Institutions and Their Social Construction: A Cross-Level Perspective

Abstract

Defining institutions as taken-for-granted systems of roles and interactions, this paper presents a novel theoretical integration of hereto disparate micro and macro approaches to their social construction. Building on and modifying Berger and Luckmann (1967), I emphasize the social and cultural embeddedness of the phenomenological experience of institutions and their embodiment in organizations and organizing practices. The paper identifies mechanisms by which micro-institutions emerge at the intra-organizational level and how institutionalization is shaped across the multiple levels of organizations, geographic communities, organizational fields, societies, and the world system. It proposes that the locus of sedimentation, and hence institutionalization, occurs at multiple levels, which are culturally embedded within higher-level institutional orders of society and the world system. It further proposes that the generation of a committed network of role practitioners is a critical component of institutionalization.

Introduction

Institutions are endemic to organizations (Scott, 2013; Ocasio & Gai, 2020). The formal (and informal) organizations we experience in our lives are not created de novo but are constructed and reconstructed from institutionalized structures and practices transmitted across time and space (Cooper et al., 1996). As organized practices become taken-for-granted, learned, and reproduced within and across groups and organizations, they become institutionalized (Berger & Luckmann, 1967). Importantly, institutions and their organizing practices provide social actors with roles to enact and routinized forms of action and interaction. Without institutions, social and organizational life would be chaotic, all social interactions would be subject to recurrent renegotiation, and large-scale social organizations requiring significant coordination across actors would become impossible. Institutions are more than myth and ceremony (cf. Meyer & Rowan, 1977). Institutions are essential blueprints for organizations, organizing, and social life, more generally.

Despite the ubiquity of institutions (or perhaps precisely because of it), there is no consensus in the social sciences more generally, or in organization theory more specifically, on what is and what is not an institution, the level(s) of analysis they operate at, the consequences they have, and how exactly institutionalization is generated and reproduced. In the social sciences, various institutional approaches have emerged—economic, political, sociological, and, more recently, organizational (Greenwood et al., 2008). Yet organizational institutionalism, while immensely generative, has led critics to decry the conflation of institutions with other concepts (Alvesson & Spicer, 2019) and the proliferation of institutional theories with diverse interpretations of the subject of study (Alvesson et al., 2019). Institutional scholars themselves have made similar observations regarding “the inflationary use of the label ‘institutional,’ combined with a lack of clarification as to what makes research and analyses institutional” (Meyer & Höllerer, 2014, p. 1230).

These critiques of organizational institutionalism are not without merit. Significant ambiguity remains regarding the concept of institution and the failure to differentiate the term from other concepts such as culture, identity, and organizations. Instead of banning the concept of institutions from organization theory, as critics have proposed (Alvesson & Spicer, 2019), I emphasize the need for greater clarity and coherence in the definition of institutions and offer a theoretical approach to unpack the meaning of that definition. Building on and modifying prior work (Ocasio et al., 2017; Ocasio & Gai, 2020), I define an institution as a taken-for-granted, organized system of roles and interactions. ¹ This definition combines insights from a variety of institutional approaches: that institutions are taken-for-granted builds on the phenomenological perspective of Berger and Luckmann (1967); that institutions are organized systems brings to the fore the properties of the “old institutionalism” (Hughes, 1936; Selznick, 1996; Stinchcombe, 1997), which equate institutions with established forms of social organization; and the emphasis on roles and interactions combines Berger and Luckmann’s (1967) focus on the reciprocal typification of roles and actions (cf. Meyer, 2019) with micro-interactionist approaches to institutions (Barley, 2008, 2019; Hallett & Ventresca, 2006).

To unpack the theory of institutions that underlies this definition, I build on and modify Berger and Luckmann’s (1967) theory integrating their micro-phenomenological approach with a cross-level perspective on the social construction of institutions. I rely on their concepts of typification, objectivation, and sedimentation to explain the process of institutionalization. I depart from Berger and Luckmann, who, building on Schutz (1972) and Mead (1934), focus on individuals’ intersubjective phenomenological experience without explicitly considering the role of higher-level social and cultural structures upon which that experience is generated. I propose instead a sociocultural phenomenological approach that combines insights from Berger and Luckmann’s micro-phenomenological perspective with macro-institutional approaches (DiMaggio & Powell, 1983; Friedland & Alford, 1991; Meyer et al., 1997). The cross-perspective provides greater theoretical coherence than existing approaches, bringing together cognitive, normative, and structural perspective to institutions that are often taken as competing, if not contradictory approaches, and proposes instead that the component mechanisms operating across micro and macro levels of analysis are all necessary to the generation and reproduction of institutions.

In particular, I theorize that institutionalization is generated and reproduced through the activities of a social network of role practitioners embedded across geographic communities, organizational fields, societies, and the world system. Institutions, while subjectively experienced by practitioners at the level of interactions, become established forms of organization and organizing, objectivated and sedimented at higher levels. For example, universities, as institutions, are phenomenologically experienced through our interactions with their role occupants—as students, faculty, staff, visitors, funders, suppliers, and regulators, among others. But individual universities are also established locally within geographic communities, socially, and embedded within the organizational fields of higher education, both at the level of individual societies and of the world system.

To clarify my sociocultural phenomenological approach, I adopt a critical realist ontology that treats institutions and their social construction as having fundamental properties and functions that exist in the world independent of our conceptualization or observations of them (cf. Delbridge & Edwards, 2013). Here, critical refers not to critical theory or Neo-Marxist approaches but to our limitations as researchers and social scientists in accurately understanding, observing, and measuring the empirical reality of institutions. From a critical realist perspective, institutions are socially constructed facts (cf. Searle, 1997). Still, they have a material existence independent of our always imprecise knowledge of how they are constituted and how they operate. Hence, they are not fully reducible to individuals’ phenomenological experience, but are themselves products of social collectives and the social and cultural structures that bind individuals’ knowledge and practice (Archer, 1995).

