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Management Organization Theory
by
Royston Greenwood, Bob Hinings, John Amis
  • LAST REVIEWED: 01 March 2021
  • LAST MODIFIED: 23 June 2021
  • 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. Recently, organization theorists have been applying their insights to “grand challenges” and in making an impact on practice (see online). 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 2021, Jones 2010), or adopt a particular approach (see, e.g., Hatch 2018). 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).

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 of 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), the Journal of Management Studies, and Organization Theory. 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. Other handbooks that deal with particular theoretical perspectives (e.g., organizational insitutionalism) or topics (e.g., change) are provided in later sections.

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.

Thematic Collection

An increasingly important outlet for themes and developments in organization theory is the annual series Research in the Sociology of Organizations. A more recent collection is the Cambridge University Press Elements in Organization Theory. The series is primarily a digital product combining the features of books and journals. A five-volume collection from SAGE (Greenwood 2012) includes the most cited works in institutional theory, arranged by subthemes.

  • Cambridge Elements in Organization Theory. Cambridge, UK: Cambridge University Press, 2018–.

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    Each text is available in digital or book format and deals with a particular theme, such as organization theory (e.g., Charlene Zietsma, Madeline Toubiana, Maxim Voronov, and Anna Roberts, Emotions in Organization Theory; Donald Palmer and Valerie Feldman, Comprehending the Incomprehensible: Organization Theory and Child Sex Abuse in Organizations) or stakeholder theory (e.g., R. Edward Freeman, Jeffrey S. Harrison, and Stelios C. Zyglidopoulos, Stakeholder Theory: Concepts and Strategies).

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  • Greenwood, Royston, ed. Institutional Theory in Organization Studies. 5 vols. Los Angeles: SAGE, 2012.

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    The five volumes contain fifty-seven papers arranged by themes: beginnings, elaborations, legitimacy, isomorphism and diffusion, logics and language, institutional entrepreneurship and change, relections and new directions.

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  • 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. Many other divisions within the Academy are relevant to organization theory scholars. 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 (Hinings and Meyer 2018). 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). In addition, Philip Selznick (Selznick 1949, Selznick 1957) has had a lasting impact with his ideas of organizations being diverted from their stated purposes and also of organizations being infused with values, and leaders as the custodians of those values. 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 » Share 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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  • Hinings, C. R., and Renate E. Meyer. Starting Points: Intellectual and Institutional Foundations of Organization Theory. Cambridge, UK: Cambridge University Press, 2018.

    DOI: 10.1017/9781108671286Save Citation »Export Citation » Share Citation »

    Provides a succinct yet comprehensive account of the early decades of organization theory. Introduces readers to the intellectual concerns of European and North American scholars (what did they examine and why?), and the emergence of today’s insitutions (e.g., business schools, journals, and associations).

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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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  • Selznick, Philip. TVA and the Grass Roots. Berkeley: University of California Press, 1949.

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    Studying an important organization of Roosevelt’s New Deal, Selznick showed that organizations were often driven away from their stated purposes and values, and the implicated organizational form.

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  • Selznick, Philip. Leadership in Administration. New York: Harper & Row, 1957.

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    Shows that organizations are infused with values and leaders are the custodians of those values.

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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 adds 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), enabled by new methods (Davis, et al. 2009).

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

    DOI: 10.1093/acprof:oso/9780198288787.001.0001Save Citation »Export Citation » Share 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 Press, 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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  • Davis, Jason P., Kathleen M. Eisenhardt, and Christopher B. Bingham. “Optimal Structure, Market Dynamism, and the Strategy of Simple Rules.” Administrative Science Quarterly 54.3 (2009): 413–452.

    DOI: 10.2189/asqu.2009.54.3.413Save Citation »Export Citation » Share Citation »

    Using computational and mathematical modeling, the authors explore the tension between too little and too much structure that is shaped by the core tradeoff between efficiency and flexibility in dynamic environments. The aim is to develop a more precise theory of the fundamental relationships among structure, performance, and environment.

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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.

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    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 Press, 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 » Share 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 » Share 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 » Share 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 and Fiss 2011 suggest 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 » Share 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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  • Fiss, Peer C. “Building Better Causal Theories: A Fuzzy Set Approach to Typologies in Organization Research.” Academy of Management Journal 54.2 (2011): 393–420.

    DOI: 10.5465/amj.2011.60263120Save Citation »Export Citation » Share Citation »

    Drawing on data from high technology firms, the author applies fuzzy set qualitative comparative analysis to the Miles and Snow typology in order to show the potential contribution of the methods to understanding causal processes.

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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.

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    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 » Share 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 » Share 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 » Share 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 » Share 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; Lavie, et al. 2010).

  • 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 » Share 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 » Share 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 » Share 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 » Share 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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  • Lavie, Dovie, Uriel Stettner, and Michael L. Tushman. “Exploration and Exploitation within and across Organizations.” Acdemy of Management Annals 4.1 (2010): 109–155.

    DOI: 10.5465/19416521003691287Save Citation »Export Citation » Share Citation »

    An award-wining paper that reviews the considerable literature on March’s framework of exploration and exploitation. Shows how the exploration-exploitation notion connects to organizational learning, organzational design, and knowledge management and adaptation. Although not referred to in this paper, it also resonates with paradox theory.

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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 » Share 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 » Share 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 (for a review, see Argote, et al. 2020). An important line of work looks at learning curves (e.g., Argote 2013) 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, performance, 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). An extensive literature, summarized and reviewed in Audia and Greve 2021, focuses on organzational responses and nonreponses to performance, i.e., performance is the critical trigger for organizational learning to occur.

  • Argote, Linda. Organizational Learning: Creating, Retaining, and Transferring Knowledge. 2d ed. New York: Springer, 2013.

    DOI: 10.1007/978-1-4614-5251-5Save Citation »Export Citation » Share Citation »

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

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  • Argote, Linda, Sinkee Lee, and Jisoo Park. “Organizational Learning Processes and Outcomes: Major Findings ad Future Research Directions.” Management Science (2020): Forthcoming.

    DOI: 10.1287/mnsc.2020.3693Save Citation »Export Citation » Share Citation »

    The trend is that organizational learning declines over time—but not for all organizations. To analyze this variation, the authors separate lerning processes into four processes and present research on how dimensions of experience and the organizational context affect learning processes and outcomes. Available online by subscription.

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  • Audia, Pino G., and Henrich R. Greve. Organizational Learning from Performance Feedback: A Behavioral Perspective on Multiple Goals. Cambridge, UK: Cambridge Univiersity Press, 2021.

    DOI: 10.1017/9781108344289Save Citation »Export Citation » Share Citation »

    Begins with the original Cyert and March 1963 (cited under Behavioral Theory of the Firm) thesis of organizational learning driven by organizational performance but sets out several elaborations. The authors also add that the motivation to learn might be driven not only by a performance orientation but also by a desire to maintain a positive image (self-enhancement orientation).

