The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields

Citation: Paul J. DiMaggio, Walter W. Powell (1983) The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review (RSS)
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Download: https://www.ics.uci.edu/~corps/phaseii/DiMaggioPowell-IronCageRevisited-ASR.pdf
Tagged: Sociology (RSS) organization theory (RSS), neo-institutionalism (RSS), institutionalism (RSS)

Summary

The Protestant work ethic and the spirit of capitalism, Weber argues that rational order has become an "iron cage" in which humanity had be locked and which, due to the power of and efficiency of bureaucracy (rationalism more extreme form), was completely irreversible.

With that powerful framing, DiMaggio and Powell argue that we can revisit the metaphor because, perhaps building on the work of Meyer and Rowan (1977), we can see that bureaucracy is continuing to grow and organizations are becoming increasingly homogeneous, but that the processes that are driving this are (unlike in Weber's model), "making organizations more similar without necessarily making them more efficient" (p. 147).

Isomorphism is the drive toward similarity and the authors argue that there are two types of isomorphism: competitive (which they associated with the work of Hannan and Freeman and population ecologists) and institutional. Their paper focuses on institutional isomorphism.

The paper argues that are three central mechanisms behind institutional isomorphic change:

Coercive isomorphism which essentially are pressures from organizations that the organization in question in connected to or dependent on. These might be government mandates or might be requirements that a supplier makes.

Mimetic isomorphism which describes the degree to which organizations model themselves on each other. Organizations might model themselves on organizations they think are more legitimate or even more successful or they might be driven to do so by consultants or people who move between organizations.

Normative isomorphism describes pressures which are brought about by professions. For example, people hired with similar education backgrounds will tend to approach problems in similar way or inter-firm networks (like physicians group and hospital) will import norms that push organizations to adopt particular processes and routines or forms.

Each of these three areas are expressed explicitly as 11 distinct hypotheses at two levels of analysis. First, it considers the effect of organizational level characteristics on isomorphic pressures. For example, more dependence on academic credentials for a firm's hiring process will lead to more similarity. Second, it looks at hypotheses at the level of the organizational field. For example, the more organizations transact with governments or states, the more similar it is suggested they will be.

The hypotheses are not tested empirically in the paper.

Theoretical and Practical Relevance

Along with Meyer and Rowan's (1977) Institutionalized organizations: Formal structure as myth and ceremony, DiMaggio and Powell are usually cited as the seminal articles in the major neo-institutional stream in sociology. It has been cited more than 11,000 times and is one of the most highly cited papers in organizational sociology and has been used in a large number of different contexts and in a large numbers of different streams.

A summary of the paper, with synopses of the full hypotheses is online at Keith Rollag's org theory summary page.