Sleight of Hand? Practice Opacity, Third-party Responses, and the Interorganizational Diffusion of Controversial Practices

Abstract

We examine the role of a practice’s opacity (versus transparency) in the interorganizational diffusion of organizational practices. Though the opacity of a practice is typically thought to impede diffusion, a political-cultural approach to institutions suggests that opacity can sometimes play a positive role. Given that adoption decisions are embedded in a web of conflicting interests, transparency may bring negative attention that, when observed by prospective adopters, inhibits them from following suit. Opacity, in contrast, helps avoid that cycle. Using the curtailment of health benefits for retirees among large U.S. employers (1989 to 2009), we compare the diffusion of transparent adoptions (i.e., partial or complete benefit cuts) with opaque adoptions (i.e., spending caps that trigger disenrollment). We find that transparent adoptions reduce subsequent diffusion of the practice to other organizations. This effect is fully mediated by negative media coverage, which is itself conditioned by the presence of opposition from interest groups. Opaque adoptions, in contrast, increase subsequent diffusion to other organizations and are facilitated by the involvement of professional experts. Thus, in addition to providing findings on practice opacity, our study contributes insight into how organizational fields shape diffusion by illuminating the role of third parties in the spread of controversial practices.

Opaque transparency: How material affordances shape intermediary work

“…Even after being upgraded to version 3.0, aggregated information remains difficult to obtain and challenging to manipulate and analyze. The public's experience of using the FracFocus website is thus marked by an overall sense of “opaque transparency.” As with Briscoe and Murphy's () research on the diffusion of opaque practices among publicly traded companies, the process we observed is facilitated by the involvement of third parties and “design features” of the disclosures. However, unlike the practices studied by Briscoe and Murphy, the fracking practices being disclosed are not opaque.…”

More than a Metaphor: Assessing the Historical Legacy of Resource Dependence and its Contemporary Promise as a Theory of Environmental Complexity

“…One obvious application is to integrate complexity into Oliver's (1991) theorization of organizational responses to institutional demands. For example, the use of symbolic approaches for managing conflicting demands has been largely subsumed by NIT scholars who have made notable contributions to this area with studies on de-coupling (Meyer & Rowan, 1977;Westphal & Zajac, 2001), framing (Weber, Heinze, & DeSoucey, 2008) and hiding controversial actions (Briscoe & Murphy, 2012). As such, responding to conflicting pressures is likely an ongoing process that plays out over time through multiple interactions among organizations (pp.…”

Field or Fields? Building the Scaffolding for Cumulation of Research on Institutional Fields

“…(Farjoun, 2002;Reay & Hinings, 2009). Some examine institutional processes among those who share some point of commonality even across sectors, such as geography (Glynn, 2008;Lounsbury, 2007;Marquis, Glynn & Davis, 2007), or identity characteristics, such as being major multinationals (Kostova, Roth, & Dacin, 2008), Fortune 500 members (Briscoe & Safford, 2008), or major U.S. employers (Briscoe & Murphy, 2012). These differences are likely to result in analysis showing different effects on field processes.…”