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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 » Share 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 » Share 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 » Share 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 » Share 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.

    DOI: 10.5465/amr.2002.6587995Save Citation »Export Citation » Share Citation »

    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).). Rogan and Greve 2015 examines power and exchange to give a more dynamic account of resource dependence. 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.

    DOI: 10.2189/asqu.2005.50.2.167Save Citation »Export Citation » Share Citation »

    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 » Share 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 » Share 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.

    DOI: 10.5465/amr.1991.4279002Save Citation »Export Citation » Share Citation »

    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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  • Rogan, Michelle, and Henrik Greve. “Resource Dependence Dynamics: Partner Reactions to Mergers.” Organization Science 26.1 (2015): 239–255.

    DOI: 10.1287/orsc.2014.0897Save Citation »Export Citation » Share Citation »

    Argues that research on resource dependence typically takes a static view in which actions and outcomes are determined structurally. A dynamic view of power and exchange is required. but not as responses to the actions of the counterparty in an exchange relation. Shows that power dynamics are at work by examining how mergers of organizations trigger responses from their common exchange partners.

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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 » Share Citation »

    Comprehensive review both of the traditional and of the 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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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 also 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 (see section on Hybrid Organizations and Social Enterprises) 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 movements. 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 and Social Enterprises). Other extensions of the institutional perspective include practice-driven institutionalism, the microfoundations of institutions, institutional infrastructures, community influences, the role of meaning, emotions, the material and visual aspects of insitutional processes, and categories. There is, too, a growing focus upon how institutional practices affect important social issues, such as economic inequality and social diversity, organizational wrongdoing, the natural environment, and race (Greenwood, et al. 2017).

  • 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 » Share 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 » Share 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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  • Greenwood, Royston, Christine Oliver, Thomas B. Lawrence, and Renate E. Meyer, eds. The SAGE Handbook of Organizational Institutionalism. 2d ed. London: SAGE. 2017.

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    This second edition contains not only updated chapters of the 1st edition but also fourteen new chapters that probe more recent concerns (such as hybrid organizations, the play of emotions and of visual artifacts) and, also, the consequences of institutional arrangements for social issues, such as inequality (see Grand Challenges).

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  • Kraatz, Matthew S., and Emily S. Block. “Organizational Implications of Institutional Pluralism.” In The SAGE Handbook of Organizational Institutionalism. 1st ed. 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 » Share 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.

    DOI: 10.5465/amr.1991.4279002Save Citation »Export Citation » Share Citation »

    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 » Share 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 » Share Citation »

    A very early application of isomorphism. The authors examine the spread of civil service reform and observe that early adopters did 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: 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. Young 1988 provides a strong critique of the foundations of population ecology, arguing particularly against several of the theory’s normative assumptions and core concepts. For example, the author points to the problems of determining the boundaries of a niche of organizational activity, the “birth” of new species of organizations, the lack of precision in what constitutes inertia and change, and the inability of the theory to account for organizations being able to change environments and resource bases in ways that plants and animals cannot. Other 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). While much less attention has been given to organizational ecology theory in recent years, work in the area continues. A recent example is Ljubownikow and Ang 2020, which investigates the relationships among intensity of competition, diversification, and performance among UK manufacturing firms.

  • 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 » Share 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 » Share 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 » Share 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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  • Ljubownikow, Grigorij, and Siah Hwee Ang. “Competition, Diversification and Performance.” Journal of Business Research 112 (2020): 81–94.

    DOI: 10.1016/j.jbusres.2020.03.002Save Citation »Export Citation » Share Citation »

    Presents a study that uses an organizational ecology-based conceptualization of firm-level competition to assess the relationships among competition intensity, related and unrelated diversification strategies, and firm performance. Using a sample drawn from UK manufacturing firms, the authors suggest that higher levels of competitive intensity are associated with more unrelated diversification, and that firms that adopt such a diversification strategy perform better in these conditions than those that do not.

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  • Young, Ruth C. “Is Population Ecology a Useful Paradigm for the Study of Organizations?” American Journal of Sociology 94.1 (1988): 1–24.

    DOI: 10.1086/228949Save Citation »Export Citation » Share Citation »

    Presents a critique of population ecology, arguing that in fact the theory is “not useful for the study of organizations.” This conclusion is based on the argument that the theory’s central concepts, which have been established in the study of plants and animals, cannot be precisely enough applied to the study of organizations to make the theory useful.

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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 in the governance of transactions? Further, 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 through a series of books and articles (see Williamson 1975, Williamson 1981, Williamson 2005). According to Wiliamson’s transaction cost theory (TCE), transactions are not frictionless but 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 (see also Hennart 1991, Nickerson and Silverman 2003). Thus, TCE is dedicated to determining if such exchanges are better governed within a firm, through an open market, or with some hybrid combination of the two. 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 has been, criticized, such as for its narrow conception of human nature and particularly its neglect of social embeddedness (see, e.g., Nahapiet and Ghoshal 1998), but it continues to receive enduring interest and support from scholars. A recent review, Cuypers, et al. 2021 explains the broadening interest in TCE across social science disciplines and suggests a need to engage with the international business, strategy, sociology, and psychology literatures in order to realize theoretical extensions. In this way, the authors suggest, transaction cost theory will be well positioned to address issues thrown up by technological advancements, such as a shift to platform ecosystems, that have new exchange governance implications, and also inform understanding of non-economic issues raised by, for example, Grand Challenges, nationalism, sustainability, and public-private partnerships.

  • Cuypers, Ilya R. P., Jean-François Hennart, Brian S. Silverman, and Gokhan Ertug. “Transaction Cost Theory: Past Progress, Current Challenges and Suggestions for the Future.” Academy of Management Annals 15.1 (2021): 111–150.

    DOI: 10.5465/annals.2019.0051Save Citation »Export Citation » Share Citation »

    Critically assesses the logic underpinning transaction cost theory drawing on insights from multiple fields, most notably international management and strategy. Suggests a need for greater engagement with other social science disciplines and provides an agenda for future research across a range of pressing societal issues.

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  • 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 » Share 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 » Share 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 » Share 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.

    DOI: 10.2307/259373Save Citation »Export Citation » Share Citation »

    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 » Share 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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  • Williamson, Oliver E. Markets and Hierarchies: Analysis and Antitrust Implications. New York: Macmillan, 1975.

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    In one of his most important works, Williamson provides a critical analysis of firm governance and provides a framework of key parameters to assess whether economic transactions can be more efficiently carried out within the boundaries of the firm or on the open market.

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  • Williamson, Oliver E. “The Economics of Organization: The Transaction Cost Approach.” American Journal of Sociology 87.3 (1981): 548–577.

    DOI: 10.1086/227496Save Citation »Export Citation » Share Citation »

    Here Williamson elaborates on when transactions should be carried out inside the firm, which outside, and why. Examines the organization of “human assets” and their deployment as a key determinant in understanding firm governance efficiency.

