, which demonstrates that firms with high reputations experience negative responses to product recalls.

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  • Rindova, Violina P., Ian O. Williamson, Antoaneta P. Petkova, and Joy Marie Sever. “Being Good or Being Known: An Empirical Examination of the Dimensions, Antecedents, and Consequences of Organizational Reputation.” Academy of Management Journal 48.6 (2005): 1033–1049.

    DOI: 10.5465/AMJ.2005.19573108Save Citation »Export Citation »

    Examines and shows, in the context of business schools, how reputations from the perspective of different stakeholders contribute to the price premium associated with a favorable reputation.

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Goals, Effectiveness, and Performance

Goals are both explicitly and implicitly part of the definition of organizations as purposeful collective entities. Yet, different theories treat goals differently. Structural contingency theory assumes that an organization has a set of goals from which appropriate structures can be derived. Resource dependency theory implies goals of securing access to resources. Institutional theory deems that goals can be largely symbolic and a means of gaining social endorsement. Agency theory stresses that the goal is to maximize shareholder interests. Stakeholder theory emphasizes that organizations should attend to the interests of multiple stakeholders and that goals should be framed accordingly. However, Selznick 1949 reminds us that goals can become subverted as a consequence of the involvement of external and internal interests. Another early essay, Perrow 1961, points out that the formal goals of an organization are often vague and distinct from the operative goals that can be distilled from the organization’s actual practices. An important breakthrough in thinking about goals was Robert E. Quinn and John Rohrbaugh’s model of organizational effectiveness, which developed the idea of competing values underlying a multidimensional approach (Quinn and Rohrbaugh 1983). Similarly, Cameron 1986 suggests that because of the variety of effectiveness measures possible, the best way is to conceptualize effectiveness as a paradox. The approach of the “balanced scorecard” (Kaplan and Norton 1996) emphasizes a mixture of financial and nonfinancial measures. The study of organizational goals, effectiveness, and performance is inextricably linked with issues covered under Organizational Learning Theory, Entrepreneurship, Organizational Change, and Organizational Corruption/Wrongdoing. However, although every organization theory implicitly deals with goals and performance, it is unusual for them to be dealt with directly either conceptually or in terms of measurement.

  • Cameron, Kim S. “Effectiveness as Paradox: Consensus and Conflict in Conceptions of Organizational Effectiveness.” Management Science 32.5 (1986): 539–553.

    DOI: 10.1287/mnsc.32.5.539Save Citation »Export Citation »

    The starting point for analysis is that there is both agreement and disagreement over definitions and measures of organizational effectiveness. Most effective organizations have to deal with the paradoxes that this situation produces—contradictions, incompatibilities, and simultaneous opposites. Available online for purchase or by subscription.

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  • Kaplan, Robert S., and David P. Norton. The Balanced Scorecard: Translating Strategy into Action. Boston: Harvard Business School, 1996.

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    The balanced scorecard is about the identification of a small number of financial and nonfinancial measures related to the implementation of a strategy. Targets are attached to measure performance. Visions are turned into operational goals linked to individual performance. Business plans are produced, and strategy is adjusted to performance feedback.

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  • Perrow, Charles. “The Analysis of Goals in Complex Organizations.” American Sociological Review 26.6 (1961): 854–866.

    DOI: 10.2307/2090570Save Citation »Export Citation »

    Distinguishes between official and operative goals. The former are those spelled out in formal policies and reports and are often used in speeches to outside audiences. Operative goals, in contrast, are represented in the operations of the organization and are more informative about what the organization is really trying to accomplish. Available online by subscription.

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  • Quinn, Robert E., and John Rohrbaugh. “A Spatial Model of Effectiveness Criteria: Towards a Competing Values Approach to Organizational Analysis.” Management Science 29.3 (1983): 363–377.

    DOI: 10.1287/mnsc.29.3.363Save Citation »Export Citation »

    The authors accept that effectiveness is a multifaceted concept about which there is much disagreement. Different conceptions of effectiveness are related to different theories of organizations, such as models of rational choice and models of open systems. These conceptions represent what is valued as an organizational outcome. Available online for purchase or by subscription.

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  • Selznick, Philip. TVA and the Grass Roots: A Study in the Sociology of Formal Organization. University of California Publications in Culture and Society. Berkeley: University of California Press, 1949.

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    A classic account of how organizational goals can be displaced and subverted as external and internal interests become involved in governance and decision processes. In effect, by seeking to co-opt external interests in an attempt to advance their goals, organizations run the risk of becoming co-opted. Reprinted as TVA and the Grass Roots: A Study of Politics and Organization (Berkeley: University of California Press, 1980).

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Decision Making

The study of decision making in organizations has taken two main directions. One, associated with the Carnegie school (see Behavioral Theory of the Firm and Organizational Learning Theory), questions the rational-man model that underlies much economic theory. Herbert A. Simon, in a series of works (see March and Simon 1958 and March and Simon 1993, both cited under Beginnings), suggests that this model is inadequate because decision makers have limited cognitive abilities and because available information is often ambiguous and always incomplete. Thus the process of decision making is one of “bounded rationality” and “satisficing” rather than optimizing. From this starting point, works from several disciplines explored the processes whereby decisions emerge (e.g., Nutt 1986, Mintzberg and Waters 1985; see also Hickson, et al. 1971, cited under Intraorganizational Power, Politics, and Conflict). In most instances, empirical studies of decision making examine the processes leading up to the decision. Some, however, study the processes of decision implementation (e.g., Nutt 1986). A second direction highlights the role of power and politics in decision processes. Politics is recognized in the Carnegie school but is less salient than the constraint of bounded rationality. In contrast, this second tradition emphasizes that organizational structures create groups with different interests and levels of power—hence the defining feature of organizational decision making is not its bounded rationality but the “game of power” (Miller and Wilson 2006; see also Interorganizational Relationships). Both of these research directions recognize that how decisions are made or emerge varies according to a range of factors, such as the novelty of the issue and the necessity for speed (see Dutton 1986). Of particular interest is how organizations make decisions in highly ambiguous and fast-changing circumstances (Eisenhardt 1989). Cutting across both approaches is attention theory (Ocasio 2011), which draws primarily on the behavioral theory of the firm and managerial cognition theory. The focus of attention theory is understanding how issues are selected for attention by organizations.

