From Isomorphism to Institutional Work: The Advancement of Institutional Theory in Public Administration

Definition

Analysing the need for homogenisation of organisations and the incorporation of institutional theory in public administration is a relevant topic, given that it is a process that reflects the historical characteristics of an organisation built by the people who work there and the way in which it establishes relationships with its environment. The need to incorporate existing practices between organisations, which leads them to come closer together and converge, is a phenomenon known in the literature as isomorphism. This entry triggers a review of significant literature in the field, based on sound scientific principles, with the aim of contributing to the sharing of information for a better understanding of the structure and functioning of organisations against the backdrop of institutional isomorphism. In this way, it sought to convey the need to advance institutional theory in public administration based on isomorphism.

1. Introduction

The interaction between institutions and how this interaction can be studied and understood, dating back thousands of years, has emerged throughout history through various thinkers [1]. The complexity of today’s world is increasing, thus becoming a factor that generates organisations with characteristics that are distinct from those of the past. It is up to human beings to keep up with this complexity and analyse the phenomena that result from these organisations [2].

The constant evolution of society generates a permanent need for adaptation and evolution in the world in general, and in public administration in particular [2]. Despite the peculiarities and distinctive features surrounding the reforms that public administration has been undergoing, it is widely accepted that the Weberian model has lost momentum, giving way to new paradigms [3,4].

Arguing that institutional theory underpins research in various sciences due to its flexible nature and explanatory power [2], given the subject under study, it is important to note that institutions have always been a central focus for the social sciences [1].

Organisations were recognised as a social phenomenon as far back as the 1940s. In 1977, Meyer and Rowan published an article (Institutionalised Organisations: Formal Structure as Myth and Ceremony) that would come to be recognised as a milestone in the history of organisational analysis. The authors argued that institutional environments influenced the structures of many organisations [5].

The diversification and complexity of relations between the outside world and organisations is a result of the increased variability of the vectors that constitute them. The increase in constraints to which organisations are subject requires them to have an adequate and valid response capacity as a mechanism for adaptation and response. In this sense, the evolution of management/administration models are a reference for institutional theory when seeking to understand the social phenomena of organisations [6].

Given that organisational theory focuses on the relationship between the organisation and its environment as a factor that “adapts” its actions, it is important to understand how this environment determines the effectiveness, survival and need for evolution of the organisation [7]. An organisation that wants to remain “alive” in the labour market will inevitably have to face external and internal pressures (mostly external). In this sense, there is a need to legitimise itself so that its actions are “desired or appropriate within a socially constructed system of norms, values, beliefs and definitions” [8] (p. 574). However, for organisations to gain legitimacy within a context, they need to gain credibility and acceptance from their peers, which leads them to come closer together and converge. This process of approximation and convergence is known in the literature as isomorphism. This concept is defined as “the process that causes a unity of behaviour in various organisations operating in the same field and under the same environmental conditions” [7] (p. 95).

Thus, this entry article was created with the aim of sharing knowledge and enriching the topic under study. Regarding the adopted structure, this article addresses the literature on the concept of isomorphism, referencing the topic: from rationality and bureaucracy to isomorphism. It presents the contextualization of institutional theory, addresses the three major institutional currents and the new institutionalism, and finally, addresses the topic of the institutionalization of public administration. Conclusions, limitations, and proposals for future research are presented. Emphasising the aspects that isomorphism provides to organisations in the social environment in which they operate. In this way, the contributions of this research play a role in promoting and expanding scientific knowledge about isomorphism in public administration in general.

Despite the contributions of our article, limitations (gaps) were identified, namely the fact that although the contribution of academics offers important opportunities for knowledge exchange and multidisciplinarity in various areas of knowledge, it is important to mention that the variety of approaches and assumptions, which are sometimes ambiguous and self-contradictory, limits academic discourse and academic progress on this topic.

