Question

Essay 3

Institutional theory studies how organizations can increase their ability to grow and survive in a competitive environment by becoming legitimate, that is, accepted, reliable, and accountable, in the eyes of their stakeholders. Institutional theory argues that it is as important to study how organizations develop skills that increase their legitimacy to stakeholders as it is to study how they develop skills and competences that increase their operational efficiency. New organizations enhance legitimacy by duplicating the goals, structure, and culture of other successful organizations.

The institutional environment is the set of values and norms that govern the behavior of a population of organizations. The best way for a new organization to gain and strengthen its legitimacy is to imitate the goals, structure, and culture of successful organizations in its population.

Organizational Isomorphism

As organizations grow and imitate others to survive, organizational isomorphism increases. Organizational isomorphism refers to the similarity among organizations in a population. Several reasons explain why organizations become similar:

Coercive isomorphism: Isomorphism is said to be coercive when an organization adopts certain kinds of values and norms because it is pressured to by other organizations or by society in general.

Mimetic isomorphism: Isomorphism is mimetic when organizations intentionally imitate and copy one another to increase their legitimacy. New organizations copy successful organizations if environmental uncertainty exists. They may duplicate structure, strategy, culture, and technology to survive. Because of mimetic isomorphism, a population of similar organizations, such as fast-food restaurants, will increasingly come to resemble one another. Some companies imitate at first, and then imitation diminishes. Late entrants need a unique competence because copying everything makes resource attraction difficult.

Normative isomorphism: Isomorphism is normative when organizations come to resemble one another over time because they indirectly adopt the norms and values of other organizations in the environment. This occurs as managers and employees change companies and bring norms and values. Industry, trade, and professional associations are another indirect way to acquire norms and values.

Explain the concept of Organizational Isomorphism in your own words: Do you believe in the accuracy of this concept? Do you think when companies copy from each other in an industry, thus replicating, or duplicating each other’s services or goods it is simply part of the competitive process, or it is out of lack of ethics?

Think of the ramifications of this process; for instance, think of the case between Apple and Samsung and what happened with the iPhone. Also, think of what is happening in the case of Amazon being a pioneer in the field of Cloud computing and other companies such as Ali Baba and Microsoft now following on his footsteps; as well, there are other examples on which you may want to comment.

Answer 1

Organizational Isomorphism is the similarities in the organizational culture, structure, theory, and operations of one organization with another. It can be intentional where one company intentionally follows the structure and culture of other company or unintentional when circumstances pressure them to imitate or copy other organization.

I think in an industry, imitating, duplicating or copying is a part and parcel of the game. Companies look towards each other products, and what consumers like in their competitors' offerings and try to bring the elements into their own offerings as well. Although some may consider it unethical, this prevents any one company from monopolizing the industry and exploiting the consumers. Also, competition means that each and every company tries to better or improve its products and services. This means the consumer is the winner in the end. Where a consumer is satisfied in the end, the process can be termed as successful and must be encouraged in industry.

Like Apple and Samsung, like Amazon and Alibaba, we have many examples of such imitation and it has all led to an increase in the features, quality, and efficiency of the products and services provided to the consumer.