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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 » Share 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 extensive and continues to be popular. Elaborations of agency theory have been developed, often by utilizing insights from other theories and relaxing agency theory’s strict economic assumptions to try to improve the theory’s explanatory efficacy. Shi, et al. 2017, for example, overlays cognitive evaluation theory onto agency theory to examine how external monitoring and control influences ethical behavior by managers. The authors find that increased pressure from activist owners, the market, and securities analysts increases the likelihood of managers committing financial fraud. DesJardine and Shi 2021 also adopts a behavioral approach, extending the behavioral agency model to demonstrate how the relationship between risk taking and wealth type—current or prospective—depends on CEOs’ temporal focus.

Network Theory

The basic foundational premise of network theory is that economic activity occurs in a network of social relationships. Network theorists, therefore, seek to uncover and understand the relationships between organizations, or between subunits 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. While members of networks can benefit from enhanced access to resources, sources of legitimacy, and knowledge, they can also miss out on discovering opportunities outside the network. Interest in networks began with depictions of them as an aspect of context and thus as a determinant of organizational form. There has been considerable interest in these virtual, or network, organizations with Jones, et al. 1997 providing 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. As work in this area has proliferated, so we see how network theory has developed a distinctive language (Kilduff and Shipilov 2011). Further, explorations of networks have developed to better understand both their structure and formation and their impact on organizations and the people within them. With respect to the former, Tasselli, et al. 2015 show how the formation of social networks is a function of the “psychology of purposive individuals” and the organizational contexts in which they operate. An example of the latter is Woehler, et al. 2021, a recent review that reveals that men and women not only construct different networks but also that these networks have “unequal network characteristics” and “unequal network returns” that can explain different levels of career success (see also Grand Challenges).

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

    DOI: 10.4159/9780674029095Save Citation »Export Citation » Share Citation »

    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.

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    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.

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    Absolute classic. A must-read article 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 » Share Citation »

    Distinguishes between cooperation and coordination. The paper shows that the former has received more attention than 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 » Share 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 » Share 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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  • Tasselli, Stefano, Martin Kilduff, and Jochen I. Menges. “The Microfoundations of Organizational Social Networks: A Review and an Agenda for Future Research.” Journal of Management 41.5 (2015): 1361–1387.

    DOI: 10.1177/0149206315573996Save Citation »Export Citation » Share Citation »

    Considers three theoretical positions with respect to organizational social networks: that people shape networks, that networks form people, and that people and networks coevolve. Following a review of the literature, the authors conclude that networks and the people that form them can be understood only as mutually constituted, shaped by the organizational contexts within which they are embedded. Implications for future research are offered.

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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 » Share 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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  • Woehler, Meredith L., Kristin L. Cullen-Lester, Caitlin M. Porter, and Katherine A. Frear. “Whether, How, and Why Networks Influence Men’s and Women’s Career Success: Review and Research Agenda.” Journal of Management 47.1 (2021): 207–236.

    DOI: 10.1177/0149206320960529Save Citation »Export Citation » Share Citation »

    Suggest that the networks formed by men and women are similar in structure but differ in composition. As a consequence, they contend that the “unequal network characteristics” and “unequal network resources” that differentiate some men’s and women’s networks can explain differences in career success.

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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 (see Grand Challenges, Corporate Political Activity, and Power, Politics, and Conflict). 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 » Share 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 » Share 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.

    DOI: 10.2307/2391741Save Citation »Export Citation » Share Citation »

    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 » Share 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 » Share 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). Interest in organizational identity has grown significantly over the past two decades and has influenced research on a variety of topics (for a review, see Pratt, et al. 2016).

  • 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 » Share 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 » Share 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.

    DOI: 10.2307/259263Save Citation »Export Citation » Share Citation »

    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.

    DOI: 10.5465/amr.2000.2791601Save Citation »Export Citation » Share Citation »

    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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  • Pratt, Michael G., Majken Schultz, Blake E. Ashforth, and Davide Ravasi, eds. The Oxford Handbook of Organizational Identity. New York: Oxford University Press, 2016.

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    A comprehensive and informative review—“roadmap” in the editors’ words—of what has happened in the previous three decades, and “of what may happen in the next 30 and beyond.” The seven sections deal with: mapping the identity of the field, critical perspectives, integrative models, how individuals relate to organzational identity, sources and processes of organizational identity, organzational identity and the environment, and imlications.

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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 » Share Citation »

    Longitudinal study of environmental changes that pushes 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). Recent work in this tradition has examined how managerial cognition affects firms’ decisions to internationalize (Maitland and Sammartino 2015). 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). There is also a more psychologically based approach to managerial and organizational cognition (cf., Galavan, et al. 2017).

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

    DOI: 10.2307/257995Save Citation »Export Citation » Share Citation »

    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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  • Galavan, Robert J., Kristian J. Sund, and Gerard P. Hodgkinson, eds. Methodological Challenges and Advances in Managerial and Organizational Cognition. Bingley, UK: Emerald, 2017.

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    A series of essays on methods for studying managerial and organizational cognition from a psychological perspective. It is part of a series titled New Horizons in Managerial and Organizational Cognition.

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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 » Share 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 » Share 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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  • Maitland, Elizabeth, and André Sammartino. “Managerial Cognition and Internationalization.” Journal of International Business Studies 46 (2015): 733–760.

    DOI: 10.1057/jibs.2015.9Save Citation »Export Citation » Share Citation »

    An examination of how managerial cognitive processes are a crucial micro-foundation for understanding how decisions are made, in this case with regard to going international. The study demonstrates considerable heterogeneity in mental models used.

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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 » Share 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 » Share 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 » Share 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 Theory

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 sensemaking 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. Another recent article reviews Weick’s approach to sensemaking and explores how it has evolved and the implications for sensemaking as organizing (Glynn and Watkiss 2020).

  • 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 » Share 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 » Share 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.

    DOI: 10.2307/258903Save Citation »Export Citation » Share Citation »

    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 » Share 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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  • Glynn, Mary-Ann, and Lee Watkiss. “Meaning and Back Again in a Half-Century of Weick’s Theorizing.” Journal of Management Studies 57.7 (2020): 1331–1354.

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    The authors suggest that Weick’s thinking on sensemaking evolved from a linear to a more dynamic, interactive, and cyclical approach, summarized as “sensemaking as organizing.” The implication of this formulation are set out together with potential future research directions.

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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 » Share 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 » Share 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 » Share 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 » Share 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 sensemaking 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 » Share 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 » Share Citation »

    Important case study that illustrates Weick’s approach to sensemaking. Shows not only the criticality of sensemaking 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; Freeman, et al. 2018; Harrison, et al. 2019), 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, but stakeholder theory does not propose that all interests should be treated equally. The theory asks to which stakeholders management should be attentive, why, and with what consequences. 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). In line with this, recent research has further considered the implications of this more diverse understanding of stakeholders for organizations (see Governance for related discussion of potential consequences in this area). Barney 2018, for example, has considered how a broader consideration of stakeholders can and should be incorporated into a firm’s strategic positioning in general and a resource-based view of profit appropriation in particular. McGahan 2020 also considers a fundamental issue that needs to be resolved by theorists if we are to more fully embrace a more diverse stakeholder theory: how to determine which stakeholders have legitimate claims on an organization and which do not, something that McGahan laments was neglected by early stakeholder research.

