Hasn’t Institutional Theory Always Been Critical?!

Abstract

To the provocations by Munir (in this issue) and others who call on (neo)institutional theory to become more critical, I rebut by asking: Hasn’t institutional theory always been critical?! In response to Munir, I unpack the definition of the term ‘critical’, discussing the many meanings poured into the term, in order to assert that institutional theory is, and has always been, staunchly critical – as is evident by its role in driving the paradigmatic shift in the study of organization, organizations and organizing, and in transforming the field of organization studies as a whole.

The interrobang – the grammatical combination of a question mark followed by an exclamation mark, which was curiously formalized in the 1960s into a unique typeface – transforms a query into a rhetorical question. This in-print mark signals that rather than eliciting an answer, the sentence preceding the interrobang is intended to deliver a strong assertion, injected with a pinch of irony. This is indeed my intention in this essay, which engages with the calls, not to mention attacks, on (neo-)institutional theory to become more critical.

Over the past several years, numerous fora have been devoted to the debate around the critical aspects of institutional theory, and several pieces have been published on the matter, mostly urging institutional theory to adopt, or commit to, critical analysis. Invariably, the position of these published commentaries, especially those published recently in the Journal of Management Inquiry, was accentuated in their title by a question form or a punctuation mark: ‘Can institutional theory be critical?’ (Suddaby, 2015), ‘Why institutional theory cannot be critical’ (Willmott, 2015), ‘Why (and how) institutional theory can be critical’ (Lok, 2019) and, succinctly put, ‘Can it?’ (Willmott, 2019). To these provocations, as well as to the twin essay by Kamal Munir (this issue), I reply with a title that equally acquires its potency from the manner of its phrasing; I rebut by asking: Hasn’t institutional theory always been critical?!

The following commentary engages with Munir’s essay in this issue, which summarizes and affirms the charges that institutional theory is inattentive or, worse, oblivious to issues of power, hierarchy and domination. He claims that institutionalists’ conflation of power and violence misleads them to overlook power, whereas, Munir claims by referencing Arendt, ‘where power operates effectively, violence is not required’ (this issue). In previous work, Munir argues that institutionalist terminology drains power out of analyses of organizations: ‘hegemony becomes taken-for-grantedness, and ideology becomes logic’ (Munir, 2015, p. 91). In frustration, he maintains that institutionalists ‘often end up painting a rather sanitary view of the world’ (Munir, 2015, p. 91). And, attempting to explain why institutionalists ‘sidestep’ evidence that institutions exert power over us, Munir asserts that manifestations of power ‘represent “normality” for them, or because of disciplinary and careerist considerations’ (2019). In the same spirit, previously Munir explained that ‘institutional theory’s inadequate awareness of power is not due to an epistemological or ontological difference. Rather, the issue is moral and ethical’ (2015, p. 90) because injustices that vex critical scholars are rarely considered problematic by institutionalists.

Munir’s allegations expand on the ongoing reproach of institutionalism. Adding to concerns expressed from within the institutionalist camp that due to its success and expansion the theory ‘is creaking under the weight of its own theoretical apparatus’ (Lawrence, Suddaby, & Leca, 2011, p. 52; see also Hirsch & Lounsbury, 2015 Lounsbury, 2003), critical organization scholars charge that institutional theory is overpacking the notion of institution and has thus become fragmented into a ‘set of varied approaches using the same intellectual brand’ (Alvesson, Hallett, & Spicer, 2019, p. 119); that such fragmentation leads to tautologies, repetitions and ‘pseudo-progress’ (Alvesson & Spicer, 2019, pp. 208–209), carrying ‘hallmarks of a “degenerative” rather than a “progressive” research programme’ (Reed & Burrell, 2019, p. 4); and that contemporary debates in organization studies create ‘an entirely manufactured and spurious “crisis”’ that masks and thus serves the reproduction of institutional theory’s hegemony over the field (Reed & Burrell, 2019, p. 45). Munir’s essay (2019) redirects this loaded criticism towards the specific issue of power, yet again calling on institutional theory to adopt a (more) critical outlook: he writes,

Unless institutional theorists are explicitly motivated to address domination and exploitation, they cannot be taken as critical. To be critical, a theory needs to be a theory of emancipation [. . .]. It needs to seek out and explain structures of oppression and domination and be normative in being premised on the ideal of overthrowing such structures.

