Deinstitutionalization revisited

Abstract

Purpose The purpose of this paper is to offer a new analysis and understanding of the notion of deinstitutionalization. Deinstitutionalization of taken-for-granted practices as a natural consequence of ever-increasing entropy seems to directly contradict the major institutional thesis, namely, that over time isomorphic forces increase and, as a result, possibilities for deinstitutionalization decrease culminating in the impossibility of abandoning in highly institutionalized fields. Design/methodology/approach This paper is conceptual in nature. Oliver’s 1992 paper on deinstitutionalization is taken as a key text on the subject and as a starting point for building an alternative theory of deinstitutionalization. More broadly, institutional theory and organizational literature on diffusion/adoption are reviewed and synthesized. Findings The authors argue that possibilities for deinstitutionalization have been overestimated in institutional literature and offer a revisited account of deinstitutionalization vs institutional isomorphism and institutionalized vs highly diffusing-but-not-institutionalized practices. A freedom for choice between alternative practices exists during the pre-institutional stage but not when the field is already institutionalized. In contrast, institutionalized, taken-for-granted practices are immutable to any sort of functional and political pressures and they use to persist even when no technical value remains, thus deinstitutionalization on the basis of a functional dissatisfaction seems to be a paradox. Research limitations/implications By revisiting the nature and patterns of deinstitutionalization, the paper offers a better conceptual classification and understanding of how organizations adopt, maintain and abandon organizational ideas and practices. An important task of this paper is to reduce the scope of application of deinstitutionalization theory to make it more focused and self-consistent. There is, however, still not enough volume of studies on institutional factors of practices’ abandonment in institutional literature. The authors, therefore, acknowledge that more studies are needed to further improve both the former deinstitutionalization theory and the framework. Originality/value The authors offer a solution to this theoretical inconsistency by distinguishing between truly institutionalized practices and currently popular practices (highly diffused but non-institutionalized). It is only the latter that are subject to the norms of progress that allow abandoning and replacing existing organizational activities. Deinstitutionalization theory is, thus can be applied to popular practices that are subject to reevaluation, abandonment and replacement with new optimal practices while institutions are immutable to these norms of progress. Institutions are immutable to deinstitutionalization and the deinstitutionalization of optimal practices is subject to the logic of isomorphic convergence in organizational fields. Finally, the authors revisit a traditional two-stage institutional diffusion model to explain the possibility and likelihood of abandonment during different stages of institutionalization.