In conclusion, we note that, in light of the theoretical concepts discussed throughout this paper, there is a need to advance institutional theory in public administration based on isomorphism, with the aim of enabling, through the four points discussed above, the study, reinforcement and sharing of knowledge about the need for organisations to follow the most successful organisations (with highly professionalised resources) within the same sector as a ‘model,’ leading them to converge and become similar, a process known as isomorphism.

2. Isomorphism

Over time, the homogeneity of organisations in terms of processes and structure triggered one of the most relevant concepts in institutional theory: the concept of isomorphism [1]. Although an institution in its initial process tends to disperse in order to gain performance and be highlighted as progressive in a given process, in the diffusion phase, for reasons of legitimacy and consistency, the innovation applied by an institution tends to dissipate when adopted by other institutions, becoming a standard element. The initial differentiation, marked by a significant innovation in a given service or services, ultimately reflects a homogeneity of approaches and even services in organisational structures, where the diffusion process is at a later stage [9]. As well as capturing values in institutional research on corporate social responsibility [10]. In terms of institutional theory regarding social and environmental efforts, management focuses on how different normative, mimetic, and regulatory pressures shape organisations’ responses through the adoption of (symbolic) practices and leadership. In this way, the authors refer to conferring legitimacy on organisations and improving their performance [11].

DiMaggio and Powell [10,11] identified two types of isomorphism: competitive isomorphism, which arises from market forces, and institutional isomorphism, which, although also competitive in nature, arises from competition for political and organisational legitimacy. Furthermore, these authors identified its three main mechanisms of action. The first mechanism of institutional isomorphism is coercivity, which acts by exerting pressure to ensure that procedures and/or organisational structure comply with best practices, in order to meet the requirements of the agents on which the organisation depends in terms of resources. The second mechanism consists of mimetism. Mimetic institutional isomorphism aims to reduce uncertainty, given that in contexts of uncertainty, imitation of successful peers is seen as a safe strategy [12]. The third mechanism consists of norms. Normative institutional isomorphism aims to create pressures that arise from professionalisation, which promotes socialisation within the organisation, leading individuals to consider certain types of structures and processes as legitimate.

Organisations use the three mechanisms of isomorphism according to an order that they themselves establish, with the aim of regulating their structure and behaviour in order to obtain legitimacy [13].

From Institutional Rationality and Bureaucracy to Isomorphism

As a result of institutionalised society, organisations are induced to adopt and implement practices and procedures defined by the prevailing concepts in work logic [1]. The assumption that organisations adopting this mode tend to increase their legitimacy and prospects for survival, regardless of the effectiveness, efficiency and quality of the practices and knowledge acquired, forms the basis of isomorphism [5].

Max Weber, in his book entitled “The Protestant Ethic and the Spirit of Capitalism” stated that the rationalist spirit introduced by asceticism had reached its “momentum” and that, through capitalism, rationalism had become an iron cage in which humanity would remain, except for the possibility of a prophetic rebirth: “Until the last tonne of fossilised coal had been burned” [14] (p. 181). Max Weber, in his essay on bureaucracy, revisited the theme of rationalism by mentioning that bureaucracy, defined as the organisational manifestation of the rational spirit, established a way of controlling men and women and that, once established, its “momentum” would be irreversible [15].

In this sense, as bureaucracy accelerated, the image of the iron cage began to alert scholars. However, while bureaucracy spread over 80 years, the causes of organisational rationalisation and bureaucratisation changed, leading to the bureaucratisation of organisations and the state.

Weber cited three causes of bureaucratisation: competition between capitalist companies, competition between states, increasing the need for rulers to control their teams and citizens, and bourgeois revolutions for equal protection under the law [15].

Organisations are becoming increasingly homogeneous, and bureaucracy maintains the common organisational configuration. However, structural changes in organisations are now less and less driven by competition or the need for efficiency [16]. These authors noted that bureaucratisation, like other forms of organisational change, resulted from processes that made organisations more similar. Bureaucratisation and other forms of homogenisation arise from organisational structure [17]. This process was affected by the state and by the professional categories that became the rationalisers of the second half of the XX century. In highly structured organisations, individual efforts to deal rationally with uncertainty and constraints, taken together, generally lead to homogeneity in terms of structure, culture and results [16].