In response, in the following section, I unpack the definition of the term ‘critical’ in order to establish a basis for my claim that institutional theory is, and has always been, staunchly critical – as is evident by its role in driving the paradigmatic shift in the study of organization, organizations and organizing, and in transforming the field of organization studies as a whole.

The Many Meanings of Being Critical

Even while acknowledging that institutional theory was and is critical of all variants of rationalist explanations, the benchmark for demanding that institutional theory become more critical is critical management studies (CMS). Therefore, as also acknowledged by Munir (this issue), critics of institutional theory predicate their charges on the distinction between capital C and lowercase c, namely between a theoretical position that is labelled Critical and a probing investigation that is wary of any accepted ideas and routines. This C/c distinction is ineffectual here because it primarily indicates the usurpation of the term ‘critical’ as the proper name of a singular theoretical approach and thus the creation of a mechanism of exclusion. Moreover, this C/c distinction is the basis for a normative, rather than appropriately intellectual, critique of institutionalism and thus it is a futile exercise in paradigmatic, or epistemological, conversion – or what Munir (this issue) calls ‘rebirth’. In its place, I offer a series of reflections on the many meanings poured into the term ‘critical’, using these various meanings to argue that indeed institutional theory has been critical all along.

Critical = focusing on power and coercion

First, the term ‘critical’ is taken to mean attention to power differentials and coercion dynamics, namely, focusing on how differences in capacity and ability are exercised to influence and direct action or to prescribe meanings. As such, the term ‘critical’ addresses both the resource base for, as well as the process of, social action, with power serving as both the noun and the verb. Such an understanding of power is a seductive perspective for social scientists; ‘the power of power’ as an explanatory factor draws on the temptations of its obviousness, measurability and usefulness as a posteriori (residual) explanation (March, 1966/1988, pp. 147–149). Yet it is exactly that muscularity of power and its omnipresence that undermine its potency as a valid explanation, further weakened by its inextricable link to rationality and choice-making mechanisms. In the well-known words of Jim March: ‘Although power and influence are useful concepts for many kinds of situations, they have not greatly helped us to understand many of the natural social-choice mechanisms to which they have traditionally been applied’ (1966/1988, p. 147). Likewise, ‘Perrow (1976: 21) has noted that despite superior resources and sanctioning power, organizational elites are often unable to maximize their preferences because “the complexity of modern organizations makes control difficult”’ (cited in DiMaggio & Powell, 1983, p. 157). Sheer power, therefore, holds ‘surprisingly little purchase’ for the explanation of complex social situations (March, 1966/1988, p. 149). Institutional theory was developed on the basis of March’s critique of power and inspired by his confession that he is ‘both embarrassed by the inelegance of the temptations involved and impressed by their strength’ (1966/1988, p. 148).

Institutional theory’s redress for the bluntness of power, coercion and dependence in their conservatively critical definition is by asserting that authority and enactment are both powerful and impactful. Therefore, the absence of the term ‘power’ in several of the canonical pieces of institutional theory should not be taken to be any disregard of social power broadly defined: Although Meyer and Rowan (1977) use the term ‘power’ only once (and in reference to Pfeffer and Salancik’s resource-dependence theory), and DiMaggio and Powell (1983) mention the term ‘power’ eleven times (five of which are in their rebuttal to class-based explanations), social power broadly defined is a solid foundation for institutional theory’s approach to social processes, outcomes and action. Resolutely, institutional theory’s approach to power goes beyond ‘allocation theory’ to ‘legitimation theory’ (Meyer, 1977), thus aiming to seek the influence of norms and discourse on social construction, to focus on ‘soft law’ as well as ‘hard law’, to investigate the role of authority in defining what is appropriate, and so on. This ‘turn’ is most obvious in DiMaggio and Powell’s (1983) canonized outline of the three mechanisms of isomorphism. In addition to coercive isomorphism, which is driven by formal pressure, influence and thus ‘power’ and ‘imposition’ in their more traditional and obvious sense, DiMaggio and Powell add the mechanisms of mimetic isomorphism, which is driven by uncertainty and takes the form of imitation and modelling, and normative isomorphism, which draws on the legitimacy and authority of professionals to define knowledge and on their transcendent positions that allow their knowledge to diffuse. Such a ‘bifocal view of power’ (DiMaggio & Powell, 1983, p. 157), rather than being an expression of the ‘loss of power’ (Munir, 2015), defines authority as a nuanced form of power to exploit and adhere to, legitimacy as a nuanced form of resources to gain and endow, and enactment as a nuanced form of action or behaviour. All of these, consistent with the lineage that ties March through Giddens to Lukes, define the bases for institutions and institutionalization and drive the assaults on rationality and agency.