  • Dutton, Jane E. “The Processing of Crisis and Non-crisis Strategic Issues.” Journal of Management Studies 23.5 (1986): 501–517.

    DOI: 10.1111/j.1467-6486.1986.tb00434.xSave Citation »Export Citation »

    Shows that organizations process different types of strategic issues in different ways depending on whether they are sensed as crisis or noncrisis issues. The theoretical and practical implications of the findings are discussed. Available online for purchase or by subscription.

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  • Eisenhardt, Kathleen M. “Making Fast Strategic Decisions in High-Velocity Environments.” Academy of Management Journal 32.3 (1989): 543–576.

    DOI: 10.2307/256434Save Citation »Export Citation »

    Under circumstances of high turbulence, ambiguity, and urgency, organizations respond using flexible, adaptive, and innovative practices. Good illustration of the contingent nature of decision processes. Available online for purchase or by subscription.

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  • Miller, Susan J., and David C. Wilson. “Perspectives on Organization Decision-Making.” In The SAGE Handbook of Organizational Studies. 2d ed. Edited by Stewart R. Clegg, Cynthia Hardy, Thomas B. Lawrence, and Walter R. Nord, 469–484. London: SAGE, 2006.

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    Useful review of the main themes and assumptions in the study of decision making. Nicely situates each of the main themes in its historical context and juxtaposes them.

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  • Mintzberg, Henry, and James A. Waters. “Of Strategies, Deliberate and Emergent.” Strategic Management Journal 6.3 (1985): 257–272.

    DOI: 10.1002/smj.4250060306Save Citation »Export Citation »

    One of several papers from a ten-year examination of how strategy “patterns in a stream of decisions” (p. 257) arise in organizations. Draws a distinction between deliberate and emergent strategies as end points of a continuum and outlines various strategies that fall between them (e.g., planned, entrepreneurial, imposed). Available online for purchase or by subscription.

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  • Nutt, Paul C. “Tactics of Implementation.” Academy of Management Journal 29.2 (1986): 230–261.

    DOI: 10.2307/256187Save Citation »Export Citation »

    Explores how managers, sometimes successfully but not always, go about implementing decisions. Suggests a repertoire of tactics—intervention, participation, persuasion, and edict—and compares their likelihood of success. Available online for purchase or by subscription.

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  • Ocasio, William. “Attention to Attention.” Organization Science 22.5 (2011): 1286–1296.

    DOI: 10.1287/orsc.1100.0602Save Citation »Export Citation »

    Compares three approaches to how and why issues arise to the agenda and attention of organizational decision makers. Emphasizes the importance of attention processes for explaining organizational adaptation and change. Available online for purchase or by subscription.

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Managing Paradoxes

A developing interest in understanding organizations views them as continually dealing with paradoxes. The central theme is how organizations deal with competing demands simultaneously (Smith and Lewis 2011). The paradox perspective suggests that such competing demands are not unusual organizational features but are ever present and thus require continuous effort. There are a number of strands to this theme, including defining types of paradox, dealing with paradoxes, paradox as central to performance/sustainability, and examining processes of paradoxical thinking. Defining types of paradox organizes the variety of tensions and competing demands that organizations face into categories (Lewis 2000). Dealing with paradoxes is about coping mechanisms, and a particular interest here is in organizational ambidexterity (see Lavie, et al. 2010). Early work on paradox showed that organizational performance was paradoxical and that improved performance came from recognizing that and dealing with it (Cameron 1986). Approaches to paradoxical thinking examine the ways in which managers, and others, can frame issues as paradoxical to improve creativity and performance (Miron-Spektor, et al. 2011). An interesting early-21st-century development is to utilize paradoxical ideas in institutional theory through institutional logics and hybrid organization (see Hybrid Organizations and Jay 2013).

  • Cameron, Kim S. “Effectiveness as Paradox: Consensus and Conflict in Conceptions of Organizational Effectiveness.” Management Science 32.5 (1986): 539–553.

    DOI: 10.1287/mnsc.32.5.539Save Citation »Export Citation »

    Effective organizations are characterized by paradox. Organizational effectiveness is paradoxical because opposite criteria are present simultaneously.

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  • Jay, Jason. “Navigating Paradox as a Mechanism of Change and Innovation in Hybrid Organizations.” Academy of Management Journal 56.1 (2013): 137–159.

    DOI: 10.5465/amj.2010.0772Save Citation »Export Citation »

    This article develops a process model of navigating such paradoxes: in sense making about paradoxical outcomes, actors grapple with the definition of success and can transform the organizational logic.

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  • Lavie, Dovev, Uriel Stettner, and Michael L. Tushman. “Exploration and Exploitation within and across Organizations.” Academy of Management Annals 4.1 (2010): 109–156.

    DOI: 10.1080/19416521003691287Save Citation »Export Citation »

    Exploration and exploitation (à la Jim March) involve dealing with tensions, trade-offs, and balancing activities. One important way is through ambidexterity, where exploration and exploitation are dealt with simultaneously rather than being seen as opposites.

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  • Lewis, Marianne W. “Exploring Paradox: Toward a More Comprehensive Guide.” Academy of Management Review 25.4 (2000): 760–776.

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    Paradox is an inherent feature of organizations. To properly understand it we need to examine underlying tensions, the virtuous and vicious cycles of paradoxical processes, the management strategies used to deal with paradox, and the way in which these operate in different types of paradox.

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  • Miron-Spektor, Ella, Francesca Gino, and Linda Argote. “Paradoxical Frames and Creative Sparks: Enhancing Individual Creativity through Conflict and Integration.” Organizational Behavior and Human Decision Processes 116.2 (2011): 229–240.

    DOI: 10.1016/j.obhdp.2011.03.006Save Citation »Export Citation »

    An empirical study of paradoxical-thinking frames. When paradox frames are adopted by organization members, more-creative outcomes ensue.

