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Article
Publication date: 29 June 2020

Herman Aksom and Inna Tymchenko

This essay raises a concern about the trajectory that new institutionalism has been following during the last decades, namely an emphasis on heterogeneity, change and agentic…

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Abstract

Purpose

This essay raises a concern about the trajectory that new institutionalism has been following during the last decades, namely an emphasis on heterogeneity, change and agentic behavior instead of isomorphism and conformist behavior. This is a crucial issue from the perspective of the philosophy and methodology of science since a theory that admits both change and stability as a norm has less scientific weight then a theory that predicts a prevalence of passivity and isomorphism over change and strategic behavior. The former provides explanations and predictions while the latter does not.

Design/methodology/approach

The paper offers an analysis of the nature, characteristics, functions and boundaries of institutional theories in the spirit of philosophy and methodology of science literature.

Findings

The power of the former institutional theory developed by Meyer, Rowan, DiMaggio and Powell lies in its generalization, explanation and prediction of observable and unobservable phenomena: as a typical organizational theory that puts forward directional predictions, it explains and predicts the tendency for organizations to become more similar to each other over time and express less strategic and interest-driven behavior, conforming to ever-increasing institutional pressures. A theory of isomorphism makes scientific predictions while its modern advancements do not. Drawing on Popper's idea of the limit of domains of explanation and limited domains of theories we present two propositions that may direct our attention towards the strength or weakness of institutional theories with regard to their explanations of organizational processes and behavior.

Practical implications

The paper draws implications for further theory building in institutional analysis by suggesting the nature of institutional explanations and the place of institutional change in the theoretical apparatus. Once institutional theory explains the tendency of the system towards equilibrium, there is no need to explain the origins and causes of radical change per se. Institutional isomorphism theory explains and predicts how even after radical changes organizational fields will move towards isomorphism, that is, institutional equilibrium. The task is, therefore, not to explain agency and change but to show that it is natural and inevitable processes that organizational field will return to isomorphic dynamics and move towards homogenization no matter how much radical change occurred in this field.

Originality/value

The paper discusses the practical problems with instrumental utility of institutional theories. In order to be useful any theory must clearly delineate its boundaries and offer explanations and predictions and it is only the former 1977/1983 institutional theory that satisfies these requirements while modern advancements merely offer ambiguous theoretical umbrellas that escape empirical tests. For researchers therefore it is important to recognize which theory can be applied in a given limited domain of research and which one has little or no value.

Details

Journal of Organizational Change Management, vol. 33 no. 7
Type: Research Article
ISSN: 0953-4814

Keywords

Article
Publication date: 11 October 2021

Mahade Hasan and Shah Md Taha Islam

The purpose of this study is to examine the role played by coercive, normative and mimetic pressures in stimulating timeliness of corporate internet reporting (TCIR).

Abstract

Purpose

The purpose of this study is to examine the role played by coercive, normative and mimetic pressures in stimulating timeliness of corporate internet reporting (TCIR).

Design/methodology/approach

This study uses content analysis technique to track the TCIR practices of top 100 non-financial companies listed on the Dhaka Stock Exchange. A disclosure index of 14 items is developed to capture the extent of TCIR. The authors collected the relevant data from multiple sources, such as corporate websites, monthly review reports and corporate annual reports for the year-end 2019. This study uses Poisson regression models to explore the association between institutional pressures and TCIR.

Findings

Consistent with the predictions of institutional isomorphism theory, the authors find that coercive isomorphic pressures through ownership by foreign investors, government, general public and connection with parent multinational corporations have positive associations with TCIR. The authors also find that normative pressures resulting from cross-directorships have positive influence on TCIR. The authors provide evidence of mimetic pressures through industry memberships (i.e. companies operating in technology-based industry) positively impacting TCIR. The additional analysis suggests that institutional pressures are rather associated with the extent of voluntary TICR and to a lesser extent to regulatory TICR.