In the following sections, I will present my sociocultural phenomenological approach to the social construction of institutions, explaining how social organizations and their organizing practices become institutionalized through the typification, objectivation, and sedimentation of a social system of roles and interaction orders. Next, I will examine the macrostructure of institutions, as social collectives are socially structured within a hierarchy of interaction orders, organizations, geographic communities, organizational fields, societies, and the world system. Institutions are socially constructed, but they are not socially constructed de novo. Institutions are culturally and structurally embedded in preexisting institutions within society. Subsequently, I will examine how socially constructed institutions provide taken-for-granted blueprints for creating, cultivating, and recombining new and existing organizations and organizing practices.

This theoretical approach seeks not only to clarify the meaning of institutions and their instantiations at different levels of analysis but also to provide a sociocultural perspective on organizational institutionalism in which organizations play a critical role. Rather than viewing institutions as the external context of organizations, perhaps the defining feature of the new sociological institutionalism (Scott & Meyer, 1994), institutions are theorized as simultaneously external and internal to organizations, constitutive of and constituted by organizations and organizing practices.

The Social Construction of Institutions

Based on a phenomenological perspective, Berger and Luckmann (1967) theorize that institutions and institutionalization emerge from the social construction of social reality. I interpret and modify their core argument as follows. Humans create shared knowledge of routine organizing practices by developing collective typifications of the roles, role relationships, interactions, and material artifacts employed in such practices (cf. Schatzki, 2019). As social practices and their typification are reproduced across a variety of formal and informal organizations, both the collective knowledge and the practices become increasingly perceived as factual and objective, both in their perception and embodiment (Jones et al., 2017). The socially constructed reality of organizing practices and the social organizations that reproduce them become institutionalized—taken for granted and normatively sanctioned—through the sedimentation of not only knowledge but of the embodiment of that knowledge in organizing practice by social collectives—a network of culturally embedded role practitioners—across time and place. ²

A phenomenological perspective is foundational for neo-institutional theory, particularly for the work of Meyer and Rowan (1977) and Zucker (1977), as well as for constitutive variants of organizational institutionalism (Lounsbury & Wang, 2020). Yet the processes of typification, objectivation, and sedimentation of socially constructed reality remain opaque, and the various components are not always incorporated into all phenomenological approaches to institutions. ³ In addition, much of institutional theory, including a large portion of the research on institutional isomorphism (DiMaggio & Powell, 1983 ⁴ ), is informed not so much by social construction, phenomenology, or cultural approaches but primarily by a resource dependence perspective (Pfeffer & Salancik, 1978; Wry et al., 2013). The move towards resource dependence approaches to institutions with legitimacy as the central resource tends to privilege the institutional environment external to organizations as the source of institutionalization (Oliver,1991; Greenwood et al., 2011). Berger and Luckmann’s (1967) idea that role occupants first experience institutions at the level of interactions and the experimental demonstration of these micro-institutional effects by Zucker (1977) are mostly ignored, if not forgotten.

Stages of Institutionalization: A Sociocultural Phenomenological Account

Typification

The typification of roles and interactions by members of a social collective is an initial stage of institutional formation (Berger and Luckmann, 1967). ⁵ Typification emerges from the routinization of social practices and the classification of component roles and interaction orders. ⁶ Groups generate routines to coordinate activities, establish political settlements among practitioners, and provide expectations for future outcomes (Nelson & Winter, 1985). Typifications label routinized practices by identifying roles and interactions that give rise to those routinized practices and classifying individual exemplars as members of the typified categories. The typifications specify the role relationships associated with role occupants (Nadel, 1957; Barley, 1990) and the rules and conventions governing interactions among roles (Goffman, 1983).

While the concept of typification is found in some contemporary institutional approaches (Meyer, 2008; Jancsary et al., 2017; Steele, 2021; Glynn & D’Aunno, 2022), its usage is not common. It appears only once in the index of the latest Handbook of Organizational Institutionalism (Greenwood et al., 2017), and Barley’s (2019) citation there uses the term only once. Yet their importance should not be underestimated. Through typification, behavioral scripts that underlie routines (cf. Barley & Tolbert, 1997) can be more readily replicated across a variety of actors and contexts through instructed learning (Tomasello, 2019).

Perhaps most significantly, the typification of roles—types of actors and their actions and role relationships—is not a focus of much institutional theory and research. The interest in actors has been primary in terms of the agency they demonstrate (e.g., Battilana, 2006), yet the roles actors play in enacting their agency is not usually part of the theoretical framing, often instead relying on an undersocialized conception of actors and their actions. The typification of roles serves a pragmatic function facilitating collective agreement on the content and meaning of role behavior. Collective typifications also serve a normative function, proscribing a range of appropriate conventions for role behaviors. Collective typifications structure human interactions in all facets of human life, from everyday events to those that may occur once or only a few times in a lifetime—e.g., weddings (cf. Barley & Tolbert, 1997). Routines can be tacit and exist without their typification, but typification of routines and of the role occupants responsible for enacting them greatly enhances the potential for their maintenance and reproduction.

Zucker’s (1977) classic experimental study of cultural persistence of the autokinetic effect, an optical illusion, illustrates the meaning and use of shared typifications to reproduce beliefs and behavior, both at the level of the interaction order and how they are embedded withing higher level institutional cultures. She creates in the lab a face-to-face interaction order—the structured interactions among generations of lab participants—and in the experimental condition she typifies the interaction order as an “office.” She further typifies a leadership role as “the light operator.” Cultural persistence, evidence for institutionalization, is highest where both the interaction order and role are typified. Yet her micro-interactionist approach works because the participants rely on a macro-cultural understanding of organizations.

It is important to note that the meaning of the typifications in her study do not emerge from the interaction order itself, but from the cultural meaning of the labels “office” and “light operator.” The participants in Zucker’s experiment were embedded within American culture; hence, the cultural significance of the labels “office” and “light operator” and what they prescribe for appropriate behavior. Her experiment, while offering evidence for the micro-phenomenology that underlies institutionalization, is conditional on higher-level cultural understandings at the societal level. My account of the Zucker (1977) experiment illustrates my thesis that a cross-level sociocultural phenomenological account of institutions provides a more coherent theoretical understanding than existing approaches that do not consider cross-level effects.