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  • Smith, Wendy K., and Marianne W. Lewis. “Toward a Theory of Paradox: A Dynamic Equilibrium Model of Organizing.” Academy of Management Review 36.2 (2011): 381–403.

    DOI: 10.5465/AMR.2011.59330958Save Citation »Export Citation »

    This paper works toward a theory of paradox, dealing with definitions, assumptions, and boundary conditions.

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Entrepreneurship

Entrepreneurship is the creation of new organizations. Most research in this domain takes a micro perspective rooted in economics, finance, or strategy. However, studies by organization theorists have also stressed the value of attending to macrolevel forces, especially as they relate to opportunity recognition and new venture legitimacy. A key insight is that ventures are most likely to succeed when audiences understand them (cognitive legitimacy) and view them as appropriate (sociopolitical legitimacy) (Aldrich and Fiol 1994). Accordingly, the work of institutional theorists has shown that it is important to position a venture in an established organizational category while emphasizing the venture’s unique attributes in this context (e.g., Lounsbury and Glynn 2001, Navis and Glynn 2011). Ventures that fail to do this may have difficulty in attracting resources, such as customers and capital (see Aldrich and Fiol 1994). A complementary approach shifts the level of analysis and examines how new categories of organizations gain legitimacy. Population ecology equates this with the density of firms in a category and suggests that this has implications for the success of subsequent ventures (see Baum and Oliver 1996). Adding nuance, institutional theorists have asserted that legitimation is an active accomplishment based on the joint effort of entrepreneurs, who disseminate meanings about a nascent category and argue for its appropriateness (see, e.g., Navis and Glynn 2010). Cognate studies have also shown that social movements can facilitate entrepreneurship by advocating for the legitimacy of certain types of firms and building a resource base for them to draw on. Through these efforts, social movements may also help make entrepreneurs more attuned to opportunities in an emergent category (see Sine and Lee 2009). This finding complements earlier sociological studies demonstrating that opportunity recognition is shaped by an entrepreneur’s social network (e.g., Aldrich 2006).

  • Aldrich, Howard E. Organizations Evolving. 2d ed. London: SAGE, 2006.

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    Originally published in 1999. In this seminal book Aldrich integrates insights from the major streams of organization theory (institutionalism, ecology, resource dependence, networks, learning) to provide a richly detailed account of the processes through which organizations and organizational populations emerge and change. Chapter 4 contains a focused examination of the ways opportunity recognition is shaped through an entrepreneur’s social network.

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  • Aldrich, Howard E., and C. Marlene Fiol. “Fools Rush In? The Institutional Context of Industry Creation.” Academy of Management Review 19.4 (1994): 645–670.

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    One of the first texts positioned at the intersection of entrepreneurship and institutional theory. The authors assert that ventures in new industries face obstacles because audiences neither understand them (cognitive legitimacy) nor view them as appropriate (sociopolitical legitimacy). This paper foreshadows much of the subsequent literature on organizations and categorization and offers an early understanding of how entrepreneurs in nascent industries create their ventures. Available online for purchase or by subscription.

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  • Baum, Joel A. C., and Christine Oliver. “Toward an Institutional Ecology of Organizational Founding.” Academy of Management Journal 39.5 (1996): 1378–1427.

    DOI: 10.2307/257003Save Citation »Export Citation »

    Focuses on adding nuance to ecological discussions concerning organizational niches, density, and foundings. In addition to helping specify the different dimensions along which niches may be related, the authors find support for an inverted U-shaped relationship between the density of organizations in a niche and subsequent foundings. Available online for purchase or by subscription.

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  • Lounsbury, Michael, and Mary Ann Glynn. “Cultural Entrepreneurship: Stories, Legitimacy, and the Acquisition of Resources.” In Special Issue: Strategic Entrepreneurship: Entrepreneurial Strategies for Wealth Creation. Edited by Michael A. Hitt, R. Duane Ireland, S. Michael Camp, and Donald L. Sexton. Strategic Management Journal 22.6–7 (2001): 545–564.

    DOI: 10.1002/smj.188Save Citation »Export Citation »

    This paper theorizes the relationship between entrepreneurial stories and new venture success. A key insight is that an entrepreneur needs to clearly convey his or her firm’s membership in an existing organizational category to gain legitimacy while emphasizing the unique attributes of the venture in this context. This paper introduced the influential concept of cultural entrepreneurship. Available online for purchase or by subscription.

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  • Navis, Chad, and Mary Ann Glynn. “How New Market Categories Emerge: Temporal Dynamics of Legitimacy, Identity, and Entrepreneurship in Satellite Radio, 1990–2005.” Administrative Science Quarterly 55.3 (2010): 439–471.

    DOI: 10.2189/asqu.2010.55.3.439Save Citation »Export Citation »

    Looks at the role of entrepreneurial firms in industry emergence and legitimation. In an important theoretical elaboration, the authors show that firms advocate for the legitimacy of their industry as a whole in its emergent stages. Once collective legitimacy has been achieved (for the industry and, by corollary, the firms that constitute it), firms emphasize the ways they differ from their competitors. Available online for purchase or by subscription.

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  • Navis, Chad, and Mary Ann Glynn. “Legitimate Distinctiveness and the Entrepreneurial Identity: Influence on Investor Judgments of New Venture Plausibility.” Academy of Management Review 36.3 (2011): 479–499.

    DOI: 10.5465/AMR.2011.61031809Save Citation »Export Citation »

    Sets up a tension concerning the need for new ventures to be similar to others to be considered legitimate, but their need to be distinct to gain attention from resource providers. These competing pulls can be reconciled by considering the identity of a new venture as a multidimensional and hierarchically nested construct. Available online for purchase or by subscription.

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  • Sine, Wesley D., and Brandon H. Lee. “Tilting at Windmills? The Environmental Movement and the Emergence of the U.S. Wind Energy Sector.” Administrative Science Quarterly 54.1 (2009): 123–155.

