Can institutional theory be refuted, replaced or modified?

Abstract

Purpose

This paper aims to demonstrating that the former new institutional theory of isomorphism and decoupling cannot be extended, modified or refuted as it is a closed theory. By analyzing the structure of this former version of institutional theory and its numerous modern competitors (institutional entrepreneurship, institutional work and institutional logics theories) it is argued that these alternative theories demonstrate even less explanatory and predictive power and do not refute or extend their predecessor. The rise of new organizational theories can have no other effect on classic institutional theory than to limit the domain of its applicability. In turn, there are a number of principles and conditions that future theories should meet to be accepted as progressive advancements.

Design/methodology/approach

The paper provides a review of relevant organizational and philosophical literature on theory construction and scientific progress in organizational research and offers a set of principles and demands for those new theories that seek to challenge new institutionalism.

Findings

The authors show that the former institutional theory satisfies two main criteria that any scientific theory should conform with following it is useful and falsifiable in term of giving explanations and predictions while, at the same time, clearly specifying what can be observed and what cannot; what can happen and what is not likely to occur. Modern institutional theories cannot demonstrate this quality and they do not satisfy these criteria. Moreover, institutional isomorphism theory is a closed theory, which means it cannot be intervened with changes and modifications and all future theories should develop their theoretical propositions for other domains of applications while they should account for all empirical phenomena that institutional theory successfully explains.

Originality/value

Adopting instrumental view on organizational theories allowed reconstructing the logic and trajectory of organizational research evolution and defends its rationality and progressive nature. It is also outlined how existing dominant theory should be treated and how new theories should challenge its limitations and blind spots and which philosophical and methodological criteria should be met.

Citation

Aksom, H., Zhylinska, O. and Gaidai, T. (2020), "Can institutional theory be refuted, replaced or modified?", International Journal of Organizational Analysis, Vol. 28 No. 1, pp. 135-159. https://doi.org/10.1108/IJOA-02-2019-1666