Objectivation

Objectivation is the process by which typification of role structures and interaction orders become perceived as an objective reality rather than a subjective classification by the group of individuals who originally generated the typification. Objectivation first emerges through the direct phenomenological experience of organizing practices by a wide variety of actors over time and across organizational contexts. Objectivation is further strengthened when the typifications are culturally transmitted through stories, narratives, and theories. More specifically, objectivation occurs through collective typifications of routine interactions by types of actors and roles and their reproduction through shared language and non-linguistic symbols. These collective typifications are shared by participants and their existence is experienced as objectively real (Berger & Luckmann, 1967).

Building on prior institutional research on materiality (Jones et al., 2017), I further argue that objectivation is most likely when the typification of roles and interactions is directly associated with the material artifacts associated with observable practices. The phenomenological experience of material artifacts facilitates the ascription of objectivity to artifacts and, in the process, to the associated roles, relationships, and interactions. As the routinized typifications and behavioral scripts by which they are enacted are socially reproduced, their human origins recede from memory and become the natural order of things. Objectivation becomes an established part of the vocabularies of organizing (Loewenstein et al., 2012), labeling categories for roles, relationships, interactions, and artifacts, providing concrete exemplars for them, as well as linguistic markers for their co-occurrence.

The practice of hospital medicine illustrates the process of objectivation and how collective typifications emerge from local ones. Wachter and Goldman, in an article published in the New England Journal of Medicine (1996), discussed the typification of a variety of similar roles and practices across the United States in the late 1980s and 1990s, where internal medicine specialists did not practice outside the hospital, like most attending physicians, but instead practiced medicine exclusively within the hospital. He labeled the practice “hospital medicine” and the role “hospitalists,” providing examples of their relationships and interactions with other institutionalized (and thereby previously typified) medical and administrative roles, and labeled the responsibilities associated with their roles. Prior to this proposed typification, the routinized roles, relationships, and responsibilities of “hospitalists” previously existed. Still, they were not always labeled as such, nor were the examples provided viewed as members of a common category across hospitals. They were instead typifications specific to individual organizations.

Wachter and Goldman’s typification of “hospitalists” and “hospital medicine” could have remained the subjective categorization of a form of hospital practice, one utilized by a limited number of individuals, even eventually forgotten. Yet eight years later (Wachter, 2004), “hospital medicine” and “hospitalists” became objectivated typifications, with 4,000 members in the Society of Hospital Medicine and the diffusion of the practice and its typifications to a sizable number of teaching hospitals. But the association of hospitalists with managed care organization was a point of contestation as the identity of hospitalists became threatened (Pouthier et al., 2013) and their financial stability was not yet firmly established (Wachter, 2004). While objective facts, the hospitalist role and the practice of hospital medicine were not yet institutionalized, neither taken for granted nor were its norms uniformly sanctioned or agreed upon. As illustrated by the example of hospital medicine circa 2004, objectivation, and the collective typifications they entail, is a critical path in the process of institutionalization—but not sufficient in and of itself.

Sedimentation

From a phenomenological perspective, sedimentation is the process that transforms objectivated roles, interaction orders, and associated artifacts from cultural blueprints that may or may not persist through time into durable institutions. Yet the process of sedimentation, despite its centrality to institutionalization, remains unclearly theorized and understood. Berger and Luckmann (1967, pp. 67–72) emphasize how sedimentation is generated through collective memory, experienced phenomenologically by practitioners, and transmitted from generation to generation and from collective to collective through language. Tolbert and Zucker (1999, p. 184) emphasize instead that sedimentation occurs through the “virtually complete spread of structures across the group of actors theorized as appropriate adopters, and by the perpetuation of structures over a lengthy period of time.” In their view, normative processes provide the impetus for sedimentation, and the generation and transmission of institutionalized knowledge are not explicitly considered. Others (e.g., Cooper et al., 1996) define sedimentation as the layering of institutional components into preexisting organizational and institutional configurations.

I adopt a more expansive account of the sedimentation of institutions, which includes the social construction of knowledge, the embodiment of that knowledge in practice, and the establishment of a network of role practitioners who recruit and socialize other practitioners and normatively sanction their practices. More specifically, sedimentation is the emergent process by which institutions are generated through collective knowledge of the typified roles and interaction orders, the embodiment of that knowledge in recurring roles, interaction orders, and material artifacts, and the generation of a network of role practitioners committed to the social reproduction of both the typified knowledge of roles and interactions across generations and diverse social contexts.

Collective agreement on the typification of the institution and its component roles and interaction orders is part of the sedimentation process—hence the centrality of typification (Furnari, 2019). As a requisite for sedimentation, practitioners legitimate typified roles, interactions, and artifacts across generations and social collectives, as well as socialize other practitioners in the knowledge of those typified roles and practices and the normative values they represent. Through their sedimentation, collective typifications are experienced as persistent and unavoidable social realities, external to individuals, and resistant to change. Through sedimentation, objectivated role structures and interaction orders become taken for granted and normatively sanctioned—hence, institutionalized.

More generally, sedimentation is generated and reproduced through committed networks of role practitioners with specialized knowledge and know-how of institutionalized practices. Role practitioners, such as the hospitalists described above, identify with the roles they perform and the values and attitudes appropriate for their roles, and learn both cognitively and emotionally the social system of actions and interactions that roles typify. Role practitioners are the agents by which institutional entrepreneurship (Battilana et al., 2009) and institutional work (Lawrence et al., 2009) are carried out across generations and social groups. At the same time, they are embedded within social networks of other role practitioners further facilitating the typification of roles and interactions they typify.

