Informal and Formal Institution The unclear Core of Institutional Organizational Theory
Type
conference paper
Date Issued
2024-06-27
Author(s)
Abstract
This theoretical article offers a constructive critique of new institutional organization theory. It makes a positive contribution by qualifying the all-encompassing and vague notion of “institution.” The question raised in this article is simple: what is an institution? It is shown that “institution” in fact covers two idealtypically presented phenomena, formal institutions and informal institutions, which in effect may be similar, but whose origin, maintenance, and change are different. Formal institutions are the result of decisions for others about principles that are supported by explicitly stated and enforceable sanctions, and offer predictability of behaviour. The decisions are typically codified in written texts, and those making them can be held accountable. Formal institutions preferably require the analysis of documents in which decisions for others leave traces. Informal institutions are taken for granted, the result of mutual adjustment, are maintained by sanctions, and offer predictability of behavior. They are hard to change, and no one can be held accountable for them. The making, maintenance and change of informal institutions could be studied in practice using interactive qualitative methods. The distinction presented clarifies what researchers practice and it provides scope conditions of the usage of the different terms, that leads to improved understanding of institutions.
Language
English
Keywords
Organization
theory
order
socialization
internalization
indecision
HSG Classification
contribution to scientific community
Event Title
SASE 2024
Event Location
Limerick
Event Date
24.6.24-27.6.24
Subject(s)