  • Barney, Jay B. “Why Resiurce-Based Theory’s Model of Profit Appropriation Must Incorporate a Stakeholder Perspective.” Strategic Management Journal 39.13 (2018): 3305–3325.

    DOI: 10.1002/smj.2949Save Citation »Export Citation » Share Citation »

    Argues that the assumption that shareholders are a firm’s only “residual claimants” is inconsistent with the resource-based theory. Thus there is a requirement that a broader stakeholder perspective must be incorporated into the theory. Article discusses some of the empirical and theoretical implications of this. A particular expression of stakeholder theory links it to the management of stigma (see Hersel, et al. in Stigma).

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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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  • Freeman, R. Edward, Jeffrey S. Harrison, and Stelios Zyglidpoulos. Stakeholder Theory: Concepts and Strategies. Cambridge, UK: Cambridge University Press, 2018

    DOI: 10.1017/9781108539500Save Citation »Export Citation » Share Citation »

    Discusses the concepts of stakeholder management and the advantages this approach provides to firms and their managers. The authors present a number of tools that managers can use to implement stakeholder thinking, better understand stakeholders, and create value with and for them.

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

    DOI: 10.2307/259074Save Citation »Export Citation » Share Citation »

    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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  • Harrison, Jeffrey S., Jay B. Barney, R. Edward Freeman, and Robert A. Phillips. The Cambridge Handbook of Stakeholder Theory. Cambridge, UK: Cambridge University Press, 2019.

    DOI: 10.1017/9781108123495Save Citation »Export Citation » Share Citation »

    Contains papers arranged into four sections dealing with: theoretical foundations of stakeholder theory, stakeholder theory and society, stakeholder theory in the business disciplines, and stakeholder theory in education and practice.

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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 » Share 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 » Share 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 » Share 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 » Share 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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  • McGahan, Anita. “Where Does an Organization’s Responsibility End? Identifying the Boundaries of Stakeholder Claims.” Academy of Management Discoveries 6.1 (2020): 8–11.

    DOI: 10.5465/amd.2018.0218Save Citation »Export Citation » Share Citation »

    Argues that a vital, yet unresolved, issue for stakeholder theory is understanding which stakeholders have legitimate claims on an organization and which do not. Considers the implications for this and suggests some avenues for future research.

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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.

    DOI: 10.5465/amr.1997.9711022105Save Citation »Export Citation » Share Citation »

    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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Imprinting Theory

Imprinting is the idea that current organizational states are a reflection of historical experiences. The basic idea is that, characteristics, such as values, strategies, and organizational arrangements, that are established at the moment of founding persist, even for decades, despite changes in the environments and circumstances in which organizations operate (Stinchcombe 1965). Imprinting has been explored at multiple levels of analysis (e.g., industries, individual organizations, individual performance, and communities of organizations). For reviews, see Marquis and Tilcsik 2013; Simsek, et al. 2015). Imprinting is not just that history matters. On the contrary, important aspects distinguish it from more-general ideas of historical influences (Mahoney 2000; see also Organizational History). Empirical studies have explored contextual (e.g., the imprint of socialist values in China: the availability of technology netwprks) and internal (e.g., founding teams) sources of imprints (Kriauciunas and Kale 2006; (Beckman and Burton 2008, Marquis, 2003, Marquis and Qiao 2020, Johnson 2007) and the process by which they are stamped on an organization and reproduced. Imprinting has also been addressed as insitutional legacies (Greve and Rao 2014).

  • Beckman, Christine M., and M. Diane Burton. “Founding the Future: Path Dependence in the Evolution of Top Management Teams from Founding to IPO.” Organization Science 19.1 (2008): 3–24

    DOI: 10.1287/orsc.1070.0311Save Citation »Export Citation » Share Citation »

    Shows how initial decisions on founding management teams constrain subsequent decisions.

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  • 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 » Share 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 relation

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  • Johnson, Victoria. “What Is Organizationl Imprinting? Cultural Entrepreneurship in the Founding of the Paris Opera.” American Journal of Sociology 113.1 (2007): 97–127.

    DOI: 10.1086/517899Save Citation »Export Citation » Share Citation »

    Looks at the early stage of imprinting, i.e., how elements from the social context at the time of founding are selectively incorporated and imprinted into an organization. Shows the tension between creativity and environmental constraint at these early moments, which the author terms “cultural entreprenurship.”

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  • Kriauciunas, Aldras, and Prashant Kale. “The Impact of Socialist Imprinting and Search on Resource Change: A Study of Firms in Lithuania.” Strategic Management Journal 27.7 (2006): 659–679.

    DOI: 10.1002/smj.537Save Citation »Export Citation » Share Citation »

    Examines factors that influenced the ability of organizations to change when faced with a move from a socialist-oriented economic environment to a context that is more market oriented. Shows the socialist imprint aversely affected the capability to respond.

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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 » Share 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 » Share 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 Kunyuan Qiao. “Waking from Mao’s Dream: Communist Ideological Imprinting and the Internationalization of Entrepreneurial Ventures in China.” Administrative Science Quarterly 65.3 (2020): 795–830.

    DOI: 10.1177/0001839218792837Save Citation »Export Citation » Share Citation »

    Theorizes how an ideological imprint serves as an information filter. Shows how an imprint affects organizational decisions and understandings, but also how and why imprints might decay.

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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 » Share 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 » Share 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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Paradox Theory

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; Smith, and Besharov 2019). 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). A wider connection of the paradox perspective to other organization theories is provided in Smith, et al. 2017. Hargrave and Van de Ven 2017 contrasts and then pulls together dialectical and paradox perspectives. Suggestions for how to empirically study paradoxes are provided in Jarzabkowksi, et al. 2019.

  • 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 » Share Citation »

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

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  • Hargrave, Timothy J., and Andrew Van de Ven. “Integrating Dialectical and Paradox Perspectives on Managing Contradictions in Organizations.” Organization Studies 38.3–4 (2017): 319–339.

    DOI: 10.1177/0170840616640843Save Citation »Export Citation » Share Citation »

    Compares the dialectical and paradox approaches to managing contradictions in organizations and pulls them together through a process model that combines assimilation and adjustment.

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  • Jarzabkowksi, Paula, Rebecca Bednarek, Konstantinos Chalkias, and Eugenia Cacciatori. “Exploring Inter-organizational Paradoxes: Methodological Lessons from a Study of Grand Challenges.” Strategic Organization 17.1 (2019): 120–132.