The centrality of role practitioners in the sedimentation of institutionalized typifications, while not theorized by them, is consistent with Berger and Luckmann’s (1967, pp. 77–79) discussion of roles, role performance, and the social distribution of knowledge that underlies institutionalization. Given the division of labor, social distribution of knowledge is accumulated by role practitioners occupying diverse roles within institutions. What is not made explicit in Berger and Luckmann’s account is that without a network of role practitioners being socially reproduced across time and place, sedimentation of knowledge and practice, and consequently institutionalization, would not be possible. Role practitioners enact institutions through the recurring organizing practices they inhabit (Hallett & Ventresca, 2006). Given role specialization, sedimentation is generated by the co-constitution of knowledge, practices, and networks of specialized role practitioners. In the example of hospital medicine, a network of committed role practitioners—hospitalists, other physicians and medical providers, hospital management, insurance companies, specialized, for-profit medical groups employing hospitalists, and the Society of Hospital Medicine itself—were all central to the sedimentation process.

The networks of role practitioners continue to reproduce institutions through socialization and normative sanctioning. Berger and Luckmann (1967) theorize that socialization is how institutions are learned and enacted by new practitioners. Socialization is both cognitive and normative, a mechanism for learning how institutions operate and sanctioning practitioners deviating from institutionalized norms, practices, and meanings. Thus, through socialization, collective typification of role structures and interaction orders that comprise institutions become not only objective reality, but both taken for granted and normatively sanctioned. Rather than consider cognition and norms as two separate pillars of institutionalization (cf. Scott, 1995), they work in tandem to produce and reproduce institutions and their sedimentation across time and place.

This description and theorization of sedimentation and, thereby, institutionalization is, admittedly, a restrictive one. Yet the boundaries between the status of objectivation and sedimentation are overlapping and need to be clearly demarcated, particularly not when the processes are still occurring. The example of hospital medicine and its development over time illustrates the evolving process of institutionalization and the overlapping boundaries between objectivation and sedimentation. By 2004, hospital medicine could be characterized as an objectivated practice and hospitalists as an emerging institutional role. But in the United States, a nation of over 7,500 hospitals that year, it would be difficult to argue that 4,000 self-identified hospitalists constituted a taken-for-granted role, particularly given that individual hospitals employ multiple hospitalists and not only one—i.e., at the time most hospitals did not employ hospitalists; hence, the role was not sedimented or institutionalized. By 2020, the Society of Hospital Medicine estimated that there were 60,000 physicians practicing as hospitalists. Hospitalist had by that time become a taken-for-granted, institutionalized role in the United States, the same as other hospital specialties—surgeons, internal medicine, emergency physicians, among numerous others (Pouthier et al., 2013).

The Macro Structure of Institutions

The paper so far has focused on Berger and Luckmann’s micro-phenomenological approach while adding that institutionalization is generated not only through the social construction of knowledge of institutions but through the embodiment of that knowledge by a network of role practitioners. I argue that a macro approach to institutions and their social construction is an essential complement to a micro-phenomenological perspective. First, I posit that Berger and Luckmann’s characterization of an institution as the reciprocal typification of roles and action level or roles and interaction orders does not consider their interdependence with other roles and interactions within an organized system. For example, according to Berger and Luckmann’s definition, the reciprocal relationship between a professor and student, and the instruction their interaction conveys, would by itself constitute an institution. I will argue instead that, more consistent with conventional usage of the term institution (cf. Hughes, 1936), it is the university, as an established system of roles and interactions, that constitutes the institution, while the roles of professor, student, and the practice of instruction constitute a micro-institution within the university, along with multiple other micro-institutions, including student admissions, grading, administration, collegiate sports, and graduation (cf. Barley, 2019).

Second, I propose that the locus of sedimentation, and hence institutionalization, occurs at multiple levels—geographic communities, organizational fields, societies, and the world system; levels are culturally embedded with higher levels. For example, Lounsbury (2007) examined how mutual funds were originally institutionalized at the community level in the early 20th century by a Boston-based group of investment management firms, following a trustee logic and utilizing conservative investment practices that favored wealth preservation. Subsequently, the sedimentation of this micro-institution shifted from the Boston community to the organizational field of financial management. Finally, with the de-institutionalization of pensions by US governments and businesses and the widespread diffusion of defined contribution plans for retirement savings, the network of practitioners committed to mutual funds became sedimented beyond the organizational field of financial management field to US society and its institutional order of the market.

Third, I theorize that the typification, objectivation, and sedimentation of institutions are embedded across levels of analysis, from communities and organizational fields to societies and the world system. The social construction of institution is not a purely local phenomenon, but is shaped by cultural knowledge that is shared, at least partially, across higher levels of analysis. ⁷ Furthermore, institutions are not socially constructed de novo. For example, the institution of hospital medicine, which first emerged in the 1990s and became institutionalized in the 21st century, was culturally embedded both within the organizational fields of hospitals and the institutional order of professions, both as constituted in the United States and more broadly in the world system. The existence of an institution of hospital medicine in Great Britain, with its National Health Service, predated that of the United States and provided cultural toolkits for the US hospital system.

In discussing the macro structure of institutions, it is essential to clarify that institutional hierarchies are not fully nested, unlike Russian dolls, which are (cf. Fligstein & McAdam, 2012). Geographic communities, nation-states, and the world system are nested structures—communities are usually contained within nation-states, and societies within the world system. At the same time, organizational fields are not always nested; they may cut across communities, societies, nation-states, and the world system. But institutionally, the sedimentation of institutional structures is not nested across hierarchical levels, as the environment of organizations cuts across distinct communities, organizational fields, and institutional orders, and, for multinational organizations, across distinct societies.

To illustrate, the Roman Catholic Church—an institution sedimented and institutionalized across the world system, operates across the full spectrum of hierarchical levels, with sedimented variations within each. Micro-institutions of the Catholic Church, including masses, communion, confession, choirs, weddings, catechism, and charity care are sedimented through the world system, yet experience institutional variations within communities, societies, and organizational fields. Catholic churches and other organizational forms operate across thousands if not millions of geographic communities throughout the world, regulate the operation of a similar multitude of formal organizations, and are part of a variety of organizational fields that transcend the Catholic Church—schools, universities, hospitals charities, museums, publishers, and others—each of these being its own institution.