Originality/value

To the best of the authors’ knowledge, this study is the first to show the positive impacts of coercive, normative and mimetic isomorphic pressures on TCIR in an emerging economy characterized by weak institutional environment and mixed prospects for TCIR.

Details

Journal of Financial Reporting and Accounting, vol. 21 no. 2
Type: Research Article
ISSN: 1985-2517

Keywords

Article
Publication date: 24 September 2018

Dewi Fitriasari and Naoko Kawahara

The purpose of this study is to detect focal issues in sustainability reports in two different Asian countries based on the operating sustainability reporting law and regulations…

Abstract

Purpose

The purpose of this study is to detect focal issues in sustainability reports in two different Asian countries based on the operating sustainability reporting law and regulations and to explore possible changes in laws and regulations because of investment interactions between the two countries.

Design/methodology/approach

This paper provides a descriptive literature review on laws and regulations related to sustainability reporting in Japan and Indonesia followed by an interpretive approach in the analysis.

Findings

Laws and regulations in Japan can lead to focus on the environmental aspect of sustainability. Laws and regulations in Indonesia can lead to variations in all aspects of sustainability reporting. All types of institutional isomorphism are possible investment system pressures.

Practical implications

This paper redefines issues in sustainability reporting based on the reporting environment created by laws and regulations in Japan and Indonesia.

Originality/value

This study assists researchers and investment analysts in understanding inherent reporting issues because of laws and regulations in both countries, and it expands existing theory for voluntary and mandatory reporting interaction studies.

Details

Social Responsibility Journal, vol. 14 no. 4
Type: Research Article
ISSN: 1747-1117

Keywords

Article
Publication date: 18 June 2010

Nicola Misani

The purpose of this paper is to explain why many socially responsible firms appear to converge on a standard set of corporate social responsibility (CSR) practices instead of…

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Abstract

Purpose

The purpose of this paper is to explain why many socially responsible firms appear to converge on a standard set of corporate social responsibility (CSR) practices instead of striving to differentiate themselves from rivals and achieve competitive advantage.

Design/methodology/approach

Three explanations of this convergence are presented as follows: herd behaviour, institutional isomorphism and strategic cooperation. The different empirical predictions of these theories are laid down. The resulting framework is used to analyse a recent self‐regulatory scheme launched by the steel industry, in which knowledge sharing was used to stimulate poor performers to curb carbon dioxide emissions.

Findings

Social practices of firms are very often driven by pressures to conform, instead of pressures to perform. Even firms that want to be innovative may be forced by stakeholder requests to adopt passive and imitative behaviour.

Practical implications

The paper suggests that there are two types of CSR – convergent and divergent – and that firms need to establish which type of CSR best fits their needs before they address the issues raised by stakeholders.

Originality/value

The literature on CSR focuses on the relationship between stakeholders and single firms. The paper tries to add to this literature by analysing the relationship between stakeholders and industries. The paper also contributes to the debate on the financial benefits of CSR by arguing that in industries where the convergent type of CSR is dominant researchers should not expect above‐average returns for socially responsible firms.

Details

Management Research Review, vol. 33 no. 7
Type: Research Article
ISSN: 2040-8269

Keywords

Article
Publication date: 19 September 2019

Herman Aksom, Oksana Zhylinska and Tetiana Gaidai

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…

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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.

Details

International Journal of Organizational Analysis, vol. 28 no. 1
Type: Research Article
ISSN: 1934-8835

Keywords

Article
Publication date: 19 March 2021

George Frederick Nel and Pieter Van Aardt Van der Spuy

The study explores the use of professional investor relations (IR) practices in South African (SA) listed companies to understand which theories may be responsible for IR's…

Abstract

Purpose

The study explores the use of professional investor relations (IR) practices in South African (SA) listed companies to understand which theories may be responsible for IR's adoption and growth in South Africa, an emerging economy. Therefore, this study evaluates shareholder value maximisation, stakeholder and legitimization theory and institutional isomorphism theory as possible theories to explain professional IR behaviour in SA listed companies.