    DOI: 10.1177/1476127018805345Save Citation »Export Citation » Share Citation »

    Discusses ways by which paradoxes can be emprically traced and observed. Proposes three analytical techniques: zooming in and out, tracking problematization, and tracking boundaries and boundary organizations.

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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 » Share Citation »

    This article develops a process model of navigating such paradoxes: in sensemaking 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: 10.5465/19416521003691287Save Citation »Export Citation » Share 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.

    DOI: 10.2307/259204Save Citation »Export Citation » Share Citation »

    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 » Share 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 Marya L. Besharov. “Bowing before Dual Gods: How Structured Flexibility Sustains Organizational Hybridity.” Administrative Science Quarterly 64.1 (2019): 1–44.

    DOI: 10.1177/0001839217750826Save Citation »Export Citation » Share Citation »

    Looks at how organzations grapple with hybridity—the combination of identities, forms, and logics that typically do not go together. Identifies two features that enable sustainable hybridity —“paradoxical frames” and “guardrails” —that enable ongoing adaptation in meanings and practices in the face of hybridity.

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  • Smith, Wendy K., Paula Jarzabkowksi, Marianne W. Lewis, and Ann Langley, eds. Oxford Handbook of Organization Paradox. Oxford: Oxford University Press, 2017.

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    This handbook depicts how paradox studies inform, and are informed, by other theoretical perspectives, while creating a resource that enables scholars to learn about and apply this lens across varied organizational phenomena. In doing so, the handbook offers insights to scholars across organizational theory.

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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 » Share Citation »

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

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Practice Theory

“Practice theory” has grown in significance in recent decades but definitions of what constitutes a “practice” vary (for a review, see Nicolini 2012). Essentially, the practice approach seeks to understand how organizational actions are performed, enabled, maintained, and adapted through complex bundles of routinized practices. It emphasizes not individual actions but the embedded nature of human behaviors and gives attention to socio-material and emotional as well as discursive phenomena. The practice perspective, thus, focuses not just on the doing of work but also on the “shared practical understanding” that gives work meaning and makes it robust. The incorporation of practice theory into organization and management theory has primarily used the term “strategy-as-practice” (for reviews, see Vaara and Whittington 2012 and Golsorkhi, et al. 2015. A related application connects the practice lens to the agenda of institutional theory (for a review, see Smets, et al. 2017)—notably to institutional logics, hybridity, and complexity (e.g., Smets, et al. 2012; Smets, et al. 2015; Lounsbury, et al. 2021) and also organizational/institutional change (e.g., Reay, et al. 2013; Kellogg 2019). Some studies complement the practice perspective but do not draw explicitly upon that literature—emphasizing, instead, microfoundations or inhabited institutions (e.g., Kellogg 2019; Reay, et al. 2013).

  • Golsorkhi, Damon, Linda Rouleau, David Seidl, and Eero Vaara. “Introduction: What is Strategy-as-Practice?” In Cambridge Handbook of Strategy as Practice. 2d ed. Golsorkhi, et al., eds. Cambridge, UK: Cambridge University Press, 2015.

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    Provides a succinct yet informative overview of the origins of the strategy as practice perspective, and of the research agenda that has occupied most attention thus far. Although the title of the Handbook focuses upon ‘strategy as practice’, this introduction shows how this literature connects with organization studies more generally.

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  • Kellogg, Katherine C. “Subordinate Activation Tactics: Semi-professionals and Micro-level Institutional Change in Professional Organizations.” Administrative Science Quarterly 64.4 (2019): 928–975.

    DOI: 10.1177/0001839218804527Save Citation »Export Citation » Share Citation »

    Examines the attempts by two hospitals to introduce micro-level changes in professional practices. Identifies how change was successfully accomplished in one hospital but not the other. Emphasizes the important role of subordinate semi-professionals and how that role can be activated in order to change entrenched practices.

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  • Lounsbury, Michael, Deborah A. Anderson, and Paul Spee. “On Practice and Institution.” In On Practice and Institution: New Empirical Directions. Research in the Sociology of Organizations 71. Bingley, UK: Emerald, 2021.

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    Explicitly looks at the interface of practice and institution in organization studies. Shows the range of research questions and new directions spurred by the attention given to the practice perspective. Gives special attention to the connection of practices to institutional logics, showing how that connection promises to advance understanding of organizational and societal dynamics.

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  • Nicolini, Davide. Practice Theory, Work, and Organization: An Introduction. Oxford: Oxford University Press. 2012

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    The author acknowledges that “practice theory” and several of its core terms, including “practice,” are used in very different ways in the literature. The text reviews six different approaches to practice theory. The analysis connects to organization theory but speaks to the broader social science community.

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  • Reay, Trish, Samia Chreim, Karen Golden‐Biddle, et al. “Transforming New Ideas into Practices: An Activity-Based Perspective on the Institutionalization of Practices.” Journal of Management Studies 50.6 (2013): 963–990.

    DOI: 10.1111/joms.12039Save Citation »Export Citation » Share Citation »

    Looks at changes in practices in four health-care organizations over a period of six years. The central question is how new ideas accepted by managers at the organizational level can be transformed into new frontline practices. The findings reveal that both macro- and micro-level processes are necessary and identifies the mechanisms deployed through micro-level theorizing that provides understanding of the ideas, encourages professionals to try the new ideas, and then facilitates a collective meaning-making by reconnecting the new practices into the organizational context.

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  • Smets, Michael, Angela Aristidou, and Richard Whittington. “Towards a Practice–Driven Institutionalism.” In The SAGE Handbook of Organizational Institutionalism. 2d ed. Edited by Greenwood Royston, Christine Oliver, Thomas B Lawrence, and Renate E. Meyer, 365–391. Thousand Oaks, CA: SAGE. 2017.

    DOI: 10.4135/9781446280669.n15Save Citation »Export Citation » Share Citation »

    The authors propose that adoption of the practice perspective reconnects institutional theory to its intellectual heritage and, in doing so, provides insights on contemporary issues of organizing and work. In particular, the authors show how a practice approach contributes to theorizing of institutional logics, institutional complexity, and institutional work.

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  • Smets, Michael, Paula Jarzabkowski, Gary T. Burke, and Paul Spee. “Reinsurance Trading in Lloyd’s of London: Balancing Conflicting-yet-Complementary Logics in Practice.” Academy of Management Journal 58.3 (2015): 932–970.

    DOI: 10.5465/amj.2012.0638Save Citation »Export Citation » Share Citation »

    Using the practice lens, the authors examine how individuals in Lloyds of London manage competing logics during everyday work. They provide a dynamic understanding of how institutional complexity is experienced and how the tensions are flexibly balanced through a constellation of three mechanisms. Emphasizes how practices “enact and reproduce the general understanding or logic from which they draw meaning” (p. 936).