Micro-institutions

Berger and Luckmann’s micro-phenomenological perspective focuses on roles and interactions becoming institutionalized through the processes of typification, objectivation, and sedimentation. A cross-level perspective on social construction emphasizes, however, that institutionalization, particularly the sedimentation of local roles and interactions, is embedded within higher-level social and cultural structures. As noted by Barley (2019), institutionalized interaction orders, and I would add their associated roles, can be characterized as “micro-institutions,” the building blocks of everyday life contained within a social system of roles and interactions within or across institutionalized organizations and organizing systems (Furnari et al., 2020).

Role structures provide a critical linchpin that link micro-institutions with institutionalized social systems. Nadel (1957) proposed a theory of social structure that, like Berger and Luckmann’s phenomenological approach to institutions, made roles a primary theoretical component. But Nadel gave primacy to role structures and relationships over cultural typifications in his theoretical development. While recognizing that the non-relational (i.e., cultural) components of roles were consequential, his focus on developing abstract theory characterized role relationships in terms of either authority or control over resources. This failure to incorporate cultural typification of roles and role interactions is what DiMaggio (1993) characterized as “Nadel’s paradox.” While implicitly recognizing the cultural and institutional provenance of roles and role relationships, Nadel provided an impoverished account of roles by relying strictly on social structure and ignoring cultural structure. DiMaggio (1993) argues that explicit incorporation of both cultural and social structure is necessary to understanding organizations and institutions, as well as the micro-macro mechanisms underlying institutionalization.

Given a functional division of labor, members of social collectives will create functional interdependencies between individually typified actions and interactions and the formal and informal organizations by which they are generated. For example, weddings and wedding receptions, highly institutionalized micro-institutions, are functionally dependent on the institution of marriage; similarly, a marriage will not exist without a civil or religious wedding ceremony. Functional interdependencies may be reciprocal, sequential, or pooled (Thompson, 1967). The argument I propose is that typified interaction orders that are functionally interdependent with other typified interaction orders cannot be sustained and reproduced absent a higher-order system of roles and interactions—within formal and informal organizations. Formal and informal organizations coordinate the production and reproduction of a decomposable set of interaction orders—boards of directors, C-suites, departments, and organizational subunits—with a structured set of roles with the rights and responsibilities to enact the interaction orders. Hence, micro-institutions cannot exist independently of the institution of which they are a component.

Similarly, the role structures of micro-institutions that generate interaction orders are structurally and culturally embedded within higher-level institutional formations—organizations, communities, and organizational fields. Relying on the example of US board of director activities, the board of directors only exists within the structure of US-style corporations; it is not independently sustained without the existence of the corporations of which they are components, and thereby not an independent institution in itself. The monitoring and advisory functions of boards of directors require the coordination of activities and interactions beyond board meetings for that function to be accomplished. At a minimum, the selection of board members, the preparation of meeting agendas, and the production of financial and legal documents for board members to review are functionally interdependent activities, and interactions without which board participants would not exist and board meetings would have no typified meaning. Furthermore, the financial resources required to operate board of director activities depend on the corporation of which they are a part. Hence, the sedimentation and thus institutionalization of boards of directors is contingent on the sedimentation of the corporation as an institution.

Per DiMaggio’s (1993) characterization of “Nadel’s paradox,” institutions are simultaneously social and cultural systems. The system of roles within an institution generates a social structure of typified roles (cf. Nadel, 1957). The typification of roles is not only reciprocal but part of a broader network of roles. The typified content of these roles and their interactions generates a cultural system for the institution. In general, I argue that functionally specialized organized roles and interactions, when typified, objectivated, and sedimented, constitute micro-institutions within the larger social organizations in which they operate. For US-style business corporations, typical micro-institutions other than boards of directors include senior executive offices (and their officers), functional departments (e.g., finance, accounting, marketing, sales, operations, human resources, legal, research and development), shareholder communication (e.g., meetings, annual reports), and analyst communication. Other corporate micro-institutions such as mergers and acquisitions, strategic alliances, and supply chains are also institutionalized, albeit in this case are component micro-institutions of organizational fields, rather than of individual corporations. In these examples, their diffusion (i.e., sedimentation) across corporations is less universal and more dependent on corporate age and size and line of business.

Micro-institutions are prevalent not only in business corporations but across all institutional orders. Examples are as diverse as fundraising, federal elections, stock market trades, university senates, Catholic masses, and weddings. Furthermore, such as in the example of corporate boards of directors and their component institutionalized practices, micro-institutions may exhibit a hierarchical structure in themselves—e.g., sermons in the case of masses, and ceremonies and receptions in the case of weddings.

Institutional sedimentation and its embeddedness within institutional orders

Earlier I proposed that institutions be understood as residing at the level of formal and informal organizations, and that micro-institutions as their component institutionalized practices dependent on the institution for its functional existence. The level that social networks of practitioners are observed constitutes the level of sedimentation of institutions and their component micro-institutions. I emphasize two levels at which sedimentation occurs—geographic communities and organizational fields, although the latter may reside at different geographical levels: regions, nations, groupings of nations, or the world system. By noting that the level of sedimentation transcends individual organizations, the cross-level process of institutionalization is highlighted. Furthermore, sedimentation within geographic communities and organizational fields is itself embedded within the institutional orders of society and the world system, as discussed below.

Local geographic communities are the most basic level at which institutional sedimentation occurs. For example, in Lounsbury’s (2007) analysis, the typification of mutual funds became originally institutionally defined and reproduced in the city of Boston, with its more traditional set of values and beliefs, with the institutionalization of the trustee logic occurring at the level of the Boston community. Another example of institutional sedimentation at the level of geographic communities is the bodega, small grocery stores in New York developed by Puerto Rican immigrants to the city, becoming not only a type of business but also a taken-for-granted center of Puerto Rican, and subsequently more broadly, community life in New York City.

