ASSIGNMENT NO: 3

OVERVIEW: In this assignment we have to analyze the interrelationship among the cognitive aspect, normative aspect and the regulative aspect of the institutional theory.

INSTITUTIONS: Institutions are purely social things. Over time, sociologists have extended, expanded, and According to Giddens (1984) and institutional theorists (e.g., Powell and DiMaggio 1991, Meyer and Rowan 1991, for a review see Scott 2001), institutions stand out as the most durable of social structures; they are those "social structures that involve more strongly held rules supported by more entrenched resources" (Scott 2001). detailed theories of "social structure" so that a great deal of what was commonly referred to as social structure is now referred to in institutional terms. ), we have come to understand these structures as part of a continuing process through which humans continually and simultaneously create, experience and reorganize social structure. These theorists sought to merge structure and agency by focusing on social practice or on the duality of structure as both rule and resource.

Institutional Theory

A brief and general review of institutionalism provides a framework for understanding recent work of law and organization scholars. Scotts (2001) extensive review of institutions and organizations includes a definition of institutions as multifaceted, durable social structures, made up of symbolic elements, social activities, and material resources (49). They are enduring features of social life (Giddens 1984) and resistant to change (Jepperson 1991). Institutions are

of interest to sociologists because they are the site of social action and interaction that bridges the gap between agency and structure. Institutions are commonly thought of as social structure, but institutionalism incorporates agency by calling attention to the role of patterned social behavior and meaning making systems of social actors. Scott organizes the work on institutions around three pillars; regulative systems, normative systems and cultural-cognitive systems are crucial to a thorough understanding of institutions. Scott (2001) and Hoffman (1997) see these pillars as a continuum moving from the conscious to unconscious and from the legally enforced to the taken-for-granted (Hoffman 1997: 36) collective meaning systems and social practices. The regulatory aspect of organizations is the legally enforced and conscious aspect of institutions. It is probably the most clear and most commonly studied because it describes the objectivated (Berger and Luckmann 1966) world of explicit regulatory guidelines, procedures, rules or laws. In this aspect (or pillar) of institutions, rules are enforced either by interacting parties or by outside enforcing parties, commonly the state or state agent. Rules might be carried out by force, but often they also, or alternatively, involve inducements or rewards for compliance. Social scientists focusing on the economy or on historical state formation

frequently concentrate on the regulative aspect of institutions (see North and Thomas 1973; Campbell and Lindberg 1991; Williamson 1975; 1994). They frequently view institutions as backdrops to organizational behavior, or they examine the influence of one institution on another. The normative aspect emphasizes the role of values and norms in creating expectations and obligations. Social obligations are at the heart of normative schema; roles, role expectations, and professionalization are among the central mechanisms by which normative expectations comprise institutions. Law and organization scholars have discussed the normative pillar with special emphasis on professional organizations as the interpreters of the law. Selznick (1949) has described the effect of goals and interpersonal interaction as a limitation on behavior within organizations. DiMaggio and Powells (1983) category of normative isomorphism describes the process by which organizations become more similar to one another through professionalization (further described below). Edelman et al. (1991; 1992) finds that concerns of professionals and professional associations result in institutionalized conventions and patterns of behavior.

The cultural-cognitive aspect draws on the idea that social actors act because they attach meanings to their actions. Meanings are socially created through communication and interaction. The cultural cognitive pillar emphasizes templates for particular types of actors and scripts for action over roles and obligations. Theorists emphasizing culture and cognition extend Webers emphasis on human meaning making by elaborating on the types of scripts and belief systems that are employed on a cultural level in legitimating institutionalized social practices. Shared experiences and shared understandings about the world or the relevant aspect of the world in which particular social action is taking place result in taken-for-granted ways of operating. A cultural cognitive conception of institutions stresses the central role played by the socially mediated construction of a common framework of meaning (Scott 2001: 58). Much of the neoinstitutional work in sociology (as opposed to that in economics or political science) is focused on the cultural-cognitive area of institutionalization. Cognitive theory emphasizes cognitive frames for understanding the world. They may be macro worldviews or specific ways of classifying interpersonal aspects of life. The pillars do not work in isolation, however. As Weber rightly noted, coercive force (pure regulation) is inefficient, and authority is an effective coercive power because of its legitimacy, through which elements of regulatory, normative and cognitive-cultural aspects of institutions are combined. Scott (2001) explains that federal programs often secure local cooperation through the use of authority, in which coercive power is legitimated by a normative framework that both supports and constrains the exercise of power (53). Even those scholars whose main focus is the regulatory pillar (Edelman 1992; North 1990; Paternoster and Simpson 1996; Skocpol 1985; Sutton et al 1994) argue that actions of agents responsible for enforcing the rules of the game are shaped by the rules, but also by their own interests and by the meanings they attribute to their environment. Law and society scholars concentrate on the way that law in the abstract is negotiated and interpreted by social actors in the process of its implementation (Edelman 1992; Suchman and Edelman 1997). The effect of the law, then, is not the result of a clear regulatory mandate efficiently carried out or by normative understandings alone, but of a process of interpretation, reinterpretation and potential conflict fueled by actors use of cultural interpretations of action.

The pillars of institutions are interwoven, and they cut across all levels of sociological analysis, from interpersonal interactions to macro-societal cultural frames. My research focuses on institutional creation at the organizational level. Organizations are an appropriate level in which to examine the development of institutions if one wants to look at the way that individuals and groups collectively make sense of new situations. Organizations bridge the gap between individual and small group interaction and the larger society. In organizations, we should be able to see the way that large entrenched institutions intersect as they shape the creation of new institutions.