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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 » Share Citation »

    The authors define practices as patterns of activities that are given thematic coherence by shared meanings and understandings. The study emphasizes that shared “local” understandings are informed by broader cultural frameworks, i.e., by overarching institutional logics. The authors develop a model of practice-driven institutional change, showing how and why change that originates in the everyday work of individuals may result in a shift in field-level logic.

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

    DOI: 10.5465/19416520.2012.672039Save Citation »Export Citation » Share Citation »

    This review of the Strategy-as-Practice literature begins with an overview of theories of practice, followed by a review of research and findings, and then offers directions for future research.

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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.

Organizational Design

Organization design—or organizational form as it is sometimes now termed—is a central and longstanding concern of organization theorists. Studies of design have taken two primary approaches. The earliest approach, which underpins both structural contingency theory and configuration theory and 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 organization design—or “structure” as it was termed—as an organization’s formal 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. Indeed, much of the origins of organization theory are to be found in the study of the structure of bureaucracies. Dimensions of structure are used in Pugh, et al. 1969 and Mintzberg 1983 (cited under Configuration Theory / Archetype Theory) to classify organizations, something which is very similar to the approaches of the organization design school. While not directly labeled as organization design, students of structure as it evolved into contingency and configuration theory were very much concerned with how particular kinds of organizations were suitable for particular environments, scale, and tasks. The second approach goes beyond structure, as exemplified by Burton, et al. 2006a and Burton, et al. 2006b, which are concerned with the aggregation of formal structures of accountability and responsibility and also the human resource practices and information and decision processes that activate those structures and the development and implementation of strategies that underlie them. The authors classify organizational designs as functional, divisional, and matrix structures. At the heart of both approaches 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. 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, et al. 2017, 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 recognition of the complexity of organizational arrangements. 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 Press, 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., 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, 2006a.

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

    DOI: 10.1017/CBO9780511812415Save Citation »Export Citation » Share 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 School 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: 10.5465/19416520903047533Save Citation »Export Citation » Share 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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  • Pugh, Derek S., David J. Hickson, and C. R. Hinings. “An Empirical Taxonomy of Structures of Work Organizations.” Administrative Science Quarterly 14.1 (1969): 115–126.

    DOI: 10.2307/2391367Save Citation »Export Citation » Share Citation »

    By analyzing how dimensions of structure cohere in different ways, four different types of organizations are derived: full bureaucracy, workflow bureaucracy, personnel bureaucracy, and implicitly structured. They are related to different combinations of size, technology, and ownership.

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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 » Share 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 » Share 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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Organization Environments

The relationship between organizations and their environment is a central theme running through organization theory (Scott and Davis 2007). At the heart of this approach is the idea of the organization as an open system interdependent with its environment. Organizations are set in environments and adapt to and change those environments (Hinings and Greenwood 2017). 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 » Share 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 » Share 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 » Share Citation »

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

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  • Hinings, C. R. (Bob), and Royston Greenwood. “The Opening Up of Organization Theory: Open Systems, Contingency Theory, and Organizational Design.” In The Oxford Handbook of Management. Edited by Adrian Wilkinson, Steven J. Armstrong, and Michael Lounsbury, 127–144. Oxford: Oxford University Press, 2017.

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    This chapter explores the history of an open-systems approach in the study of management and organizations and reviews its current status. Open-systems theory marked a move from a concern with the organization per se to a concern with the interdependence of an organization with its environment.

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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 » Share 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 » Share 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. More recently, interest in interorganizational relationships has taken a new turn. One is to examine “the dark side” of such relationships (Oliviera and Lumineau 2019). It draws attention to the negative and detrimental outcomes of interorganizational relationships. Another is to deal with the burgeoning interest in ecosystems (Shipilov and Gawer 2020). Ecosystems emphasize relative lack of hierarchy and central control but are a form of interorganizational networks.

  • 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 » Share 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 » Share 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 » Share 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 » Share 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.

    DOI: 10.2307/258156Save Citation »Export Citation » Share Citation »

    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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  • Oliviera, Nuno, and Fabrice Lumineau. “The Dark Side of Interorganizational Relationships: An Integrative Review and Research Agenda.” Journal of Management 45.1 (2019): 231–261.

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    This article maps the main findings on the antecedents, consequences, and moderating factors of dark-side manifestations in interorganizational relationships. The authors present a research agenda to advance theory on the manifestation characteristics, the entities and their motivations, the temporality issues, and the positive outcomes of dark-side manifestations.

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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 » Share 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 » Share 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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  • Shipilov, Andrew and Annabelle Gawer. “Integrating research on interorganizational networks and ecosystems.” Academy of Management Annals 14.1 (2020): 92-121.

    DOI: 10.5465/annals.2018.0121Save Citation »Export Citation » Share Citation »

    Organizations are simultaneously embedded in interorganizational networks and ecosystems, yet research on networks and ecosystems developed in isolation. The aim of this partial integration is to bring new energy into maturing research on organizational networks and greater structure to the burgeoning research on ecosystems by examining similarities and differences between networks and ecosystems.

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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 » Share 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 Routines

The importance of understanding organizational routines was recognized early in organizational theory, and figured prominently in the Carnegie School. Routines played a key role in Simon’s analysis of how decisions are made under conditions of constraint (see Decision Making), while Cyert and March 1963 (cited under Behavioral Theory of the Firm) shows how decision making is encoded in routines that are triggered by particular circumstance (see Behavioral Theory of the Firm). From this point on, routines figured prominently across an array of work that sought to explain how organizations function. Nelson and Winter 1982 develops the concept of routines as the analogue of genes, arguing that they bring a regularity and predictability of behavior that is necessary for organizational functioning. However, the authors also develop the idea that routines can be a source not just of stability but also of change. The ideas espoused by Nelson and Winter have become extremely influential across a number of different approaches to work on routines. Parmigiani and Howard-Grenville 2011, in an extensive review of the literature, identifies two dominant trends in the research. Some scholars have adopted a capabilities perspective in which routines are considered to operate in predictable ways with little agentic influence. Of interest here is the outcomes that routines can generate. A practice perspective, by contrast, takes particular interest in the role of actors, viewing routines as emergent and generative, the outcome of “effortful accomplishments.” Feldman 2000, a study of a student housing department in a large university, is particularly important in this respect. Although sthe author was expecting to uncover the ways in which routines created stability, she instead developed significant insights into the ways in which routines are also a source of change. In so doing, Feldman developed a performative model of routines that encompasses structure and agency while challenging the accepted wisdom that routines create inertia. This idea is further developed, and theorized, in Feldman and Pentland 2003, a highly influential paper in which the authors demonstrate how routines have a performative and an ostensive aspect. The ostensive aspect is the structural component that conveys stability while the performative aspect allows for agency and the ability of people to create and modify the routine to fit the context in which they are operating; importantly, neither aspect can exist without the other. From this point on, a plethora of empirical and conceptual papers have fleshed out the ways in which routines are structured, used, and changed over time. It is also worth noting that, while a lot of work has, understandably, focused on how routines emerge, are enacted, and changed within single organizations, routines can also be developed between organizations (Zollo, et al. 2002). More recently, Feldman 2016 signals a new turn in the development of understanding of routines in highlighting their processual nature. By invoking a process ontology, Feldman argues for a move away from a focus on the substantive constitution of routines and more to an understanding of their continuity. In so doing, she develops the idea of routines as recognizable patterns and the importance of patterning as central to routine dynamics. This line of thought is developed in Turner and Rindova 2018, which similarly emphasizes the importance of temporal patterning in uncovering routine dynamics. Glaser 2017 also develops the importance of patterns but brings in the role of artifacts and specifically the ways in which the design of artifacts influences the ways in which routines are developed and modified. The theoretical range of work on routines suggests that this will continue to be a rich area for developing insights into how organizations function and change.