Selznick’s (1949) influential study of the Tennessee Valley Authority (TVA) also exemplifies community-based institutional sedimentation. An essential aspect of Selznick’s open systems view of institutionalization is that the participation and influence of external constituencies strongly influenced the institutionalization of practices at the TVA. Here we see an example of how external stakeholders are a critical part of the network of practitioners that results in institutional sedimentation. The local agricultural extension service and local agricultural landowners were instrumental in changing TVA’s original land preservation policies and developing alternative practices more consistent with external agricultural interests than the TVA’s initial land preservation goals. This demonstrates how the TVA and its practices became institutionalized through a community of role practitioners, which included both internal employees and external stakeholders. In the case of individual organizations whose practices and activities and the organization itself become institutionalized; the sedimentation process remains, in many cases, at the level of geographic communities. In these instances, institutionalization is more dependent on the values associated with the mission and purpose of the organization (Selznick, 1957) and the network of role practitioners, including external stakeholders, that sustains its practices and values.

With developments in transportation, communication, and information technologies, the locus of sedimentation of typified categories of organizations and organizing practices shifted from the community to organizational fields (DiMaggio & Powell, 1983)—hence the prevalence of field-level analysis in research in organizational institutionalism. Organizational fields may be structures at the level of the nation-state as is for the institutions of hospital medicine describe above. The broader institutions of medicine and many of its specialties—surgery, psychiatry, radiology—can be characterized as sedimented within world-wide organizational fields, or “world society,” as characterized by John Meyer and colleagues (e.g., 1997), albeit with significant variations across regions and nations.

Society and its institutional orders

In the discussion of sedimentation across hierarchical levels, the emphasis so far has been on the institutionalization of distinct institutions, each with its own system of typified roles and interactions—a separate social and cultural structure. But institutions do not exist independently of each other, as they are embedded within society and its institutional orders. Hence, the sedimentation of an individual institution—e.g., medicine is shaped by one or more institutional orders—in the case of medicine generally by the professional order, in the case of hospital medicine by a combination of the institutional orders of the profession, corporation, state, and their underlying institutional logics (Thornton et al., 2012).

Berger and Luckmann (1967) developed the term “institutional order” to describe the sub-universes of knowledge by which institutions are created and sustained. Friedland and Alford (1991) proposed that society be viewed as a set of institutional orders—capitalism, the bureaucratic state, democracy, the nuclear family, and Christianity—where institutional orders are understood not only in terms of their symbolic meaning but also their material existence. Thornton (2004) modified Friedland and Alford’s typology and defined societal-level institutional orders to include the market, the corporation, the state, the family, religion, and the professions. This typology both generalized Friedland and Alford’s institutional orders and added corporations and professions. Thornton et al. (2012) further theorized institutional orders as a product of history and added the community as an institutional logic and order. This typology, although based on substantial research in the social sciences of distinct domains of institutional practices observed in modern Western societies, is meant as a methodological tool and not as an ontological claim that these are the definite institutional orders nor that they are universally valid across societies or history.

I propose that the distinct institutional orders be classified in terms of their distinct jurisdictional authority over the legitimate knowledge and practice of societal institutions (cf. Lounsbury et al., 2021). Societal institutional orders become not only sedimented but reified—perceived not as human products but as the natural order of things (Berger & Luckmann, 1967). Reification is a stronger form of institutionalization beyond sedimentation: Institutional orders are not just taken for granted, but the existence of life in the world becomes almost unimaginable absent the institution; this is the way the world, or at least our contemporary world, is supposed to be. Even when and if the historical provenance of institutional orders is acknowledged, there is a teleological consensus on their historical necessity. The reification of institutional orders lends them, and their jurisdictional autonomy, cognitive and normative legitimacy. Societal-level institutions and institutional orders across societal segments are thereby generated when they become taken for granted and normatively sanctioned by networks of role practitioners within one or more institutional orders.

Societal institutional orders and their corresponding institutional logics, to be discussed below, provide the networks of role practitioners’ sources of cognitive and normative legitimacy for institutionalization to occur. Legitimacy is often conceived as a resource for instrumental gain (Dowling & Pfeffer, 1975; Suchman, 1995). But legitimacy goes beyond external justifications for organizations and institutions. Legitimacy conveys cognitive and normative appropriateness to institutional roles and practices (cf. March & Olsen, 1989). The argument here is that the sources of legitimacy are ultimately derived from the institutional orders of society, both at the level of individual nations and, more broadly, the world system.

In the post-World War II period, the state has become a widely diffused institutional order across societies, with international organizations such as the United Nations, the World Trade Organization, and the International Court of Justice further generating an institutionalized culture at the level of the world system (Meyer et al., 1997). While significant cross-country variation continues to exist, the institutional orders of the world system increasingly shape institutional formation. Both the professions and the market are increasingly global institutional orders, exerting macro-to-micro effects across levels of analysis.

Institutional logics

Thornton and Ocasio (1999, p. 804) defined institutional logics as “the socially constructed and historical patterns, historical patterns of cultural symbols and material practices, assumptions, values, and beliefs by which individuals produce and reproduce their material subsistence, organize time and space, and provide meaning to their daily lives.” This definition is evocative and widely cited, but its complexity may sometimes obfuscate rather than illuminate (cf. Glynn & D’Aunno, 2022). Here I will try to unpack its intended meaning and what institutional logics, or the logics of institutions (Berger & Luckmann, 1967), entail, and how they can be applied in the context of the hierarchy of institutions discussed so far. The social construction of institutional logics derives directly from the social construction of the knowledge and practice of institutions; social construction is a historical process, hence their historical feature (Ocasio et al., 2016). Pattern is the key operative word in the definition of institutional logics. The logic of institutions is derived from the pattern by which institutional role structures and interaction orders are generated. Institutions “hang together” both culturally and structurally. Although institutions and institutional orders are not wholly consistent, neither are they without cultural coherence, a cultural coherence experienced by institutional practitioners through the pattern of cultural symbols and material practices. The logical pattern of institutional symbols and practices is further sustained through practitioners’ assumptions, values, and beliefs regarding the institution.