    DOI: 10.2189/asqu.2009.54.1.123Save Citation »Export Citation »

    One of the first studies to deal with the influence of social movement organizations on entrepreneurship. Sine and Lee contend that the environmental movement catalyzed entrepreneurship in the wind energy sector by encouraging favorable perceptions of such ventures and helping build a supportive resource base for them to draw on. Available online for purchase or by subscription.

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Technology and Innovation

The roles of technology and innovation in environmental and organizational change have roots in the economic history of business cycles (Schumpeter 1983), patterns of industrial innovation (Abernathy and Utterback 1978), and patterns of technological change in organizations and cultures (Rogers 2003). Early studies in organizational theory of the role of technology, using a contingency theory lens, stressed the relationship between technology and the performance of different organizational forms, in some cases emphasizing the relationship between organizational form and degree of environmental change (e.g., Burns and Stalker 1994, cited under Structural Contingency Theory / Information-Processing Theory); in others, the relationship between different technologies and organizational structures (e.g., Woodward 1980). However, this literature has been criticized for its overly static and deterministic view of technology. In contrast, Barley 1986 shows that the same technology can generate structural variation across firms because of the influence of historical processes in which technologies are embedded. Several major streams of inquiry characterize late-20th- and early-21st-century work. The first addresses how technology and innovation influence environmental change (e.g., Tushman and Anderson 1986), examining how changes in technology can enhance or destroy the competencies of firms, thus altering the population of firms and environmental conditions. A second stream, using resource dependence theory, considers how the environmental and organizational selection processes affect the technologies endogenously developed in the firm (e.g., Burgelman 1983). A third stream deals with the boundaries of organizations and innovation. One variant, using ideas from transaction cost economics (TCE), is concerned with which resources and capabilities need to be controlled by organizations to appropriate benefits from innovations (e.g., Teece 1986). Another variant, using network theory, argues that in highly innovative industries the locus of innovation is distributed across and between organizations (e.g., Powell, et al. 1996).

  • Abernathy, William J., and James M. Utterback. “Patterns of Industrial Innovation.” Technology Review 80.7 (1978): 40–47.

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    This article introduces the idea that the character and focus of innovation change as a company matures. The article contends that attention to new products obfuscates the value and effects of incremental product and process innovation. Through the interactions of small, entrepreneurial organizations and larger firms, different types of technologies are associated with different types of organizations, leading to predictable dynamics of industrial innovation.

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  • Barley, Stephen R. “Technology as an Occasion for Structuring: Evidence from Observations of CT Scanners and the Social Order of Radiology Departments.” Administrative Science Quarterly 31.1 (1986): 78–108.

    DOI: 10.2307/2392767Save Citation »Export Citation »

    Shows that identical technologies can result in similar dynamics yet lead to different structural outcomes in organizations. Barley postulated that technologies are social objects that influence organizational structures but that then-current theories of organizational form were insensitive to the many ways outcomes are contingent on specific historical processes. Available online by subscription.

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  • Burgelman, Robert A. “A Process Model of Internal Corporate Venturing in the Diversified Major Firm.” Administrative Science Quarterly 28.2 (1983): 223–244.

    DOI: 10.2307/2392619Save Citation »Export Citation »

    Develops a grounded model of how successful efforts depend on interlocking activities that resolve resource dilemmas between autonomous entrepreneurial ventures and the immediate goals of midlevel managers and top management. The article proposes that even though organizations may have resources to escape tight external control, organizational change emerges from a complex process of experimentation and selection rather than planned strategic change. Available online by subscription.

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  • Powell, Walter W., Kenneth W. Koput, and Laurel Smith-Doerr. “Interorganizational Collaboration and the Locus of Innovation: Networks of Learning in Biotechnology.” Administrative Science Quarterly 41.1 (1996): 116–145.

    DOI: 10.2307/2393988Save Citation »Export Citation »

    Asserts that in regimes of rapid technological change, the pooling of complementary resources is not as critical as having access to networks of learning. Proposes that learning is a social construction process and that sources of innovation are not easily produced within the boundaries of the organization, in many cases lying outside the organization. Available online by subscription.

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  • Rogers, Everett M. Diffusion of Innovations. 5th ed. New York: Free Press, 2003.

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    Originally published in 1962. This fifth edition of this classic is a substantial update of the 1962 version, which looks broadly at the patterns and social process of the spread of ideas and innovations. The book reviews research on the generation of innovations, their adoption, and the role of networks and organizations. Rogers’s book is anchored by problems of information, communication, and uncertainty.

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  • Schumpeter, Joseph A. The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle. Translated by Redvers Opie. Social Science Classics. New Brunswick, NJ: Transaction, 1983.

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    Originally published in 1934. Schumpeter aimed to explain business cycles and development. His main contribution, beginning with this book, is to argue for the role of the entrepreneur and innovation in economic change. This early work suggests that entrepreneurs drive development by carrying out new economic and technological combinations, leveraging the idea of innovation to explain phenomena such as entrepreneurial profit, the creation of new markets, and business disruptions.

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  • Teece, David J. “Profiting from Technological Innovation: Implications for Integration, Collaboration, Licensing, and Public Policy.” Research Policy 15.6 (1986): 285–305.

    DOI: 10.1016/0048-7333(86)90027-2Save Citation »Export Citation »

    Presents a model of why innovating firms often fail to appropriate returns from their innovations. Claims that innovation is but one of the many resources of the firm and that when appropriability regimes are weak, firms possessing the requisite complementary resources will benefit. The article builds an argument that under these conditions, firms should seek to acquire these resources or to contract for access. Available online for purchase or by subscription.

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  • Tushman, Michael L., and Philip Anderson. “Technological Discontinuities and Organizational Environments.” Administrative Science Quarterly 31.3 (1986): 439–465.

    DOI: 10.2307/2392832Save Citation »Export Citation »

    Examines the determinants of environmental change. The authors make the argument that technology evolves through periods of incremental change punctuated by breakthroughs that enhance or destroy the competencies of firms. These breakthroughs or discontinuities effect environmental turbulence and uncertainty. Available online by subscription.

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  • Woodward, Joan. Industrial Organization: Theory and Practice. 2d ed. Oxford: Oxford University Press, 1980.

