Institutional inertia and practice variation

Abstract

PurposeInstitutional 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/approachThe paper is primarily conceptual in nature, and the arguments are developed based on previous institutional theory and organizational change literature.FindingsThe 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 implicationsIt 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/valueThe 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.

Selecting senior leaders in the public sector: Challenges and best practices.

“…Public sector organizations tend to suffer from institutional inertia, which describes the propensity for an organization to remain on the existing course of action while actively resisting change (Aksom, 2022; Munck af Rosenschöld et al, 2014). In part, this is resultant of public organizations providing a specific, ongoing service, wherein new personnel assume the same roles as their predecessors.…”

The landscape of post-institutional practice variation theories: from traveling ideas to institutional inertia

“…How organizations handle, adopt and adapt global ideas and practices is the question that lies beyond the boundaries of classical institutional theory. We, therefore, can define practice variation research as the branch of organization theory, for which classical institutional theory and diffusion of innovation theory are inapplicable to the creation of adequate explanations and theoretical frameworks and we have to look for more nuanced and extended theories (Røvik, 2011; Wæraas and Nielsen, 2016; Aksom, 2022).…”

“…MF theory extends institutional theory in two important ways. First, institutional theory is used to overestimate the number of truly institutionalized practices: most are fads and fashions that suddenly become popular but decline and leave a space for new fashions (Abrahamson and Fairchild, 1999; Aksom, 2021a, 2021b). Transitory nature of most ideas and practices contradicts with an institutional argument since institutional theory maintains that institutionalization is a final state (Aksom, 2020, 2021a, 2021b).…”

“…Aksom’s (2021a, 2021b, 2022) theory of institutional inertia attempts to redirect researchers’ attention toward constraining effects of institutions and argues that institutional inertia has a defining role in shaping the process and outcomes of practice adoption and variation. This theory is called to help analyze a tension between an attempt to introduce radical change and inertial forces exerted by existing organizational routines.…”

“…A deeper understanding of these consequences requires the concept of inertia and internal institutional resistance instead of explaining any change by referring to empowered and creative agents of change. Specifically, this theory is needed “to provide a more detailed explanation of when and why organizations ignore, adopt, modify, maintain and abandon practices and the way intraorganizational institutional pressures shape, direct and constrain these processes” (Aksom, 2021a, p. 1). The focus on constraints may be of more help in predicting organizational change than the study of active agency.…”