Agency, Entrepreneurs, and Institutional Change. The Role of Strategic Choice and Institutionalized Practices in Organizations

Abstract

One of the persistent problems facing institutional organization theory has been the question of how to deal with interest-driven behaviour and institutional change. If organizational structures and strategies are shaped by institutional environments, what is the role of `strategic choice' in the management of organizations? In this paper, my aim is to develop an integrative concept which theorizes the connection of strategic agency and institutions in a model of institutional change. I argue that, under market conditions, institutional rules and intentional rational agency can be conceptualized as antagonistic mechanisms that contradict each other, but, nevertheless, remain interdependent. The incorporation of a systematic place for interests does not weaken the main theoretical trait of institutional theory, but, on the contrary, demonstrates the importance of institutional rules for understanding institutional change in a comprehensive model. The notion of uncertainty is at the centre of this model. By referring to existing empirical findings of processes of institutional change, four propositions are developed and supported.