Institutional theory through viewing organisations as ‘multifaceted, durable, social structures and made up of symbolic elements, social activities and material resources’ (Scott, W 2014, p.48), the how of rules and routines (policies and procedures) applying in practice regardless of resistance to change (Mutiganda 2014, p.132). Institutional theory examines the causes of isomorphism: factors leading organisations to adopt similar structures, strategies and processes (Deephouse 1996, p.1024).
An organisation is characteristically bound by a set of social, political, economic and legal contexts, as the foundation for the operating rules (DeVaujany et al. 2014, p.282). Institutional theory shows this foundation evolving around requirements of conformity in pursuance of acceptance and legitimacy, the desire to be accepted (Deephouse &
Suchman 2008; Krell, Matook & Rohde 2016; Suchman 1995). Institutional pressures are a resemblance of a focal organisation to other organisations in its environment, or a
structure being a similarity among a set of organisations at a given point of time. That is the link with legitimacy, a status conferred by social actors or those who conform to strategies used by other organisations and recognised by regulators and the public as being more legitimate than those who deviate from normal behaviour (Deephouse 1996, pp.1024-1033). Legitimacy is gained by responding to institutional and environment pressures creating isomorphism (practices and structures) through coercive, normative and mimetic pressures. The organisation is the unit of analysis of the institutional
environment being both the external and internal institutions. Partnering with institutional actors is seen as important for legitimacy. Collectively these pressures are referred as isomorphic pressures due to different organisations engaging in similar behaviours to achieve legitimacy thereby becoming more similar over time or adopting similar
structures, strategies and processes (DeVaujany et al. 2014; Kauppi 2013; Krell, Matook & Rohde 2016; Mignerat & Rivard 2009). This is what (DiMaggio & Powell 1983, pp.147-148) see as organisations being structured into a field (at this stage noted as local government
199
and further discussed in 8.3.3) by the state (government statutes) whereby powerful forces emerge to lead them to become more similar to one another, leading to homogeneity in structure, culture and output without necessarily making them more efficient.
The NSW councils could be classified as legitimised through coercive pressures: the impact of the NSW LGAct (inclusive of the collective regulations) where councils are required to engage in certain actions with the regulatory bodies powerful enough to sanction or reward compliance. This is what Krell, Matook & Rohde (2016, p.684) call complying with regulations defined by government. While coercive pressure appears in this one example as appropriately categorised, an alternative is normative pressure where institutions, in this example being the NSW LGA, define and promote norms being procurement best practice, but cannot sanction compliance or non-compliance. The NSW LGA is both powerful and prescribed (under the NSW LGAct), although neither council Foxtrot nor Golf determined any explicit influence (Table 26). The NSW LGA is a professional association and therefore meets the determined qualities of influence through normative pressure (Krell, Matook & Rohde 2016, p.684; Meehan, Ludbrook & Mason 2016). Both coercive and normative are behaviours and actions which councils follow as taken-for-granted, formal or informal rules of how to conduct tender. Using the examples of NSW and adding Victorian councils with their confusing statutory requirements including three ineffectual LGAs and SA with their principal based statute, coercive and normative pressures do not appear to adequately explain legitimacy pressures sufficient for this research project.
The LGAs in the three states produce procurement best practice documents which create a form of institutional regulation with an implication of conformity, the institutionalised practice, therefore legitimacy regardless of economic benefit and irrespective as to whether councils intend to implement the documents and procedures or not. The argument is tender being a commercial practice and therefore the institutional social variant of economic is better able to explain council e-Tender and executive strategy. This follows the thinking of Ketokivi & Schroeder (2004, p.66) of being unable to make a clear distinction between normative and coercive pressures in functional operations. The third DiMaggio & Powell (1983) mechanism leading organisations to resemble each other is mimetic isomorphism and analysed using the institutional variant social mimicry through
200
the trait, outcome and frequency elements (Refer 7.2.3). Therefore the institutional theories of choice, continuing the own agenda theme of this DBA Dissertation will be strategic resistance (Oliver 1991), institutional logics (Greenwood, Hinings & Whetten 2014; Thornton & Ocasio 1999, 2008) and institutional variants (Haunschild & Miner 1997; Kauppi 2013). This is a direction supported by Ashworth, Boyne & Delbridge (2009, p.166) who see empirical studies of isomorphism usually only examine one organisational
characteristic. In practice for this analysis, it is difficult to isolate theories into select boxes due to cross-pollination, or when facing conflicting institutional demands (Pache Essec & Insead 2010, p.462). For the purpose of analysis and description, the institutional pressures and resistance elements will be reviewed individually.
7.2.1 Acquiescence
A more appropriate classification of the institutional pressures (Figure 21) is the strategic resistance of acquiescence (Oliver 1991, p.152), displayed in Table 46. Institutional theory draws attention to organisational behaviours as causal impacts to legitimacy (Deephouse 1996, p.1035), as opposed to market and resource forces and how strategic resistance can contribute to validity and survival of an organisation, particularly through passive
acquiescence.
Table 46 - Strategic (Passive) responses to Institutional pressures
Strategies (Passive) Tactics Examples Acquiescence Habit Imitate Comply
Following invisible, take-for-granted norms Mimicking institutional models
Obeying rules and accepting norms
Compromise Balance
Pacify Bargain
Balancing the expectations of multiple constituents Placating and accommodating institutional elements Negotiating with institutional stakeholders
Avoidance Conceal
Buffer Escape
Disguising non-conformity
Loosening institutional attachments Changing goals, activities or domains
Defiance Dismiss
Challenge Attack
Ignoring explicit norms and values Contesting rules and retirements
Assaulting the sources of institutional pressures
Manipulate Co-opt
Influence Control
Importing influential constituents Shaping values and criteria
Dominating institutional constituents and processes
Acquiescence sits at the start of the passive-active scale followed by compromise, with avoidance positioned mid-way, through to defiance and manipulation at the active scale