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    Originally published in 1965. Studies the relationship between the technical complexity of the manufacturing process and the structural characteristics, such as levels of management and span of control, of manufacturing firms. This early example of structural contingency theory demonstrates the relationships among organizational context, structure, and firm success.

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Organizational Change

In the early 21st century, understanding organizational change is one of the central preoccupations of organizational theory (Bartunek, et al. 2011) and has been approached from a variety of perspectives (Demers 2007). A distinction can be drawn between studies that explore organizational flexibility and those that focus on radical organizational change. Organizational flexibility is akin to innovation and encompasses the kinds of organizational arrangements that enable continual creativity in an organization (Kanter 1983, Brown and Eisenhardt 1997); radical organizational change involves shifting from one organizational form to another and includes significant restructuring and the design of new processes and ways of working. Radical change is the more difficult to accomplish. Prior to the mid-1980s few theories of change existed. An exception is the life-cycle model proposed in Greiner 1972, which outlines the stages through which organizations evolve as they age, grow, and mature. However, the major organizational theories—resource dependence, institutionalism, ecology, and so on—each contributed to understanding of change. In the 1980s, explicit theories of change began to emerge (Van de Ven and Poole 1995), of which the most prominent is the punctuated-equilibrium model (Romanelli and Tushman 1994). Other theories are less dramatic and portray change as a sequencing of continuity and change. Four central questions, implicitly or explicitly, run through all these theories, although the relative emphasis on them varies: (1) What are the dynamics that precipitate change? (2) Where do new organizational forms come from, and how are they legitimated? (3) What are the temporal dynamics and organizational processes whereby change unfolds? (4) Can change be successfully managed, and if so, how? Ironically, most organizational researchers answer the last question pessimistically, in contrast to popular management texts.

  • Bartunek, Jean M., Julia Balogun, and Boram Do. “Considering Planned Change Anew: Stretching Large Group Interventions Strategically, Emotionally, and Meaningfully.” Academy of Management Annals 5.1 (2011): 1–52.

    DOI: 10.1080/19416520.2011.567109Save Citation »Export Citation »

    Reviews large-group interventions as methods for accomplishing planned organizational change. These interventions originate in the world of the practitioner but are less familiar to organization theorists. Available online for purchase or by subscription.

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  • Brown, Shona L., and Kathleen M. Eisenhardt. “The Art of Continuous Change: Linking Complexity Theory and Time-Paced Evolution in Relentlessly Shifting Organizations.” Administrative Science Quarterly 42.1 (1997): 1–34.

    DOI: 10.2307/2393807Save Citation »Export Citation »

    Highlights organizational flexibility and creativity rather than radical change. Offers insights into how six firms in the computer industry approach innovation and have differential success in their efforts. Successful companies combine limited structure with extensive communication practices in a way that avoids rigidity and chaos. Also engages the temporal dimension of transition processes. Available online by subscription.

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  • Demers, Christine. Organizational Change Theories: A Synthesis. Los Angeles: SAGE, 2007.

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    Provides a broad overview of the main theories of change. The book deliberately excludes the more normative and practitioner-oriented literature.

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  • Greiner, Larry E. “Evolution and Revolution as Organizations Grow.” Harvard Business Review 50.4 (1972): 37–46.

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    At the time this life-cycle model was highly influential. It proposes that organizations evolve through a series of stages as they mature. The 1998 reprint includes a commentary by the author that discusses the continuing relevance of the ideas in the original paper and adds a sixth stage. Available online for purchase or by subscription.

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  • Kanter, Rosabeth Moss. The Change Masters: Innovation and Enterprise in the American Corporation. New York: Simon and Schuster, 1983.

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    A landmark book that presents insights from many of the then-leading US corporations—General Electric, Hewlett-Packard, Wang Laboratories, Polaroid, and Honeywell—on how managers can enable innovation and entrepreneurship in large organizations.

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  • Romanelli, Elaine, and Michael L. Tushman. “Organizational Transformation as Punctuated Equilibrium: An Empirical Test.” Academy of Management Journal 37.5 (1994): 1141–1166.

    DOI: 10.2307/256669Save Citation »Export Citation »

    This article tests and finds support for three themes in the punctuated-equilibrium model of change, which is one of the central theories of organizational transformation. Available online for purchase or by subscription.

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  • Van de Ven, Andrew H., and Marshall Scott Poole. “Explaining Development and Change in Organizations.” Academy of Management Review 20.3 (1995): 510–540.

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    Reviews four theories that give very different means for explaining processes of change. Sets out the circumstances under which each theory most likely applies. Available online for purchase or by subscription.

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Intraorganizational Power, Politics, and Conflict

Power, politics, and conflict represent contested concepts in the study of organizations (Hardy and Clegg 2006). Typically, power is defined as the ability to get others to do what one wants them to. But there is contestation debate in the literature over the central meanings and role of power and whether it should be treated as a dependent or independent variable or even whether it can be disembedded from wider organizational phenomena at all. Studies of subunit power and CEO power and succession see power as related to organizational hierarchy and the control of resources and uncertainty, spelled out in the strategic contingencies theory of power (Hickson, et al. 1971). Politics then becomes the process of mobilizing power (Pettigrew 1973). Conflict arises from differential power and the ability to use that power (Pfeffer 1981). However, this view of power essentially operates at the level of observed decision making. Critical approaches see power as more embedded in processes, procedures, norms, values, and beliefs. Thus less “active” faces of power exist (Lukes 2005, Clegg 1989), and organizational actors have to be aware of issues of domination, discipline, and hegemony. In this view, power is exercised without those being controlled recognizing the situation they are in (Lawrence, et al. 2001). Generally, issues of power have become somewhat marginal to mainstream organization theory (Hinings and Greenwood 2002). A complementary literature, reviewed in Ferris, et al. 2007, looks at “political skills”; that is, the ability to exercise influence and power in the presence or absence of resource advantages.

  • Clegg, Stewart R. Frameworks of Power. London: SAGE, 1989.

