Martin et al., (2007, p. 722) define ‘ceremonial conformity’ as a superficial change in behaviour that does not result in any long-lasting changes in behavioural patterns. In 'ceremonial conformity' organizations ceremonially adopt certain institutional practices in order to gain legitimacy, as well as to reduce turbulence, maintain stability and
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increase survival prospects (Dowling and Pfeffer, 1975; Meyer and Rowan, 1977). In ceremonial conformity or ceremonial adoption, an organization might adopt highly visible and salient features of a particular practice (e.g. SBPR)that are consistent with institutional expectations, whilst leaving unaddressed the core issues related to that practice (e.g. living wage, freedom of association etc.). Meyer and Rowan (1977, 1978) give examples of how schools have enhanced their legitimacy by adopting certain bureaucratic practices thought to be consistent with rational management (e.g., teacher certification, categorization of classes and students, registering attendance), but which have little effect on actual teaching practices.
According to Meyer and Rowan (1977), conformity to institutional pressures often creates sharp conflicts with technical-competitive criteria or business interests. Here, Meyer and Rowan (1977) do not properly clarify what they mean by the term ‘conformity’. This study argues that substantive conformity to institutional pressures or practice creates conflict with technical-competitive criteria. To avoid such conflict organizations ceremonially conform to institutional pressure or ceremonially adopt an institutionalized practice. Here, ceremonial conformity allows organizations to conform to institutional expectations whilst also meeting technical-competitive criteria.
In the RMG sector, it is difficult for suppliers to adopt SBPR substantively or whole- heartedly as this often requires significant changes in core business policies and operations. Such an adoption process also requires substantive organizational commitments in terms of resource deployment and entails certain operational risks (Berrone et al., 2009). While substantive adoption improves an organization’s sustainability performance, it causes negative impact on its organizational competitiveness. For example, curtailment of long working hours, approval for trade unions or introduction of the living wage would increase firm’s operating costs, whilst reducing its organizational competitiveness, operational flexibility and profitability. On the environmental front, implementation of pollution prevention activities also requires expensive investment in cleaner technologies (Klassen and Whybark, 1999; Russo and Fouts, 1997). Deployment of these technologies is also highly complex and risky, as they require changes in systems, processes, and products (Aragon-Correa and Sharma, 2003).
In this study, “ceremonial conformity” as a theoretical construct has been used to examine a supplier’s SBPR adoption practice as a response to cascaded-down institutional pressure. This study will particularly seek to explore how the desire of IRs
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to attain institutional legitimacy creates conflict with a supplier’s business interests, and how a supplier resolves this conflict with the help of a “ceremonial conformity” strategy. As suggested by Meyer and Rowan (1977), ceremonial conformity strategy requires deployment of two interrelated devices: ‘decoupling’ and ‘logic of confidence’. The next two sections of this chapter will explain how, with the help of decoupling and logic of confidence, an organization can ceremonially adopt a practice in an effort to manage its relationship with important stakeholders, whilst making ceremonial compliance with the indirect (or cascaded down) institutional demands.
4.5.1 The concept of ‘Decoupling’
Decoupling is a useful strategy for firms seeking to balance institutional demands and practical considerations (Meyer and Rowan 1977). In decoupling, a firm makes symbolic compliance with institutional demands without making substantive changes. Decoupling has been characterized as an organizational strategy that allows firms to maintain their ‘legitimate status’ (Berrone et al., 2009) through the separation of appearance from actual implementation. This study puts specific emphasis on an organization’s external appearance (such as its public portrayal on its website or in its sustainability report). Decoupling entails an organization overemphasizing its positive aspects in order to mask its actual performance (Marquis and Qian, 2014). In this study, decoupling is defined as a situation where compliance with external expectations is mainly symbolic, and not effective (Fiss and Zajac, 2006).
According to Meyer and Rowan (1977, p. 353), the survival of some organizations depends on managing the relational demands, while others’ survival depends more on institutional demands. Whether an organization's survival depends primarily on relational or on institutional demands determines the extent of decoupling, i.e. the tightness of alignments between its appearance and its work activities. An organization might face problems in executing a decoupling strategy if its success depends primarily on institutionalized rules (Meyer and Rowan, 1977). In such cases the demand for efficiency will create conflicts with the institutionalized rules. The second element of ceremonial conformity, 'logic of confidence’, will be explained in the next section.
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4.5.2 The concept of ‘Logic of Confidence’
Meyer and Rowan (1977) have argued that in ceremonial conformity, stakeholders do not usually seek actual verification of the firm’s claims; rather they accept them based on the ‘logic of confidence’. To ensure the success of the ceremonial conformity strategy, organizations thus need to maintain high levels of confidence and trust among their stakeholders in order to continue their regular business activities or to pursue their own business interests whilst maintaining alignment with institutional prescription through symbolic facade. This symbolic facade includes the display of important features of adopted practice (in the case of SBPR a separate sustainability department or a fancy official designation) to build up positive perceptions amongst stakeholders without much substantive effect. This kind of exhibition is important to strengthen the confidence level of stakeholders, as it suggests to them that the organization is acting ‘in a proper and adequate manner’ (Meyer and Rowan 1991, p. 50). If stakeholders have strong confidence in an organization (i.e. positive perceptions), then it becomes comparatively easy for the organizations to sustain their ceremonial conformity strategy. Otherwise sceptical stakeholders may view the adoption of new practice as an indication of purely symbolic management.
It is argued that the sense of confidence and trust has more to do with organizational appearance than with demonstrations of actual organizational performance (Suchman1995). Educational organizations, for example, demonstrate that they are "right for the job" by displaying the structural traits of a "modern school" - classrooms, certified teachers, grade-level progressions, rather than by adopting specific pedagogical procedures or producing specific student outcomes (Suchman, 1995). By displaying proper elements of institutional practice, organizations seek to convince their stakeholders to act in good faith. Failure to display proper elements of institutional practice can threaten the continued flow of support from the stakeholders.
According to Meyer and Rowan (1991), inspection and evaluation by stakeholders can detect inconsistencies and deviations, and thus organizations seek to minimize inspection and evaluation in order to sustain the confidence of their stakeholders (Meyer and Rowan, 1991).Rather they prefer to employ ceremonial evaluation criteria (such as awards, accreditation, certification etc.) or to associate with other legitimate actors, values, or symbols in place of inspection and evaluation by stakeholders. For example, by obtaining an ISO 14001 certificate an organization can signal to its stakeholders its sound environmental management system. In this way, stakeholders
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are persuaded to believe in ceremonial façade based on the exhibited credentials of the organizations. They not only extend their support to organizational ceremonial façade but also commit themselves to ensuring things work out in the backstage. They engage in informal coordination, keep technical activities running smoothly and ultimately shield adopted practice from inspection and evaluation to avoid public embarrassment (Meyer and Rowan, 1977).
A key premise of institutional theory is that appearance, rather than a substantive conformity, is sufficient for the attainment of legitimacy (Oliver, 1991, p. 155). According to this view, substantive and symbolic management, proposed by Ashforth and Gibbs (1990) provide necessary support in operationalising a ‘decoupling’ strategy whilst maintaining stakeholders’ confidence and trust to achieve ceremonial conformity to institutional prescription without hampering organizational interests. The following section provides a brief discussion of these two concepts.