The resulting patterns provide role practitioners with identities and schemas not only for the routine enactment of interaction orders but for guidance for non-routinized actions as they “produce and reproduce their material subsistence, organize time and space, and provide meaning to their daily lives” (Thornton & Ocasio, 1999, p. 804). The analysis of institutions in this paper began with an exploration of the routinization of roles and practices. Institutional logics rely on practitioners’ reflexive experience with the pattern of institutionalized roles and practices when facing non-routine events and circumstances in their daily lives. Institutional logics, as defined here, constitute sources of “embedded agency” for networks of role practitioners in social and organizational life (Thornton & Ocasio, 2008). Institutional logics structure managerial and organizational attention (Ocasio, 1997; Thornton & Ocasio, 1999), and in doing so establish the decision premises by which individual agency is exercised in the context of non-routine events (cf. Simon, 1947). Overall, this elaborated conception of institutional logics indicates that institutional logics emerge as a set of guiding principles that regulate, both cognitively and normatively, the taken-for-granted practices of institutions—not only for routine activities but for non-routine ones.

Thornton and Ocasio’s (1999) definition above can be understood as a theoretical elaboration of the emergence of the guiding principles for institutional logics, their content, and their use in everyday life practices. Institutional logics, like institutions more generally, span across hierarchical levels. We can ascribe an institutional logic to an organization, a type of organization, an organizational field (assuming some level of cultural coherence, although alternatively, organizational fields may exhibit competing logics), and to institutional orders (Ocasio et al., 2017). This conceptualization is consistent with Berger and Luckmann’s conceptualization of the logic of the institution (as defined by the nexus of role practitioners) but differs from those that ascribe institutional logics only to the societal level and its institutional orders (cf. Friedland & Alford, 1991).

Institutional Blueprints for Organizations and Organizing

This paper has emphasized the cross-level process of the social construction of institutions as organized system of roles and interactions. Here we clarify the relationship between institutions and individual organizations and their organizing practices. Organizations, like institutions, are human creations with specialized roles for human action and interaction of widely diverse kinds. A common conception is that organizations and institutions are distinct social entities, or at least that not every organization is an institution (e.g., Selznick, 1957) or, alternatively, that institutions are properties of the external environment of organizations (Meyer & Rowan, 1977; DiMaggio & Powell, 1983). The alternative view here is that institutions and their combinations, with modifications, are constitutive of organizations, as building organizations always start from an institutional foundation, and similarly, organizing practices emerge from the reproduction, modification, and combination of existing micro-institutions. Therefore, every organization, or form of organizing, has institutional components, not only externally, but also internally.

Whether we are creating a business or nonprofit organization or organizing the community, existing institutions provide a blueprint for our roles and practices through the socially constructed knowledge of what organizing activities entail. Institutional blueprints provide a default for organizations and organizing, a default that can be modified through the prism of individual knowledge and experience (Heugens & Lander, 2009). Institutions also provide sources of innovation both through institutional recombination as well as analogies to draw upon in generating new forms of organization and organizing. Institutional deviants are possible, but even the acts of deviance result from the failure of institutional knowledge or defined in contraposition to existing institutions. Toolkits for deviation from institutionalized structures and practices when knowledge from one institutional logic is applied to a context where other institutional logics are dominant. The availability and accessibility of a differentiated set of institutional logics allow institutional logics to serve as toolkits for new sources of action and interaction that combine institutional logics (Thornton et al., 2012).

The ubiquity of institutions as blueprints for organizations and organizing does not mean that institutions are fully determinative of roles and practices. Institutions are the ostensive components of roles and interactions orders, but the performative aspects of institutional enactment allow for significant variability and improvisation (cf. Feldman & Pentland, 2003). Furthermore, material affordances impinge on organizing in ways that are often separate from institutions, although their repeated effects can become routinized, typified, and ultimately institutionalized (cf. Leonardi, 2011).

Discussion

This paper provides a theoretical perspective on what institutions are and are not, and explicitly takes a stand on the ontology of institutions—one that I believe is important to delineate, as it is not universally shared by scholars in the community of organizational institutionalism. As stated in the introduction, the ontology of critical realism taken here implies that the macrostructure of institutionalized forms of social organizations proposed here—geographic communities, organizational fields, societies, and the world system—are not merely analytical constructs but that they exist in the real world, at least in our contemporary world, with its division of labor and existing institutional orders. The claim is not that the specific cross-level structure of institutions presented here is an anthropological constant but that in modern societies, organizational fields and societal, institutional orders have emerged historically, which operate at levels above local groups or communities, and that societies and their institutional orders operate within a world system of institutions.

The partial autonomy of levels

A central claim of the paper, which should be made explicit, is the partial autonomy of levels of analysis. Organizations, geographic communities, organizational fields, society, and the world systems are not merely aggregations of individual or social behavior and practices but emergent structures that have causal effects over lower-level structures. Lower levels, including individuals and groups, also have causal effects over higher levels, not to mention they are critical for their maintenance of reproduction; the sedimentation at higher levels, particularly society and the world system, is likely to be more permanent, although at the same time more general and abstract than more specific behaviors and practices observed at lower levels of analysis. As noted by Harmon et al. (2019), foregrounding levels of analysis emphasizes the causal and recursive relationships between phenomena at different levels, from world systems and macro societal to individual and in-between. Embedded agency is part of the story, but embeddedness is not merely about individual agency being embedded in societal institutions but also in geographic communities, organizational fields, societies, and the world system.

The ubiquity of institutions and their limits

With the emphasis on institutions and institutionalized blueprints for organizations and organizing, the ubiquity of institutions is a central theoretical claim (Ocasio & Gai, 2020). Yet, as critics of institutional analysis (Alvesson & Spicer, 2019) rightly maintain, institutional explanations may be overused, and other factors such as power, status, demography, resource dependencies, cognition, emotions, identity, and meaning have effects that are not reducible to institutions. While it is helpful to examine the institutional manifestations of these multitude of social and psychological processes, their ontological existence is not a property of institutions.

