DiMaggio vs Hannan & Freeman on Emergence of New Organizational Forms (exam question by Keith Rollag)

I will first explain these two perspectives on emerging organizations, and then compare and contrast them.

DiMaggio on Emergence of New Organizational Forms

As an institutional theorist, DiMaggio emphasizes the influence of social and governmental forces on new organizational forms (Scott p. 118). Specifically, he observes that governments and professional organizations can facilitate the creation of specific organizational forms by influencing the structure of the organizational field (DiMaggio, 1991).

DiMaggio and Powell define the organizational field as those competitors, regulators, suppliers, and consumers that collectively "constitute a recognized area of organizational life" (DiMaggio and Powell, 1983). New organizational forms will diffuse through the organizational field via coercive, mimetic, and normative processes. While the adoption of certain forms can occur at the local level, the choice of organizational form is often influenced at the field level through the action of governmental agencies and professional associations (DiMaggio, 1991).

For example, DiMaggio examined the history of art museums to demonstrate how philanthropic agencies and a growing museum professional organization guided the emergence of the "educational museum" at the national level (DiMaggio, 1991). The Carnegie Corporation affected museum development via the types of projects it sponsored, and the American Association of Museums rapidly disseminated national norms that were adopted by association members within local museums (p.268).

Hannan & Freeman on Emergence of New Organizational Forms

As population ecologists, Hannan & Freeman emphasize that new organizational forms emerge via the processes of natural selection. New organizations with structures that are more efficient in the current environment eventually "squeeze out" organizations with older, less efficient forms (Hannan & Freeman, 1989).

As new forms succeed, they gain legitimacy in the overall population and spur the creation of similar organizations (Carroll & Hannan, 1989). As organizational density increases the competition for limited resources will increase organization mortality, reducing the number of organizations. Carroll and Hannan examined the history of newspaper organizations to demonstrate this non-monotonic behavior of emerging organizational forms (Carroll & Hannan, 1989).

Similarities Between DiMaggio and Hannan & Freeman

Both perspectives focus analysis above the level of a specific organization, and both emphasize a long-term historical view. DiMaggio, Hannan, & Freemen also agree that legitimacy is an important determinant for organization survival, and that there are strong pressures to imitate "successful" organizations.

More recent work by Hannan & Freeman also acknowledge the impact of environmental dependencies on new organizational forms, integrating somewhat the institutional approach of DiMaggio (Hannan & Freeman, 1989).

Differences Between The Two Perspectives

Theorists like DiMaggio emphasize the impact of institutional norms and policies on the emergence of new organizational forms, while population ecologists emphasize organizational efficiently and selection. DiMaggio's "organizational field" is also wider and more encompassing than the "population level" of Hannan & Freeman.

More importantly, DiMaggio assumes that organizations can adapt their structure to conform to institutional pressures (DiMaggio, 1979). Hannan & Freeman believe that organizations rarely can adapt their structure and eventually disappear when environmental changes make them uncompetitive (Hannan & Freeman, 1977). In fact, they believe the factors that contribute to success of a new form (consistency, accountability) reinforce the organizational inertia that leads to eventual mortality (Hannan & Freeman, 1989).