P. J. DiMaggio & W. Powell, "The iron cage revisited" institutional isomorphism and collective rationality in organizational fields", American Sociological Review, 48 (1983), 147-60.
Organizational structure, which used to arise from the rules of efficiency in the marketplace, now arise from the institutional constraints imposed by the state and the professions. The efforts to achieve rationality with uncertainty and constraint lead to homogentiety of structure (instituaional isomorphism).
"As an innovation spreads, a threshold is reached beyond which adiption provides legitimacy rather than improves performance".
Isomorphism is a "constraining process that forces one unit in a population to resemble other units that face the same set of enviornmental conditions". " There are two types of issmorphism: competitive and institutional, "Organizations compete not just for resources and customers, but for political power and insitutional legitimacy, for sicoal as well as economic fitness".
Three Mechanisms of Institutional Isomorphic Change
Pressures from other organizations in which they are dependent upon anc by cultural expectations from society. Some are governmental mandates, some are derived from contract law, financial reporting requirements "Organizations are increasingly homogeneous withing given domains and increasinly oganized around rituals of conformity to wider institutions"
Large corporations can have similar impact on their subsidiaries.
Uncertainty encourages imitation. Organizational models can be diffused through employee migration or by consulting firms.
These are pressures brought about by professions. One mode the the legitimization inherant in the licensing and crediting of educational achievement. The other is the inter-organizational networks that span organizations. Norms developed during education are entered into organizations. Inter-hiring between exisitng industrial firms also encourages isomorphism.
People from the same educational backgrounds will approach problems in much the same way. Socialization on the job reinforces these conformities.
The similarities caused by these three processes allow firms to interact with each other more easily and to build legitimacy among organizations.
Predictors of Isomorphic Change
Organizational level predictors
A-1: The more dependent on another organization, the more alike it will become
A-2: The greather the centralization of resource supply, the more it will change to resemble the organizations it is dependent upon
A-3: The more uncertainty the more an organization will model it's structure after successful firms
A-4: The more ambiguous the goals, the more an organization will mimic a successful one to establish legitimacy
A-5: The greater the reliance in using academic credentials to choose staff, the greater will be similiar to other organizations. Also the greater the participation of members in professional organizations, to more allike the ogranizations will be.
Field Level Predictors
B-1: The greater the extent the field is dependent upon a single source, the higher level of isomophism.
B-2: The more interaction of the field with the state, the more isomorphism.
B-3: The fewer the number of organizational models, the quicker the isomorphism
B-4: The more technological uncertainty or goal ambiguity, the greater the rate of isomorphism
B-5: More professionalism in the field, more isomorphism