3. Contextualisation of Institutional Theory

The essence of institutional theory is to seek to explain the “development of rules and requirements that organisations must comply with in order to receive support and legitimacy” [18] (p. 140). In other words, institutional theory seeks to explain isomorphism in organisational practices and forms, as well as its causes [19]. A fundamental principle of institutional theory is that isomorphism increases organisational legitimacy, i.e., when an organisation conforms to widely accepted practices, it receives acceptance and support from its peers. As legitimacy is essential for competition, organisations adopt the practices considered most legitimate, eventually leading to similarities in the way they operate [19].

This perspective may result from the whole set of rules and requirements that have been observed in all sectors and industries [20]. As well as capturing values in institutional research on corporate social responsibility [21]. In terms of institutional theory regarding social and environmental efforts, management focuses on how different normative, mimetic, and regulatory pressures shape organisations’ responses through the adoption of (symbolic) practices and leadership. In this way, the authors refer to conferring legitimacy on organisations and improving their performance [22].

Before the XIX century, several scholars had already reflected and written about institutions; however, a theory worthy of the name had not yet been developed. It was only at the end of the XIX century and the beginning of the XX century that the systematisation of the study of institutions began. Most initial approaches focused mainly on the formality of these bodies. These approaches focused essentially on the laws that constituted the origin and basis of the institutions and on their interpretation, from a perspective strongly linked to hermeneutics. This way of conceiving institutions is referred to as institutionalism, or “old” institutionalism, as opposed to neo-institutionalism [1]. Neo-institutionalism provides an effective framework for conducting research on organisational change in public organisations and for public administration practice for several reasons. In order to define neo-institutionalism and the areas to which it applies, in sociology, neo-institutionalism suggests that organisations are centred on the meaning of systems and the way in which social actions construct and reformulate these same organisations [1]. Neo-institutionalism provides an effective framework for conducting research on organisational change in public organisations and for the practice of public administration [23].

As a systemic approach, it considers behaviour to be an indirect effect of the characteristics of social systems. Given its institutionalisation, social knowledge is an objective part of reality and can be transmitted directly [24].

Beyond the field of sociology, it is important to note that in the field of economics, Douglas North stands out in the literature due to the fact that he received the Nobel Prize in 1993 for his outstanding work on neo-institutionalism, developed at Washington University in Saint Louis, Missouri.

The first scholar referred to by institutionalists was Weber, who defined institutions as “involuntary associations”, thus emphasising an element of control in institutionalised life [15] (p. 52).

Max Weber, as an economist and social theorist, focused his work on how institutions and bureaucracy exercised a strong and growing dominance in society, using the metaphor of the iron cage to describe the result of the rapid increase in institutionalisation. Weber advocated the professionalisation of bureaucracy as a means of achieving the modernisation of the state, emphasising the particularly normative and prescriptive nature of these early works [1]

With regard to establishing organisations as a field of study in their own right, Robert Merton conducted empirical studies, including one entitled Bureaucratic Structure and Personality, in which he discusses the internal processes of organisations that ultimately guide the actions of their employees. Through this work, Merton recognises that internal processes can reach a point where concern for observing rules interferes with the achievement of organisational objectives [25,26].

However, his studies are complemented by the work of Philip Selznick (Selznick, 1949), who is influenced by Merton, particularly by his work entitled Unanticipated Consequences of Purposive Action [27]. This influence would later be reflected in what would become known as Selznick’s institutional model. His initial formulations suggest that, over time, organisations transform themselves or are transformed into institutions [1].