    DOI: 10.4135/9781446279267Save Citation »Export Citation »

    Both an overview of approaches to the analysis of power and a framework for understanding power in organizations. A critical approach that sees mainstream approaches to power as depoliticizing organizational life and obscuring the true workings of power.

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  • Ferris, Gerald R., Darren C. Treadway, Pamela L. Perrewé, Robyn L. Brouer, Ceasar Douglas, and Sean Lux. “Political Skill in Organizations.” Journal of Management 33.3 (2007): 290–320.

    DOI: 10.1177/0149206307300813Save Citation »Export Citation »

    Reviews the literature on “political skills” (i.e., the “pattern of social competencies” that enables individuals in organizations to be effective in work situations).

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  • Hardy, Cynthia, and Stewart Clegg. “Some Dare Call It Power.” In The SAGE Handbook of Organization Studies. 2d ed. Edited by Stewart R. Clegg, Cynthia Hardy, Thomas B. Lawrence, and Walter R. Nord, 754–775. London: SAGE, 2006.

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    A review of approaches to understanding power in organizations that clearly outlines the components of and differences between the managerialist and the critical approaches to power.

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  • Hickson, David J., C. R. Hinings, Charles A. Lee, Rodney E. Schneck, and Johannes M. Pennings. “A Strategic Contingencies’ Theory of Intraorganizational Power.” Administrative Science Quarterly 16.2 (1971): 216–229.

    DOI: 10.2307/2391831Save Citation »Export Citation »

    The classic statement of the strategic contingencies theory of power. Organizations face a variety of contingencies that are strategic to their success, in particular coping with uncertainty in the environment and tasks. Subunits manage these contingencies, and power accrues to the subunits that successfully cope with those that are most strategic. Available online by subscription.

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  • Hinings, C. R., and Royston Greenwood. “Disconnects and Consequences in Organization Theory?” Administrative Science Quarterly 47.3 (2002): 411–421.

    DOI: 10.2307/3094844Save Citation »Export Citation »

    Argues that more attention should be paid to examination of the consequences of organizational actions. Available online for purchase or by subscription.

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  • Lawrence, Thomas B., Monika I. Winn, and P. Devereaux Jennings. “The Temporal Dynamics of Institutionalization.” Academy of Management Review 26.4 (2001): 624–644.

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    A critical approach to power by using the ideas of influence, force, discipline, and domination in the context of institutional theory. Available online for purchase or by subscription.

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  • Lukes, Steven. Power: A Radical View. 2d ed. Studies in Sociology. New York: Palgrave Macmillan, 2005.

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    Originally published in 1974. Although not directly concerned with power in organizations, this book sets out three faces of power from the more to the less active, which serve as an important basis for thinking about power in organizations and in society as a whole.

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  • Pettigrew, Andrew M. The Politics of Organizational Decision-Making. Organizations, People, Society. London: Tavistock, 1973.

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    Longitudinal case study of a British retail business that provides an early and important account of how politics is involved in decision making.

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  • Pfeffer, Jeffrey. Power in Organizations. Marshfield, MA: Pitman, 1981.

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    Pfeffer asserts not only that power is present in organizations but also that it is an important element in mobilizing activity to achieve necessary ends. A statement of the positive role of power and politics in organizations.

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Organizations and Professions

The tension between professionals and bureaucratic forms of organizing has been an important line of scholarship in organization theory, arising from the increasing scale and complexity of organizations and the growing size and scope of professions. Kornhauser 1982 laid the foundations for much of this work, outlining the increasing interdependence of these two forms and elaborating the bases for potential conflict. Scott 1965 emphasizes that different organizational forms vary in their accommodation of professional demands for autonomy. Subsequently, attention was given to identifying forms of organization that are more sensitive and receptive to professionals, although this interest subsequently declined. Greenwood, et al., 1990, however, drew attention to professional service firms, which have subsequently received growing attention since. Wallace 1995, for example, revisits the professional bureaucracy thesis through a study of law firms. At the more macro level, institutional theory recognizes the importance of professionals in modern society (Scott 2008 refers to them as the “lords of the dance”), and their role in shaping the structure of work is reviewed in Leicht and Fennell 2008. A rather different focus is provided in Coffee 2006, which examines the role of professional organizations (e.g., accounting firms, law firms) that act as “gatekeepers” for the market structures of capitalism. Smets, et al. 2012 looks at how international law firms influence professional practice in different countries.

  • Coffee, John C., Jr. Gatekeepers: The Professions and Corporate Governance. Clarendon Lectures in Management Studies. Oxford: Oxford University Press, 2006.

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    Gatekeepers are professional organizations that certify or verify information and other signals from corporations. As such they are important intermediaries between public organizations and investors. The book provides a history of auditors, law firms, securities analysts, and rating agencies and explores their weak performance in the early 21st century.

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  • Greenwood, Royston, C. R. Hinings, and John Brown. “‘P2 Form’ Strategic Management: Corporate Practices in Professional Partnerships.” Academy of Management Journal 33.4 (1990): 725–755.

    DOI: 10.2307/256288Save Citation »Export Citation »

    Identifies a form of ownership and governance that is very different from that found in publicly traded corporations and public bureaucracies. Available online for purchase or by subscription.

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  • Kornhauser, William. Scientists in Industry: Conflict and Accommodation. Westport, CT: Greenwood, 1982.

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    Originally published in 1962. The starting point in this groundbreaking work is the tension caused by the desire of professionals to preserve their autonomy and standards in the face of increasing pressure from the business and governmental organizations for which they work. Accommodation and conflict take place in organizations and the professions.

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  • Leicht, Kevin T., and Mary L. Fennell. “Institutionalism and the Professions.” In SAGE Handbook of Organizational Institutionalism. Edited by Royston Greenwood, Christine Oliver, Kerstin Sahlin, and Roy Suddaby, 431–448. Los Angeles: SAGE, 2008.

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    Reviews developments in the study of professional work through the lens of institutional theory. Highlights changes occurring in the markets, organizational forms, and technologies used in the delivery of professional services, and points to implications for professional norms.