The functional basis of institutions

Neo-institutional theory emerged, at least in part, as a reaction to contingency theory (Lawrence & Lorsch, 1967; Thompson, 1967), with its emphasis on functional explanations for organizational structures; even earlier versions of institutional theory (Parsons, 1956; Selznick, 1957) distinguished between the functional/technical basis for organizations and the institutional basis. ⁸ Without equating functionality with efficiency or historical necessity, the view of institutions presented here explicitly argues that institutions and micro-institutions provide a function for the nexus of role practitioners that contribute to its sedimentation, at least initially (cf. Tolbert & Zucker, 1983). The functionality of institutions is not limited to economic or technical functions. Institutions serve a wide gamut of human motivations, from sexual desires to the need for a transcendental order in the universe to provide a sense of ontological security (cf. Giddens, 1984). Humans live their lives beyond work and material consumption, and institutions serve to provide a set of functions to satisfy human material, social, and ideal interests, as culturally and historically defined. Family and communal institutions are, in a broad sense, functional, as are institutions associated with all other institutional orders. Without accomplishing some of the various functions of value to networks of practitioners outlined above, institutions would not become sedimented and hence institutionalized.

The sedimentation of institutions creates structural, cultural, and political forms of inertia that limit institutional change. Institutional formations are path dependent, so the functional consequences at the period they became sedimented and imprinted may not be as prevalent as institutions persist. Institutions are not designed to meet current functional needs. Neither are they, in most cases, efficient. But rather than separate the institutional from the functional basis of organizations and organizing (cf. DiMaggio & Powell, 1983), a more useful empirical strategy would be to examine the functional origins of institutions and micro-institutions and how these functional origins are reflected in their historical origins and imprinting (Stinchcombe, 1965).

Conclusion

This paper contributes a novel theoretical integration of macro and micro approaches to the social construction of institutions, one that emphasizes the social and cultural embeddedness of their phenomenological experience. It explores how institutions are enacted across levels of analysis—from individuals’ phenomenological experience of roles and interactions to their embodiment in the social system of organized roles and interactions and to how institutionalized organizations are embedded within communities, organizational fields, society, and the world system. In my judgment, the question of levels of analysis is a major source of confusion regarding the scientific validity of institution analysis and of the term institution itself (cf. Alvesson & Blom, 2022). Since Meyer and Rowan (1977), a large part if not most of the institutional analysis has been more macro, explicitly about the environment of organizations—society and the organizations fields, even as approaches such as inhabited institutions, institutional pluralism, and institutional work have focused on organizational-level manifestations of macro-institutions. Confronting the question of levels of analysis head-on, this paper identifies mechanisms by which micro-institutions emerge at the intra-organizational level and institutionalization is shaped across the multiple levels of geographic communities, organizational fields, or society and its institutional orders.

Adopting Berger and Luckmann’s analysis of the typification, objectivation, and sedimentation of institutions and their component roles and interactions provides a theoretical guide to what is and what is not an institution—another source of confusion by practitioners and critics of institutional analysis alike (Alvesson & Spicer, 2019; cf. Ocasio & Gai, 2020). Institutions, through their vocabularies, have a name, and conducting institutional analysis should require identifying the institution being studied and its name (Ocasio et al. 2014). In particular, the theoretical approach indicates that collective typifications of roles and interactions are necessary building blocks of institutions. While practice approaches to institutions, which do take account of interactions, have become in some form or another increasingly prevalent, for the most part, roles are ignored. Unless both role structures and interactions become sedimented, in my judgment, researchers should not claim they are studying institutions or institutionalization.

By developing an expanded conceptualization of sedimentation, the paper also contributes to understanding institutionalization and the levels of analysis in which it occurs. For Berger and Luckmann (1967), sedimentation is a property of socially constructed knowledge; Tolbert and Zucker (1983) emphasized widespread diffusion. Here I emphasize that the generation of a committed network of practitioners, including roles occupied by external stakeholders, is a critical component of sedimentation. Institutions are generated and reproduced by a network of practitioners who rely on socially constructed knowledge of roles and practices to embody that knowledge materially. These networks of role practitioners reside at the levels of a geographic community, organizational fields, the broader society, or the world system—levels that determine the locus of institutionalization. More generally, the network practitioners are culturally and structurally embedded across levels of analysis; the social construction of institutions is not created de novo but is culturally and structurally embedded across different hierarchical levels.

The paper also develops the concept of micro-institution to characterize institutionalized role structures and practices observed at the intra-organizational level. The core idea is that micro-institutions are functionally dependent on other organizational-level micro-institutions for their continuity. Consequently, they do not have a nexus of role practitioners that operates independently. Functional independence also implies role embeddedness; the role structures of micro-institutions are not separable from the broader institutions or organizational fields of which they are part.

The paper’s overall contribution is conceptual and theoretical (Cornelissen et al., 2021): It clarifies and modifies institutional concepts and develops a cross-level theory that explains their interrelationship. This conceptual and theoretical synthesis provides a response to critics of institutional theory, insiders and outsiders alike, that institutional theory is not a coherent theory but a combination of disparate theoretical mechanisms, and ones where the relationships and distinctions between organizations, culture, and institutions are not always clear or consistent. The synthesis posits that institutions are sociocultural constructions that provide blueprints for organizations and organizing, and therefore are always present if not always in the foreground of organizational phenomena. Similarly, the synthesis emphasizes how micro and macro-institutions are not two disconnected phenomena, but ones shaped by the sociocultural phenomenology of networks of committed practitioners, embedded across levels of analysis—organizations, geographic communities, organizational fields, and the world system. Despite its complexity, the theory is not comprehensive, and important phenomena such as values and emotions have received less attention here. The emphasis has been on the taken-for-granted nature of institutions, their criticality for organizations and organizing, and why institutions are thereby central to organization theory.