The search for these nuances orients institutional research to unearth constitution and influence from under the taken-for-granted, meaning to seek the dynamics of institutional authority, legitimacy and appropriateness from under obvious power. Martha Finnemore’s (1993) study of the role of UNESCO in the cross-national diffusion of national science policy agencies exemplifies such an epistemological orientation in empirical research. Choosing to study the impact of international organizations on the founding and form of national governance through UNESCO initiatives allows Finnemore to trace the normative and mimetic processes that endow this organization, which is a particularly resource-poor member of the UN group of organizations, with great influence over the state apparatus in various countries. Finnemore finds little support for demand-driven explanations or power theories: UNESCO had no funds or likewise means to command national governments to adopt its policy scheme of founding a national agency for science policy. Rather, Finnemore argues that UNESCO acted as a ‘teacher of norms’ and that its influence to diffuse a particular governance scheme was predicated on its authority to change ‘the intersubjective understandings about the appropriate role of the modern state’ (Finnemore, 1993, p. 566). In other words, the recognition of UNESCO as the international locus of expertise on science, culture and education, coupled with uncertainty as to what might be the solution to the (grand) challenge of national development, drove national governments to adopt UNESCO’s recommendations, hence enacting the legitimate model of appropriate nation-statehood. Other institutionalist research, also on global governance, likewise focuses on those peculiar sites where institutional authority trumps muscular power. These studies reveal the impact of regulatory regimes (see Djelic & Sahlin-Andersson, 2006), international nongovernmental organizations (see Boli & Thomas, 1997) and normative and professional regimes (such as science; see Drori, Meyer, Ramirez, & Schofer, 2003) on global political and economic order. In all such institutionalist studies, the ‘softness’ of authority and enactment affords analysis of sites where power and influence are more subtle and take more curious forms.

Critical = analysing dissimilarity and inequality

Second, the term ‘critical’ is taken to mean a focus on variation and discrimination, either as a cause (undermining social progress or current notions of justice) or as an outcome (due to processes of reproduction, which further privilege those who already have social capital to better use, retain and even grow their social capital). For critical scholars, organizations and institutions are particular sites in which social inequalities are instantiated and amplified (see Amis, Munir, Lawrence, Hirsch, & McGahan, 2018), privileging actor-centred explanations. For institutionalists, on the other hand, patterns of difference and unevenness are central to any research, for conceptual and methodological reasons alike, thus again showing that although difference and inequality are not its raison d’être, these matters are at the core of institutional theory’s critical observation of the social order.

To drive the paradigmatic revolution that institutional theory instigated – from Selznick in the 1950s and clearly from the late 1970s with Meyer and Rowan’s seminal work (see Scott, 1987, 2008) – required institutionalists to strongly undermine the then-prevalent social theories. Additionally, because the dominant social theories of the time – both modernization/functionalist and critical/Marxist – were indeed focused on inequality and the processes that perpetuate it, institutional theory challenged the prevailing focus of both theories on rationality, difference and reproduction by highlighting the irrationality of rationality, isomorphism and the Weberian notion of the iron cage. Therefore, what is mistaken for oblivion to dissimilarity and disparity or avoidance of attention to organizational reproduction is in effect a move to shake sociological research of organization out of its paradigmatic fixation.