In 1957, Selznick, in his work Leadership in Administration, mentions the difference between organisation and institution. The author refers to organisations as a “technical instrument for mobilising human energies towards an already established goal” [28] (p. 5). With regard to institutions, the author defines them as “the natural product of social pressures and needs an adaptable and receptive organism” [28] (p. 5). The term ‘institution’ is defined as ‘the rules of the game’ in society [29] (p. 3). An institution can be defined as an operational set of rules for determining who is eligible to make decisions in a given scenario, what actions are permitted or constrained, what aggregation rules are used, what procedures must be followed, what information must or must not be provided, and what rewards will be given to individuals based on their actions [30].

An institution can also be viewed as a social pattern characterised by a sequence of standard interactions [31]. Institutions are fundamental to building elements to face competition. Actors, their relationships, scarcity, and desire are strongly shaped, if not created, by institutions [32].

There is no unanimous consensus on the definition of institution. Scholars of economics, political science, and sociology use various definitions for the term institution [33]. In this entry, in order to standardise the concept of institution, Greif [33] definition was taken as a premise, stating that an institution is a system of social factors (rules, beliefs, norms and organisations) that together generate regular behaviour. Greif [33] states that each component of this system is social, given that it is a non-physical factor, created by man, and exogenous to each individual whose behaviour it influences. Taken together, these components motivate, empower, and guide individuals to follow certain behaviours, among others that are technologically feasible in social situations, considering social factors as institutional elements.

In this regard, according to Balcerowicz [34], it is important to note that the effects of the institutional system on individual decisions can be categorised into three types: A situation that arises from differences between institutional systems with regard to the types of positions that a given individual is allowed to occupy, i.e., the category.; selective: resulting in differences between institutional systems in terms of the degree to which individuals with certain dispositions are able to attain positions of decision-making., and formative: related to specific dispositions (beliefs, attitudes, and skills) generated under the influence of institutional systems in a given society over a period of time.

In order to facilitate understanding of the definition of institution, Greif [33] gives the following example: “Consider a system of rules, beliefs and organisations that guarantees property rights, that is, that induces behaviour that respects specific rights. In this system, politically determined rules define relevant properties, assign property rights, identify owners, define infringements, and specify corresponding (legal) penalties” [33].

In view of the above, in order to address the issue of institutionalisation, the following points refer to the three major institutional trends and the new institutionalism, as well as emphasising the importance of institutionalising public administration.

Given the subject matter addressed in this entry, considering the institution in the context of public administration, we argue that, given the context in which it operates, the institution focuses on implementing a set of norms, rules and organisations that regulate the functioning of the state with the aim of serving society.

Thus, Correia [1] states that institutionalisation is a process; it is something that occurs in an organisation over time and reflects the history of the organisation itself, the people who comprise it, the groups that these people have formed, the interests generated by these groups, and the way in which the organisation itself has adapted to its environment. On the other hand, institutionalisation can mean inspiring values beyond the technical requirements of the tasks at hand, whereby institutions can be means of incorporating values [35]. Therefore, institutional theory provides an ideal framework for understanding how social entrepreneurs or social enterprises are embedded in the institutional environment and influenced by institutions, as well as by multiple institutional logics [36].

4. The Three Major Institutional Currents and the New Institutionalism

New institutionalism does not constitute a unified body of thought [37]. Therefore, this section addresses the three institutionalist schools of thought: historical institutionalism, rational choice theory, and sociological institutionalism, which together have come to be known as New Institutionalism.

Firstly, it is important to mention the difference between “old” institutionalism and “new” institutionalism. According to Correia [1], while “old” institutionalism seeks to articulate reasons for institutional change in terms of political and social will, “new” institutionalism or neo-institutionalism seeks to explain institutional change as yet another example of maximisation.