  • Feldman, Martha S. “Routines as a Source of Continuous Change.” Organization Science 11.6 (2000): 611–629.

    DOI: 10.1287/orsc.11.6.611.12529Save Citation »Export Citation » Share Citation »

    A key contribution to the idea that routines are not just a source of stability but also of change. Based on research in a student housing department of a large US university, Feldman applies Latour’s ostensive and performative descriptions of power to routines, particularly developing the performative aspect. Also identifies the importance of agency in the development and institutionalization of routines.

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  • Feldman, Martha S. “Routines as Process.” In Organizational Routines: How They Are Created, Maintained, and Changed. Edited by Jennifer Howard-Grenville, Claus Rerup, Ann Langly, and Haridimos Tsoukas, 24–47. Oxford: Oxford University Press, 2016.

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    A chapter in the highly influential series on process studies, here Feldman lays out a new way of thinking about routines that fully embraces the temporality associated with a dynamic understanding of the realization and enactment of routines. Employing a process ontology, Feldman develops the idea of patterning as consistent with routines being in a continual state of becoming.

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  • 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 » Share 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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  • Glaser, Vernon L. “Design Performances: How Organizations Inscribe Artifacts to Change Routines.” Academy of Management Journal 60.6 (2017): 2126–2154.

    DOI: 10.5465/amj.2014.0842Save Citation »Export Citation » Share Citation »

    Examines the ways in which the design of artifacts influences routine dynamics. Based on an ethnographic study of a law enforcement agency, Glaser argues that design performances produce assemblages of actors, artifacts, theories, and practices that, in turn, influence future actions.

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  • Nelson, Richard R., and Sidney G. Winter. An Evolutionary Theory of Economic Change. Cambridge, MA: Harvard University Press, 1982.

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    This is a foundational text in the development of our understanding of routines. Here, Nelson and Winter, two Yale economists, explain that the key mechanisms that determine how firms function are routines that are developed over time and that are relatively stable. As such, they are equated to biological genes that are crucial not just to the ways in which organizations operate but ultimately to their survival.

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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 » Share 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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  • Turner, Scott F., and Volina P. Rindova. “Watching the Clock: Action Timing, Patterning, and Routine Performance.” Academy of Management Journal 61.4 (2018): 1253–1280.

    DOI: 10.5465/amj.2015.0947Save Citation »Export Citation » Share Citation »

    Develops understanding of the temporality of routines by exploring the concept of action timing as a patterning mechanism. Test their ideas by examining garbage collection routines and demonstrate how temporality impacts agency in the enactment of routines.

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  • Zollo, Maurizio, Jeffrey J. Reuer, and Harbir Singh. “Interorganizational Routines and Performance in Strategic Alliances.” Organization Science 13.6 (2002):701–713.

    DOI: 10.1287/orsc.13.6.701.503Save Citation »Export Citation » Share Citation »

    Introduces the concept of interorganizational routines and demonstrates how they play a key role in determining the effectiveness of firm collaborations.

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Organization Culture

Organization culture is central to organization theory. Across numerous studies, it has been variously used to invoke differences in behaviors and outcomes among individuals, subunits, organizations, and nations. The upsurge in interest in organization culture in the 1970s is often attributed to the Western fascination with the rise in competitiveness of Japanese companies from a situation of devastation following World War II. Schein 1985, authored by an early and highly influential pioneer of organizational culture, develops significant insights into the ways in which culture becomes manifest in organizations and to what effect. Subsequent studies typically took 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). Hofstede 2001 famously attempts to also consider the ways in which national cultures influence organizations across a variety of dimensions. As work on culture has proliferated, so it has become increasingly fragmented. Giorgi, et al. 2015 identifies how culture has become entwined with three prominent theoretical strands of organization theory: identity, institutions, and practices. The authors also describe five ways in which culture has commonly been evoked within the management literature as values, stories, frames, toolkits, and categories. This highlights the difficulty in defining and operationalizing culture and even in disaggregating it from related concepts. Thus, while it remains a powerful and important topic for organization theorists, we have some way to go in fully understanding how culture(s) emerge, develop, and impact organizations.

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

    DOI: 10.4135/9781446280072Save Citation »Export Citation » Share 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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  • Giorgi, Simona, Christi Lockwood, and Mary Ann Glynn. “The Many Faces of Culture: Making Sense of 30 Years of Research on Culture in Organization Studies.” Academy of Management Annals 9.1 (2015): 1–54.

    DOI: 10.5465/19416520.2015.1007645Save Citation »Export Citation » Share Citation »

    In this authoritative review, Giorgi and her colleagues identify five ways in which culture has been conceptualized in the management literature as values, stories, frames, toolkits, and categories. They then explain its relationship to three distinct theoretical areas: institutions, identity, and practices.

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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 » Share 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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  • Schein, E. H. Organizational Culture and Leadership. San Francisco: Jossey-Bass, 1985.

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    A text that is aimed at scholars and managers, the book is divided into three main sections. The first seeks to develop what is culture, followed by sections on how cultures develop and how they can change. The role of leaders and leadership in the creation and evolution of culture is infused throughout.

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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 » Share 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 History

Early organizational studies took account of historical contexts (for an exemplar, see Chandler 1990, cited under Structural Contingency Theory / Information-Processing Theory) but in later decades “history” became neglected, prompting repeated suggestions for its inclusion and discussions of the means by which history might be theorized (e.g., Kieser 1994; Kipping and Üsdiken 2014; Bucheli and Wadhwani 2014; Rowlinson, et al. 2014). One approach—the “realist” —portrays history as a set of temporal events that shape and constrain organizational behaviors (e.g., Greenwood, et al. 2010). Imprinting theory (see Imprinting Theory) and process studies often lean in this direction. In contrast, a more “constructionist” view treats history as stories or narratives of events. An application of this perspective examines how accounts of history (collective memory) can be manipulated and purposefully used by organizations, for example, for the construction of organizational identities (e.g., Anteby and Molnár 2012), or market categories (e.g., Khaire and Wadhwani 2010). The constructionist view has been questioned for portraying history as overly pliable and of understating its constraining influence. Organizations can consciously navigate and manage history, but they do so within limits (e.g., Sasaki, et al. 2020). Further, not only do studies tend to focus on the use of history by managers (to the neglect of other stakeholders), the possibility of multiple “collective memories” is rarely considered (Foroughi 2020). The way that managers use narratives of history to promote their interests connects to critical theory (see Critical Theory). Given the growing and important interest in how history matters, analyses of how history can be researched are growing (e.g., Maclean, et al. 2021).