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  • Scott, W. Richard. “Reactions to Supervision in a Heteronomous Professional Organization.” Administrative Science Quarterly 10.1 (1965): 65–81.

    DOI: 10.2307/2391650Save Citation »Export Citation »

    An early, important statement of the organizational-professional tension and of the organizational arrangements that seek to resolve it. In the “heteronymous” professional organization (e.g., schools), professional discretion is subordinated to formal controls. In contrast, the “autonomous” professional organization offers greater professional discretion. Available online by subscription.

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  • Scott, W. Richard. “Lords of the Dance: Professionals as Institutional Agents.” Organization Studies 29.2 (2008): 219–238.

    DOI: 10.1177/0170840607088151Save Citation »Export Citation »

    Reviews the influential role of professions in modern society and especially in the construction and maintenance of institutions. Suggests that the concept of profession is itself an institutional construct and that it has changed over time. Available online for purchase or by subscription.

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  • Smets, Michael, Tim Morris, and Royston Greenwood. “From Practice to Field: A Multilevel Model of Practice-Driven Institutional Change.” Academy of Management Journal 55.4 (2012): 877–904.

    DOI: 10.5465/amj.2010.0013Save Citation »Export Citation »

    A study of the interaction of UK and German lawyers and how professional practices change. Combines “practice” and institutional perspectives. Emphasizes that change often commences from day-to-day activities and can resonate to the level of professional field.

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  • Wallace, Jeanne E. “Organizational and Professional Commitment in Professional and Nonprofessional Organizations.” Administrative Science Quarterly 40.2 (1995): 228–255.

    DOI: 10.2307/2393637Save Citation »Export Citation »

    A study of lawyers and their organizational and professional commitments. Lawyers in nonprofessional organizations are found to be less committed to the legal profession. Discusses the importance of perceived career opportunities and criteria for distributing rewards relative to the effects of organizational structure. Available online by subscription.

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Corporate Political Activity

In addition to studies that examine organizations in terms of their social responsibility (or lack thereof), or their attention to stakeholders other than shareholders, or both (see Stakeholder Theory), some studies directly examine corporate political activity; that is, the attempt to influence public policy (Hillman, et al. 2004), often from a resource dependence perspective (e.g., Oliver and Holzinger 2008). Most studies focus on attempts to influence legislation (see Hillman, et al. 2004), but others point to the importance of understanding how organizations seek to influence regulatory officials (e.g., Holburn and Vanden Bergh 2008). The balance of evidence is that corporate political activity in its various forms (Hillman, et al. 2004) positively affects firm performance (see Lux, et al. 2011). However, there are risks associated with becoming linked to one political party (Siegel 2007). Stephen R. Barley, in his Organization and Management Theory Distinguished Scholar address, raised concerns over the “asteroid belt of organizations” (Barley 2007, p. 202) between politicians and citizens. (The 2010 Academy Award–winning documentary Inside Job further highlights the importance of this topic and is an excellent teaching tool for discussion purposes.) A rather different but complementary stream of research focuses on how organizations strategically present themselves to key audiences; that is, how they manage their image and the impressions they make on others (Elsbach 2006). A complementary stream of work looks at “advocacy organizations” that promote particular issues or collective interests—for a review, see Andrews and Edwards 2004.

  • Andrews, Kenneth T., and Bob Edwards. “Advocacy Organizations in the U.S. Political Process.” Annual Review of Sociology 30 (2004): 479–506.

    DOI: 10.1146/annurev.soc.30.012703.110542Save Citation »Export Citation »

    Examines advocacy organizations that promote specific concerns and collective interests.

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  • Barley, Stephen R. “Corporations, Democracy, and the Public Good.” Journal of Management Inquiry 16.3 (2007): 201–215.

    DOI: 10.1177/1056492607305891Save Citation »Export Citation »

    Asserts that organizations “now wield inordinate political power” (p. 1). Puts forward four firm-level political strategies: proactive, defensive, anticipatory, and reactive. Discusses three ways these strategies are enacted—promoting legislation favoring corporations at the expense of individual citizens, capturing regulatory agencies, and privatizing state functions—and develops propositions for their situational effectiveness. The effect is to undermine representative democracy. Available online for purchase or by subscription.

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  • Elsbach, Kimberly D. Organizational Perception Management. LEA’s Organization and Management Series. Mahwah, NJ: Lawrence Erlbaum, 2006.

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    An overview of the literature dealing with how organizations manage perceptions of themselves and their industries. Emphasizes how organizations use different means to shape the impressions of different stakeholders. Highly accessible and comprehensive account.

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  • Hillman, Amy J., Gerald D. Keim, and Douglas Schuler. “Corporate Political Activity: A Review and Research Agenda.” Journal of Management 30.6 (2004): 837–857.

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    A review of work since 1995, arranged in terms of the antecedents of corporate activity, the various types of such activities, how they are implemented, and outcomes (i.e., their effects on public policy and firm performance). Covers both US and non-US studies. Available online for purchase or by subscription.

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  • Holburn, Guy L. F., and Richard G. Vanden Bergh. “Making Friends in Hostile Environments: Political Strategy in Regulated Industries.” Academy of Management Review 33.2 (2008): 521–540.

    DOI: 10.5465/AMR.2008.31193554Save Citation »Export Citation »

    Focuses attention in how corporations target regulatory officials, and puts forward several hypothesis on the circumstances and conditions under which firms use direct versus indirect strategies.

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  • Lux, Sean, T. Russell Crook, and David J. Woehr. “Mixing Business with Politics: A Meta-analysis of the Antecedents and Outcomes of Corporate Political Activity.” Journal of Management 37.1 (2011): 223–247.

    DOI: 10.1177/0149206310392233Save Citation »Export Citation »

    A meta-analysis of two questions: (1) What factors influence firms to engage in corporate political activity and to what extent? (2) Does corporate political activity affect firm performance and to what extent? Identifies a number of key antecedents and concludes that corporate political activity does affect firm performance. Available online for purchase or by subscription.

