Institutional Theory

Overview

Institutional theory explains why organizations within the same field become structurally similar (isomorphism) — not necessarily because the adopted practices are efficient, but because institutional pressures demand conformity for legitimacy and survival. DiMaggio and Powell (1983) identified three isomorphic mechanisms.

When to Use

• Explaining structural similarity across organizations in a field
• Analyzing whether a practice was adopted for efficiency vs legitimacy
• Evaluating regulatory, competitive, or professional pressures on organizations
• Understanding resistance to change despite rational arguments for it

Assumptions