Escape from the Iron Cage? Organizational Change and Isomorphic Pressures in the Public Sector

Institutional theory suggests that organizations pursue legitimacy by conforming to isomorphic pressures in their environment. We extend previous research on institutional theory by distinguishing between two definitions of conformity (compliance and convergence) and by taking a comprehensive view of the organizational characteristics that might be subject to isomorphic pressures. This framework is applied to change between 2001 and 2004 in the internal characteristics of 101 public organizations in England. We find substantial evidence of compliance but more limited support for convergence. Furthermore, the impact of isomorphic pressures was stronger on organizational strategies and culture than on structures and processes. Thus, the relevance of institutional theory to change in the public sector depends on the definition of conformity that is used and the organizational characteristics that are examined. The explanation of organizational change has become an important research issue in recent years. Rational or ‘‘technical’’ perspectives suggest that the characteristics of organizations shift over time in order to pursue better substantive performance (e.g., higher efficiency or effectiveness). This view is implicit in the growing literature on public management and organizational performance. A variety of studies have tested the impact of public management on service delivery, on the assumption that new organizational forms lead to better results (e.g., Andrews, Boyne, and Walker 2006; Brewer and Selden 2000; Meier and O’Toole 2001, 2002; Rainey and Steinbauer 1999; Walker and Boyne 2006). An alternative view is offered by institutional theory, which argues that the primary objective of organizational change is not better substantive performance but greater legitimacy. In other words, organizations adapt their internal characteristics in order to conform to the expectations of the key stakeholders in their environment. Over time, norms and rules emerge that limit the management arrangements that are deemed acceptable. Organizations The authors acknowledge the contribution to data collection from Gareth Enticott, Cardiff University. Rick Delbridge and George Boyne gratefully acknowledge the support of the ESRC/EPSRC Advanced Institute of Management Research. Address correspondence to the author at [email protected]. doi:10.1093/jopart/mum038 Advance Access publication on December 21, 2007 a The Author 2007. Published by Oxford University Press on behalf of the Journal of Public Administration Research and Theory, Inc. All rights reserved. For permissions, please e-mail: [email protected] JPART 19:165–187