Indeed, bringing to inequality research their emphasis on organizational and societal institutional factors, many institutionalist studies focus specifically on both the patterns of disparity and the process of its constitution and expansion, challenging the traditional attention to individualistic and agentic accounts. Pointing to the role of institutions in creating inequality (see Davis, 2017), institutionalists investigate, for example, gendered representation in business ventures (e.g. Thébaud, 2015), race-based discrimination in the workplace (Hirsh & Kornrich, 2008) and the institutionalization of diversity programmes (Kalev, Dobbin, & Kelly, 2006). Likewise, institutionalists have been concerned with the differential costs of isomorphism (Shenhav & Kamens, 1991) and with unequal patterns of diffusion (e.g. regarding loose coupling, Bromley & Powell, 2012; Drori et al., 2003; and, regarding glocalization, Drori, Höllerer, & Walgenbach, 2014; Walgenbach, Drori, & Höllerer, 2017). Therefore, although Lok (2019, p. 335) takes an accusatory tone in describing how such institutionalist research is an outcome of calls by ‘prominent institutional scholars’, I regard both the internal debate within institutional theory, as well as its relinquishing of the need to insist on isomorphism, as signs of institutional theory’s maturity and dominance. With the success of its paradigmatic revolution, institutional theory’s study of homogeneity patterns and homogenization processes is no longer as forceful as it needed to be in its early days (when explicitly positioned against population ecology’s focus on the heterogeneity of organizations; see DiMaggio & Powell, 1983).

And what of the critique that institutional theory ignores ‘class’ or ‘hierarchy’? For institutionalists, ‘class’ is an institutionalized, hence constructed, social category and an imagined community, which in the case of ‘upper class’ or ‘dominant class’ is also a reference category to all others, marking the ideal type and the desired or modelled category for all others to enact. As a constituted category, rather than a given social group within a given social order (Munir, 2015, p. 91), ‘class’ itself becomes the object of investigation, and it is defined not necessarily by relation to production but rather by a variety of contextual features. Therefore, especially for the phenomenological school of institutional theory (see R. Meyer, 2008), the category of ‘class’ is relevant in as much as it is imbued with meanings, set into practices and routines, and embodied in structures and material objects. And, it is these meanings, practices and structures that declare class or elite to be a constituted (as well as desirable and referent) social category. As such, class rises as the object of study only in social contexts – national, epochal, or other – in which it is a salient and relevant social category.

Critical = driving empowerment and social change

Third, seeing that ‘critical’ is taken to mean recognition of asymmetries of power and attention to social ills such as inequality and coercion, ‘critical’ is also taken to mean a fixed definition of good and bad, and, especially for radical critical theory, it is related to liberation and empowerment agendas. Reflective of the CMS perspective, the scientized character of institutionalism is taken to be a sin of value neutrality with regard to social ailments and injustices, going as far as to claim that institutional theory chooses ‘to operate within the larger paradigm of capitalist relations of production’ (Munir, 2015, p. 91) and that its conservative pedigree is ‘nourished’ by nothing but ‘a conservative or liberal intellectual tradition’ (Willmott, 2019, p. 350). And yet institutionalism has a very clear perspective on value judgements – namely, that value judgements too are context dependent and, as such, they too become the object of study.

This stance allows institutional theory to inspire and motivate analyses in terms of social construction processes, imagination, representations and meanings; this stance also drives the definition of epochally legitimate scripts and models such as, for example, actorhood, nation-statehood and personhood. This staunchly constructivist perspective (see R. Meyer, 2008; J. Meyer, 2010) is utterly ignored by Munir in his commentary (this issue): he engages solely with the specific tradition within institutionalism that speaks in terms of institutional work and institutional entrepreneurship. Munir’s dispute with actor-centred institutionalism, although convenient for a conversation among business school scholars, causes him and others to overlook the rich stream of constructivist institutionalism that has consistently and fruitfully motivated the investigation of an organization as an embedded imagined community, management as a rationalized category, and executives as actors who perform their constituted and prescribed role. This institutional perspective transposes the emancipatory streak of CMS – which is intent on transformation and thus is archetypically normative – into a reflexive analytical position toward what are defined as social problems.