Design/methodology/approach

The study design is qualitative and exploratory, based on a questionnaire developed and sent to all companies listed on the Johannesburg Securities Exchange (JSE).

Findings

The results indicate evidence of isomorphic spread to SA environments from practices observed in the UK and the USA, which we find are mostly performed to promote shareholder interests. The data suggest some evidence that the communication needs of black economic empowerment and environmental, social and governance (ESG) investors are given priority, suggesting the utility of professional IR to obtain legitimisation from society. Contrary to expectation is that social media communication channels are not extensively used.

Practical implications

The descriptive nature of this study may be valuable to IR practitioners to improve SA IR practises, while neglected legitimisation opportunities with regard to the needs of ESG and black economic empowerment shareholders may be fruitfully addressed by practitioners.

Originality/value

This study innovates in its use of legitimisation theory and isomorphism theory to develop the study's expectations. Social problems provide contextual elements unique to SA which provides a good opportunity to test the expectation of legitimisation theory's influence on professional IR practices.

Details

Journal of Accounting in Emerging Economies, vol. 11 no. 3
Type: Research Article
ISSN: 2042-1168

Keywords

Article
Publication date: 4 April 2017

Padmi Nagirikandalage and Ben Binsardi

The purpose of this paper is to critically explore the implementation of cost accounting systems (CAS) using content analysis. In particular, it aims to examine the impact of Sri…

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Abstract

Purpose

The purpose of this paper is to critically explore the implementation of cost accounting systems (CAS) using content analysis. In particular, it aims to examine the impact of Sri Lankan cultural and local characteristics on the adoption of CAS. In particular, it examines the factors that facilitate or hinder the adoption of CAS in Sri Lanka.

Design/methodology/approach

Primary data for the research were obtained by interviewing selected respondents from Sri Lanka’s manufacturing and service sectors. They were shortlisted using maximum variation sampling to obtain a representative cross-section of the national population. A total of 16 respondents were interviewed, which resulted in 57 interview paragraphs to be coded. Several theories were used to analyse them, namely, the theory of institutional isomorphism (homogeneity) and the theory of heterogeneity, as well as Clifford Geertz’s cultural theories.

Findings

A cross-comparison between the findings and relevant literature indicates the existence of complete institutional isomorphism and partial institutional heterogeneity in Sri Lanka. Heterogeneity exists in organisations such as foreign multinationals, which have adopted unique and sophisticated CAS. In addition, inadequate access to information and the orientation of the local culture has affected the implementation of CAS in Sri Lanka, with a lack of awareness of the importance of CAS, a sluggish approach to costing and cultural values forming prominent barriers to its implementation. These findings are plausible in light of the relationship between a sluggish approach towards costing (a low cost awareness), and local attitudes towards the implementation of more efficient accounting practices such as CAS.

Practical implications

This research is invaluable as a tool for Sri Lankan policymakers and practitioners, enabling the public and private sectors to provide education and training to enhance staff understanding and promote a positive attitude towards costing. With more efficient institutional CAS, the country’s economy will be more competitive internationally. As well as policymakers and practitioners, this research could be used by academicians for advancing theoretical development around the cultural triggers and barriers for adopting more innovative and fresher CAS in Sri Lanka.

Originality/value

The originality of this research can be justified on two counts. Firstly, although a wealth of research exists that examines the influence of culture on behaviour, this research specifically evaluates the impact of cultural factors on attitudes towards costing. These factors could be facilitators or obstructions for implementing CAS. Secondly, this research aims to combine both earlier and recent theories of institutionalism with Clifford Geertz’s cultural theory, to investigate how people and institutions in Sri Lanka adopt CAS. Earlier studies have focused merely on earlier theories of institutional homogeneity.

Details

Managerial Auditing Journal, vol. 32 no. 4/5
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 10 November 2021

Herman Aksom

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…

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.

