Oxford Handbook of Human Resource Management

9. 
   
   
   
   5. 1 Institutional Theory and Change
   
   
   
   

Institutional theory has been criticized for only being able to explain the persist-
ence and homogeneity of phenomena and being unable to deal with the role of
interests and agency in shaping action (e.g. Dacin et al. 2002 : 45 – 7 ). The work
of DiMaggio and Powell ( 1991 ), just discussed, shows how organizations change
due to the inXuence of coercive mechanisms, mimetic forces, and normative
pressures. However, these processes imply that organizations, in a speciWc organ-
izationalWeld, such as a sector or industry, will become more alike. Although
DiMaggio and Powell are able to account for change, it is change in thesame
direction within an organizationalWeld. Their approach does not take into account
the possibility of uniqueness due to speciWc interests and human agency. Green-
wood and Hinings ( 1996 ) tackle this problem by starting from the premiss that a
major source of organizational resistance to change derives from the normative
embeddedness of an organization within its institutional context. In order to be
able to account for change, they explore the interaction between context and
strategic choice, arguing that unique change can occur if an organization decouples
itself from the institutional context and reformulates its internal ‘interpretative
scheme.’ An organization’s interpretative scheme consists of assumptions about the

HRM

Strategy/

Policy/Goals

Normative:

Management

control system

depending on

the professiona-

lization of an

employee

category

Coercive:

Implementation

as a result of

institutional

forces

Mimetic:

Imitation as a

result of

uncertainty

Imitation as a

result of

trends/hypes

Fig. 9.2. Impacts of DiMaggio and Powell’s three mechanisms on HRM

hrm and societal embeddedness 175