Considering this new strand of research on institutionalism, which ultimately gave rise to the new concept of neo-institutionalism or “new” institutionalism, it is important to note that this new concept originated in the works Social Origins of Dictatorship and Democracy [38], Political Order in Changing Societies [39] and, in particular, States and Social Revolutions: A Comparative Analysis of France, Russia & China [40]

As mentioned previously, new institutionalism does not present a unified definition, which can be seen in the approaches of some researchers in this new field. For example, March and Olsen [41] refer to the institutional approach as being that of rational actors and the cultural community, in this perspective the new institutionalism incorporates traditionally non-institutionalist analytical styles into the old institutionalism; Hall and Taylor [42] refer to the historical approach, the rational choice approach and the sociological approach; Immergut [43] refers to the historical approach, that of rational choice and that of organizational theory; and Correia [1] refers to the historical approach, the rational choice approach and the sociological approach, but defines sociological institutionalism as normative institutionalism.

However, regardless of the approaches used, new institutionalism is designated by three perspectives: historical institutionalism, rational choice theory, and sociological institutionalism.

At the level of social sciences, the first institutionalist current consists of the expected utility of economic theory or rational choice theory [44]. In this current, institutions are identified as a set of rules that generate behavioral exchanges between individuals and services, with the actions taken being based on their own interests [1]. This current is based on three contexts: public choice theory, which defines decision-makers as rational and optimizing, focused on their own interests; social choice theory, which considers voters as rational; principal-agent theory, which considers contractualization and incentives involving hierarchical superiors and their subordinates; and market theory, which defines individuals as agents of optimization in markets [42].

The second institutionalist current consists of historical institutionalism, which refers to the weight of the historical trajectory, or the path taken by the institution, which in turn generates constraints on decision-making by institutions. This current defines institutions through formal and informal procedures, routines, norms and conventions incorporated into the organizational structure of politically and economically organized society [42]. Historical institutionalism highlights the unforeseen consequences and inefficiencies generated by institutions, to the detriment of the institution’s image as having a defined purpose and efficient functioning [41]. Historical institutionalism is based on the following assumptions: specific patterns of time and sequence are important in explaining social phenomena; a wide range of social outcomes; events that may have far-reaching consequences; specific courses of action, once introduced, may be impossible to reverse; political development is accentuated by moments that shape the basic contours of social life [45].

Finally, the third institutionalist current consists of normative or sociological institutionalism. Sociological institutionalism highlights that norms and rules result from processes related to the current culture. This current refers to institutions in a broader way than traditional views, not only focusing on formal rules, procedures and norms, but also on cognitive scripts and moral standards, providing a set of meanings that guide human action. These current approaches the concept of institution and culture. The sociological current refers to a cognitive dimension that aims to understand the institutional impact on individual behavior [42].

5. Institutionalisation of Public Administration

Institutional theory is a relatively new field of study in public administration, but it has already been studied in numerous investigations in the fields of economics, sociology, and politics [45]. The essence of institutional theory is centred on institutionalism, given that it seeks a motivational explanation for organisations to integrate practices and procedures into their routines [46].

Taking the literature on institutional theory in public administration as a reference, efficiency was the goal and the means of achieving better public administration [47]. The need to improve production processes in public administration has led to changes in the way bureaucracies are managed, as these have been identified as problematic due to their centralised nature, leading to the accumulation and overload of functions, to the extent that tasks are not carried out due to the numerous stages in the administrative process [48]. At the beginning of the XX century, with the aim of decentralising administrative bureaucracy, attempts were made to implement universal management principles. However, due to the embryonic state of public administration, these administrative principles resulted in errors and inefficiency [45]. Reducing mechanisms for transparency and objectivity in management, ultimately creating more favourable conditions for groups considered privileged, strengthening their interests to the detriment of the most needy population [49].

According to Borges & Borges [45], the opposition between public policies implemented, the interests of organised civil society and public administration structures, there was a need to create a management model based on the ability to deal with the shortage of workers and resources, as well as the demand for the public sector to meet the needs of citizens, thereby abolishing favouritism and privilege for certain social groups and improving the quality of public services for the general public. Through the flexibilisation of administrative actions in the final decades of the XX century, New Public Management was implemented with the aim of making public administration function like a private company, promoting greater efficiency, cost reduction, and productive capacity in service provision, with a focus on the customer, as they are the main users of public services.