Details

International Journal of Organizational Analysis, vol. 31 no. 5
Type: Research Article
ISSN: 1934-8835

Keywords

Book part
Publication date: 15 October 2015

Padmi Nagirikandalage and Ben Binsardi

The purpose of this paper is to explore the challenges and influential factors experienced in the development of public sector accounting reforms in the emerging economy of Sri…

Abstract

Purpose

The purpose of this paper is to explore the challenges and influential factors experienced in the development of public sector accounting reforms in the emerging economy of Sri Lanka. The reforms aim to improve public governance and transparency while reducing corruption and dishonesty.

Methodology/approach

Qualitative (thematic) analysis has been employed by using both primary and secondary data. Primary data was obtained by interviewing selected respondents from public sector organisations in Sri Lanka. The respondents were selected by using an expert purposive sampling technique. Apart from the primary data, secondary data such as government reports, relevant literature and paper articles was also analysed in order to produce more robust findings.

Findings

The findings indicate that technological and cultural factors have influenced accounting reforms in the public sector in Sri Lanka. In addition, the politicisation and bureaucracy of the public sector as well as sluggish attitudes towards costs have served as prominent barriers to efficient implementation of the reforms.

Research limitations

This study was limited in terms of generalisation because of relatively small sample sizes. A larger sample with more diversity could have enhanced the generalisation of the results which could serve as direction for further research.

Originality/value

This paper is intended to fill a gap in the existing literature on public sector accounting reforms in the context of less developed or emerging countries. It is hopefully valuable for both policy makers and practitioners by allowing them to view the development, challenges and influential aspects of the implementation of New Public Management (NPM) in Sri Lanka in order that they will be able to make informed decisions about adopting more efficient NPM practices to enhance the country’s competitive advantages.

Details

The Public Sector Accounting, Accountability and Auditing in Emerging Economies
Type: Book
ISBN: 978-1-78441-662-1

Keywords

Article
Publication date: 10 January 2022

Herman Aksom

Institutional theory had been developed for the purpose of explaining widespread diffusion, mimetic adoption and institutionalization of organizational practices. However, further…

Abstract

Purpose

Institutional theory had been developed for the purpose of explaining widespread diffusion, mimetic adoption and institutionalization of organizational practices. However, further extensions of institutional theory are needed to explain a range of different institutional trajectories and organizational responses since institutionalized standards constitute a minority of all diffusing practices. The study presents a theoretical framework which offers guidelines for explaining and predicting various adoption, variation and post-adoption scenarios.

Design/methodology/approach

The paper is primarily conceptual in nature, and the arguments are developed based on previous institutional theory and organizational change literature.

Findings

The notion of institutional inertia is proposed in order to provide a more detailed explanation of when and why organizations ignore, adopt, modify, maintain and abandon practices and the way intra-organizational institutional pressures shape, direct and constrain these processes. It is specified whether institutional inertia will be temporarily eclipsed or whether it will actively manifest itself during adoption, adaptation and maintaining attempts. The study distinguishes between four institutional profiles of organizational practices – institutionalized, institutionally friendly, neutral and contested practices – which can vary along three dimensions: accuracy, extensiveness and meaning. The variation and post-adoption outcomes for each of them can be completely characterized and predicted by only three parameters: the rate of institutional inertia, institutional profile of these practices and whether they are interpretatively flexible. In turn, an extent of intraorganizational institutional resistance to new practices is determined by their institutional profile and flexibility.

Practical implications

It is expected that proposed theoretical explanations in this paper can offer insights into these empirical puzzles and supply a broader view of organizational and management changes. The study’s theoretical propositions help to understand what happens to organizational practices after they are handled by organizations, thus moving beyond the adoption/rejection dichotomy.

Originality/value

The paper explores and clarifies the nature of institutional inertia and offers an explanation of its manifestation in organizations over time and how it shapes organizational practices in the short and long run. It challenges a popular assumption in organizational literature that fast and revolutionary transition is a prerequisite for successful change. More broadly, the typology offered in this paper helps to explain whether and how organizations can successfully handle and complete their change and how far they can depart from institutional norms.

Details

Journal of Organizational Change Management, vol. 35 no. 3
Type: Research Article
ISSN: 0953-4814

Keywords

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