  • Anteby, Michel J., and Virág Molnár. “Collective Memory Meets Organizational Identity: Remembering to Forget in a Firm’s Rhetorical History.” Academy of Management Journal 55.3 (2012): 515–540.

    DOI: 10.5465/amj.2010.0245Save Citation »Export Citation » Share Citation »

    Much organizational identity research has grappled with the question of identity emergence or change. Yet the question of identity endurance is equally puzzling. Relying primarily on an analysis of 309 internal bulletins produced at a French aeronautics firm over almost fifty years, the authors examine how organizational identity endures, documenting how the ongoing historical construction of collective memory relates to an organization’s identity.

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  • Bucheli, Marcelo, and R. Daniel Wadhwani, eds. Organizations in Time: History, Theory, Methods. Oxford: Oxford University Press. 2014

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    The increasing attention to history within organization studies has occurred without appropriate reflection about what is meant by “history,” and why and how it matters for understanding organizations. This collection of readings thoughtfully addresses this need.

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  • Foroughi, Hamid. “Collective Memory as a Vehicle of Fantasy and Identification: Founding Stories Retold.” Organization Studies 41.10 (2020): 1347–1367.

    DOI: 10.1177/0170840619844286Save Citation »Export Citation » Share Citation »

    Begins by summarizing the literature on how organizations can strategically use historical narratives, but points out that most work focuses upon managers and neglects the possibility of “multiple voices.” This study looks at how different worker communities can provide different renditions of organizational founding and the implications that follow.

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  • Greenwood, Royston, Amalia Magan Diaz, Stan Xiao Li, and José Cespedes Lorente. “The Multiplicity of Institutional Logics and the Heterogeneity of Organizational Responses.” Organization Science 21.2 (2010): 521–539.

    DOI: 10.1287/orsc.1090.0453Save Citation »Export Citation » Share Citation »

    Explains why organizations located within different regions in Spain adopted contrasting strategies to pressures for downsizing. Emphasizes the significant influence of a region’s cultural and religious histories.

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  • Khaire, Mukti, and R. Daniel Wadhwani. “Changing Landscapes: The Construction of Meaning and Value in a New Market Category—Modern Indian art.” Academy of Management Journal 53.6 (2010): 1282–1304.

    DOI: 10.5465/amj.2010.57317861Save Citation »Export Citation » Share Citation »

    Focuses upon the process by which meaning and valuation criteria are constructed in new categories through a descriptive study of modern Indian art. Reveals how market actors shaped the construction of meaning in the new category by reinterpreting historical constructs.

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  • Kieser, Alfred. “Why Organization Theory Needs Historical Analyses—and How This Should Be Performed.” Organization Science 5.4 (1994): 608–620.

    DOI: 10.1287/orsc.5.4.608Save Citation »Export Citation » Share Citation »

    This invited essay provides convincing arguments as to why historical analyses should be included in organization theory. It provides examples of the insights and contributions that would result.

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  • Kipping, Matthias, and Behlul Üsdiken. “History in Organization and Management Theory: More Than Meets the Eye.” Academy of Management Annals 8.1 (2014): 535–588.

    DOI: 10.5465/19416520.2014.911579Save Citation »Export Citation » Share Citation »

    Presents an overview of the way history has been used in organizational studies, distinguishing “history to theory” and “history in theory.” In the former, history serves as evidence to develop, modify, or test theories. In “history in theory” the past is part of the theoretical model itself as a driver or moderator, with “imprinting” as a prime example.

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  • Maclean, Mairi, Stewart R. Clegg, Roy Suddaby, and Charles Harvey, eds. Historical Organizational Studies: Theory and Applications. New York: Routledge. 2021.

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    Examines how history can be incorporated into organization studies. The book evaluates the current state of play, advances it and identifies the possibilities for the future. The book can be used to introduce management and organizational history to a student audience at both undergraduate and postgraduate levels.

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  • Rowlinson, Michael C., John Hassard, and Stephanie Decker. “Research strategies for organizational history: A dialogue between historical theory and organization theory.” Academy of Management Review 39.3 (2014): 250–274.

    DOI: 10.5465/amr.2012.0203Save Citation »Export Citation » Share Citation »

    Explains the relationship between history and organization theory in terms of three ways of knowing the past. Four alternative research strategies are put forward for writing organizational history from archival sources.

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  • Sasaki, Innan, Josip Kotlar, Davide Ravasi, and Eero Vaara. “Dealing with Revered Past: Historical Identity Statements and Strategic Change in Japanese Family Firms.” Strategic Management Journal 41.3 (2020): 590–623.

    DOI: 10.1002/smj.3065Save Citation »Export Citation » Share Citation »

    Identifies three discursive strategies used to overcome possible resistance to change. A study of Japanese family firms shows ways by which managers can enable change by connecting to the values of a “revered” past. The case illustrates how the past is both constraining and enabling.

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Hybrid Organizations

Hybrid organizations combine organizational elements that are not typically brought together (for reviews, see Battilana, et al. 2017; Saebi, et al. 2019). One line of research focuses upon hybrids influenced by two or more institutional logics—such as commercial organizations that embrace the practices and values of corporate sustainability, social welfare organizations that incorporate the market logic (often termed “social enterprises,” e.g., see Battilana and Dorado 2010; Pache and Santos 2013; Tracey, et al. 2011), and “public-private” partnerships, which are increasingly found in the public sector (Reay and Hinings 2009). A different but complementary line of research 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. 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), through the distinctive behaviors of successful integrative managers (as in Besharov 2014), or through balancing mechanisms (Smets, et al. 2015). Increasing recognition is being given to the dynamic nature of hybrid managing, as in Jay 2013 (cited under Paradox Theory) and Smets, et al. 2015. 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 Organizational Design for references).

  • Battilana, Julie, Marya Besharov, and Bjoern Mitzinneck. “On Hybrids and Hybrid Organizing: A Review and Roadmap for Future Research.” In The SAGE Handbook of Organizational Institutionalism. 2d ed. Edited by Royston Greenwood, Christine Oliver, Thomas B. Lawrence, and Renate E. Meyer, 128–162. London: SAGE, 2017.

    DOI: 10.4135/9781446280669.n6Save Citation »Export Citation » Share Citation »

    A comprehensive review that arranges research into hybrid organizations in terms of the challenges that they face and the opportunities that they awaken, and of how those challenges and opportunities are managed. Offers suggestions for a program of future research.

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  • 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 » Share 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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  • 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 » Share 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 »