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  • Oliver, Christine, and Ingo Holzinger. “The Effectiveness of Strategic Political Management: A Dynamic Capabilities Framework.” Academy of Management Review 33.2 (2008): 496–520.

    DOI: 10.5465/AMR.2008.31193538Save Citation »Export Citation »

    Proposes four strategies for managing the political environment: proactive, defensive, anticipatory, and reactive. Available online for purchase or by subscription.

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  • Siegel, Jordan. “Contingent Political Capital and International Alliances: Evidence from South Korea.” Administrative Science Quarterly 52.4 (2007): 621–666.

    DOI: 10.2189/asqu.52.4.621Save Citation »Export Citation »

    Interesting examination (contrary to the direction of most previous studies) of whether ties to political networks can be a significant liability. The paper finds that in South Korea, ties through elite sociopolitical networks to the regime in power increase the rate of cross-border strategic alliances, whereas ties to political enemies of the regime in power have the opposite effect. Hence, political change results in liabilities of political ties. Available online for purchase or by subscription.

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Organizational Corruption/Wrongdoing

The systematic study of corporate crime or malfeasance—illegal or morally reprehensible acts carried out on behalf of the organization—is a comparatively late interest of organization theorists, but one that is attracting increasing attention (Greve, et al. 2010; Palmer 2012). Research has focused on factors at the organizational, industry, and institutional levels that shape the incidence of corporate wrongdoing. Three primary antecedents have been identified (McKendall and Wagner 1997), which in combination increase the probability of corporate malfeasance: motivation, driven by organizational performance (Mishina, et al. 2010); opportunity, enabled by permissive governance structures and complex organizational structures that help conceal corruption; and choice, a willingness to exploit opportunities (Moore, et al. 2006). The role of the institutional context in constructing these three antecedents has also been highlighted (Misangyi, et al. 2008; Prechel and Morris 2010). Coffee 2006 shows that differences in national institutions shape the nature and beneficiaries of corporate corruption.

  • Coffee, John C., Jr. Gatekeepers: The Professions and Corporate Governance. Clarendon Lectures in Management Studies. Oxford: Oxford University Press, 2006.

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    Most studies of corporate corruption are of US corporations. This book points out that differences in national regulatory frameworks affect who is more likely to be involved in corporate corruption and the form that corruption will take.

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  • Greve, Henrich R., Donald Palmer, and Jo-Ellen Pozner. “Organizations Gone Wild: The Causes, Processes, and Consequences of Organizational Misconduct.” Academy of Management Annals 4.1 (2010): 53–107.

    DOI: 10.1080/19416521003654186Save Citation »Export Citation »

    Thorough and highly accessible overview of the literature on the organizational causes of misconduct. Distinguishes between types of misconduct (e.g., individual, organizational, interorganizational) and examines their causes (e.g., performance shortfalls, inappropriate governance controls) and their consequences. Available online for purchase or by subscription.

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  • McKendall, Marie A., and John A. Wagner III. “Motive, Opportunity, Choice, and Corporate Illegality.” Organization Science 8.6 (1997): 624–647.

    DOI: 10.1287/orsc.8.6.624Save Citation »Export Citation »

    Pulls together much of the literature and offers a clear model consisting of motivation, opportunity, and choice as the antecedents of corporate illegality. Available online for purchase or by subscription.

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  • Misangyi, Vilmos F., Gary R. Weaver, and Heather Elms. “Ending Corruption: The Interplay among Institutional Logics, Resources, and Institutional Entrepreneurs.” Academy of Management Review 33.3 (2008): 750–770.

    DOI: 10.5465/AMR.2008.32465769Save Citation »Export Citation »

    Draws on institutional theory to determine how corruption can be mitigated by proponents using appropriate logics. Available online for purchase or by subscription.

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  • Mishina, Yuri, Bernadine J. Dykes, Emily S. Block, and Timothy G. Pollock. “Why ‘Good’ Firms Do Bad Things: The Effects of High Aspirations, High Expectations, and Prominence on the Incidence of Corporate Illegality.” Academy of Management Journal 53.4 (2010): 701–722.

    DOI: 10.5465/AMJ.2010.52814578Save Citation »Export Citation »

    Most studies anticipate that poorly performing firms are more likely to act illegally in an effort to survive. This paper, in contrast, proposes that high-performing organizations can become trapped by their success and slip into misbehavior. Available online for purchase or by subscription.

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  • Moore, Don A., Philip E. Tetlock, Lloyd Tanlu, and Max H. Baserman. “Conflicts of Interest and the Case of Auditor Independence: Moral Seduction and Strategic Issue Cycling.” Academy of Management Review 31.1 (2006): 10–29.

    DOI: 10.5465/AMR.2006.19379621Save Citation »Export Citation »

    Financial scandals inevitably raise questions concerning the role of auditors. This paper notes the failure of audit firms to act independently of their clients and offers two explanations: moral seduction—that is, incremental growth of unawareness by professionals of their deepening moral compromising, and issue cycling—that is, the ebb and flow of wider societal (especially political) attention to issues. Available online for purchase or by subscription.

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  • Palmer, Donald. Normal Organizational Wrongdoing. Oxford: Oxford University Press, 2012.

    DOI: 10.1093/acprof:oso/9780199573592.001.0001Save Citation »Export Citation »

    Drawing from an extensive analysis of well-publicized instances of corporate wrongdoing, the author identifies and appraises eight explanations that have been proposed. This highly accessible account concludes with a persuasive discussion of practical implications.

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  • Prechel, Harland, and Theresa Morris. “The Effects of Organizational and Political Embeddedness on Financial Malfeasance in the Largest U.S. Corporations: Dependence, Incentives, and Opportunities.” American Sociological Review 75.3 (2010): 331–354.

    DOI: 10.1177/0003122410372229Save Citation »Export Citation »

    Connects corporate malfeasance that occurred between 1995 and 2004 in the United States to neoliberal policies that provided greater opportunities for them to occur. Thus, dependence on capital markets and prioritizing of shareholder value push organizations toward these acts, and opportunities are provided by political embeddedness. An indictment of late-20th-century public policy. Available online for purchase or by subscription.

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