The New Public Management doctrine has triggered changes in the functioning of public services, with the aim of increasing performance levels and demonstrating greater transparency and accountability in public administration. This change was based on the adoption of private sector practices in the public sector, through the agency model, as a strategy for organisational change. This change gave rise to institutional isomorphism, which altered a set of public sector practices, namely: (1) the hierarchy changed to structures based on economics, (2) regulated processes changed to processes based on economics, and (3) the cultural values of public administration based on legality changed to values based on economics. However, the adoption of private sector practices in the public sector has proved inadequate, with the argument that the New Public Management doctrine is not compatible with the traditional model of public service [50].

The implementation of the new public management system did not show any improvements in terms of flexibility, given that it did not eliminate existential control, and there was also an increase in bureaucracy. This resulted in the creation of more bureaucratic rules and more hierarchical levels to control the supposed decentralisation.

In order to implement corrective measures, four key areas emerged on the part of the American government: information, personnel, finance, and infrastructure, with the purpose of improving administration and measuring the performance of state management. Through these areas, it was found in the 1980s and 1990s that attempts to change the public sector for the better were directed towards New Public Governance, generally in Anglo-Saxon countries through public management alternatives in the search for better adaptation and transfer of managerial knowledge produced in the private sector to citizens [45].

Other measures were implemented, such as the implementation of various movements in the early 1980s through the renewal movement, which originated in the Anglo-Saxon paradigm and led to the introduction of reforms based on private management, such as decentralisation, outsourcing and flexibilisation. The implementation of the new public management movement has gone “viral” worldwide, albeit with associated risks, such as the transfer of the role of the state to the private sector, rendering the state empty and hollow [51].

In the early 1990s, another movement emerged with the same origins as new public management, reinventing government, with the aim of bringing about change. Proponents of this movement now identify users as customers, promoting market competition, with the idea that monopoly is always bad [3,52].

Although these movements had some shortcomings, they gave rise to new forms of organization [51].

6. Conclusions, Limitations and Proposal for Future Study

This entry is theoretical in nature, focusing on reconstructing theory, definitions, ideas and ideologies. The choice of this methodology was based on the perspective that a theoretical study aims to refine theoretical foundations, generating conceptual rigour, precise analysis, logical performance, diverse argumentation, and explanatory capacity [53].

Addressing the need to advance institutional theory in public administration based on isomorphism has allowed us, through the four points discussed above, to study, reinforce, and share knowledge about the need for organisations to follow the most successful organisations (with highly professionalised resources) as a ‘model’ within the same sector, leading them to converge and become similar, a process known as isomorphism.

The scientific perspective of public administration has evolved considerably since its inception to the present day. As a result of the constant evolution of society, there is a need for adaptation and evolution on the part of the State and, consequently, the exercise of public administration. However, although there is still no consensus on the reforms that public administration has been undergoing, the Weberian model has lost ground and new paradigms have been established [3,4].

New movements were implemented with the aim of applying corrective measures to improve the performance of the public sector. Although these movements demonstrated some shortcomings, they resulted in new forms of organization [51].

6.1. Limitations

Currently, institutional theory, being a cross-cutting area of social sciences and useful in the analysis of diverse fields, such as small interpersonal interactions or global frameworks of large organisations, has been arousing interest among academics. Although the contribution of academics offers important opportunities for knowledge exchange and multidisciplinarity in various areas of knowledge, it is important to note that the variety of approaches and assumptions, which are sometimes ambiguous and self-contradictory, limits academic discourse and academic progress on this topic.

6.2. Proposed Study Future

As a proposal for future study, based on the theory presented, we suggest empirical research with the aim of analysing the relationship between private sector organisations and public sector organisations and between organisations, in order to understand how they function, the factors that comprise them and the practices used.