Moreover, this reflexive position of institutional analysis bears no relation to the activist agenda or action of any individual institutionalist. Because whereas criticism is levied against institutionalists for not taking more predictive or prescriptive engagement with the issues that we expertly understand – the market, organizations and other institutions (Munir, 2011) – the contemporary sense of urgency regarding what are now known as ‘grand social challenges’ spurs numerous institutionalists to investigate, comment or advise on such urgent matters with the aid of the institutionalist toolkit. Institutionalists study the issues that we now regard as urgent and global social challenges: environmentalism (Frank, Hironaka, & Schofer 2000), poverty alleviation (Mair & Marti, 2009) or human rights (Cole, 2005), to name only a few pressing social problems and institutionalist analyses of them. Additionally, institutionalists study the institutional entanglements – of, for example, professionalized knowledge (Fourcade, 2006, Fourcade-Gourinchas, 2001; Sahlin-Andersson & Engwall, 2002) or governance arrays (Djelic & Quack, 2003, 2010) – that led the world to be plagued by these grand challenges. On this point, Munir’s (2019) claim that ‘hardly an institutional theorist out there explaining to the world why economists got it wrong, or how the institution of the market and its financialization had become institutionalized’ seems unmindful.

Overall, the foundational principles of institutional theory – regarding embeddedness, diffusion, logics and scripts, enactment and authority – guide institutionalists to engage with the same issues that are taken to mean ‘critical’, albeit from a restrictive theoretical perspective. Moreover, aware of the critique levied against it on the issue of power, institutionalists not only speak to such ‘critical’ issues but, importantly, transcend and surpass them. For example, institutional theory’s critique of the singularity and muscularity of power spurs its continuous attention to, and prolific study of, authority and influence; likewise, institutional theory’s critique of the fixation with difference matured into resurgence in research on categories, boundaries and their enactment. In these many ways, institutional theory confirms its innate and enduring commitment to a critical analysis of organization, organizations and organizing.

The Challenge of Maintaining a Critical Gaze

Institutional theory is widely recognized as a principal theory in the field of organization studies – and it is exactly this proclamation that irks CMS theorists. Debating why and how institutional theory became critical, protesting its lack of engagement with emancipatory theories, and denouncing its adamant disinterest in becoming (more) critical clearly misses the point: Institutional theory is and has always been critical, just not in the narrow, dogmatic and self-serving definition of ‘critical’ held by some. CMS theorists are normatively committed to conflating institutional theory with neo-positivism, ontological realism and quantitative research methods, utterly misreading the interpretive streak running through institutional theory’s prolific tradition of conceptual work and empirical research.

Critical analysis – that challenges the taken-for-granted and any existing arrangement, form and idea – is inherent to institutional theory. Institutional theory emerged and was consolidated by challenging rationality and functionality, the fascination with inequality, and the fixation on material and forceful drivers of action. Importantly to the critical character of its contemporary work, institutional theory is imprinted with its own constitutional position. With that, I reiterate: Hasn’t institutional theory always been critical?!

If anything, institutional theory today is challenged to maintain its critical gaze over the taken-for-granted. Now that institutional theory’s dominance in organization studies is recognized and its breadth of topics and perspectives is evident, we institutionalists are called upon to sustain the theory’s critical perspective. I think that much of the vitality of institutional analysis comes from its constructivist and reflexive mode, as well as from its diversity. First, it is the situated, rather than normative, stance of institutional theory that has always carried forward its critical observation of social phenomena – through the application of a reflexive perspective onto a constituted, constructed social order. This position is mistaken for the perspective of an ‘objective and disinterested outsider’ (Munir, 2015, p. 91; Lok, 2019, p. 336), whereas institutionalist reflexivity, contrary to being objective, is profoundly situated, namely, assessing phenomena in relation to their social context. Second, institutional theory will continue to maintain its critical perspective as long as it keeps to plurality of topics and disciplines. In line with March’s (2007) reflection on the development of organizational institutionalism, if institutionalism becomes captivated by its objects of study, namely managerialism and business-speak, or if it becomes insufficiently sociological, philosophical, historical or comparative, it is at risk of impeding its critical perspective on organization, organizations and organizing. On such matters, reflexivity and disciplinary diversity will serve as an antidote to anxiety about the critical character of institutional theory.