Institutionalized organizations: Formal structure as myth and ceremony
Meyer and Rowan's core argument is that organization form is driven by what they call "institutional myths." The authors suggest that organizations adopt forms because of myths in an environment, as opposed to because those forms are necessary connected to more effective organizational outcomes.
The paper's strawman is the idea of the rational organization. The authors argue instead, in favor of an idea of rationalized institutional elements.
They argue that organizations are driven to adopt practices or routines in order to achieve increased legitimacy and to increase their survival prospects and that their adoption of these practices are not immediately connected to any immediate or direct increase in efficiency.
The authors offer the following six formal propositions:
Proposition 1: "As rationalized institutional rules arise in given domains of work activity, formal organizations form and expand by incorporating these rules as structural elements."
Proposition 2: "The more modernized the society, the more extended the rationalized institutional structure in given domains and the greater the number of domains containing rationalized institutions."
Proposition 3: "Organizations that incorporate societally legitimated rationalized elements in their formal structures maximize their legitimacy and increase their resources and survival capabilities."
Proposition 4: "Because attempts to control and coordinate activities in institutionalized organizations lead to conflicts and loss of legitimacy, elements of structure are decoupled from activities and from each other." Integration is avoided, program implementation is neglected, and inspection and evaluation is ceremonialized."
Proposition 5: "The more an organization's structure is derived from institutionalized myths, the more it maintains elaborate displays of confidence, satisfaction, and good faith, internally and externally."
Proposition 6: "Institutionalized organizations seek to minimize inspection and evaluation by both internal managers and external constituents."
Theoretical and practical relevance:
Meyer and Rowan is frequently cited as the seminal, and one of the core, of the neo-institutionalist perspective in sociology.