“The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizations” was a ground breaking article by sociologists Paul DiMaggio and Walter Powell in 1983. In just a few short pages, they summarized the state of institution theory and a wide range of foundational works on institutionalization to offer an alternative explanation to Weber’s classic warning about rationalism. Weber was concerned that bureaucratization was becoming a way of efficiently and effectively controlling people such that there was no escape and no way to curb bureaucratic momentum. He referred to this as an “iron cage.”
In revisiting the iron cage, DiMaggio & Powell claimed that bureaucratization had been “achieved” (p. 147) and yet it did not explain fully why organizations found themselves looking more and more alike. Efficiency was far from the only reason why organizational forms appealed to others. Sometimes it was the exercise of control but other times it was a matter of adopting what seemed interesting or different just because it was not the status quo, or because experts or professionals promoted an idea or a way that they felt was better even when it was not fully tested or guaranteed to work. So what were these forces, or “mechanisms” of isomorphic change?
To answer this question, the authors begin with a definition of organizational fields – a collective of organizations that “in the aggregate, constitute a recognized area of institutional life” (p. 148). This followed from previous work by DiMaggio whereby he offered that such fields exist only to the extent they are institutionally defined. They may be an industry but they may be something else such as a profession or a body of regulatory agencies over a similar domain. From this, two forms of isomorphism can be described – competitive in the sense that organizations within a field adopt each other’s practices to make themselves relevant and attractive to customers and client. Institutional isomorphism is about homogenizing for political power, legitimacy, or social fitness independent of effects on actual organizational performance.
The remainder of the article explains institutional isomorphism as one of three types – coercive, mimetic, and normative. Coercive isomorphism is the result of external pressures on an organization to adopt a common standard based on expectations, government regulations or mandates, or perceptions of missing out or falling behind. Mimetic isomorphism draws from uncertainty and perceptions of risk. Organizations find themselves modeling others’ behaviors as an efficient or inexpensive way of mitigating uncertainty and avoiding sticking out in the wrong ways. Finally, normative isomorphism is explained as being rooted in professionalism, where formal education, professional networks, and other shared sources of expertise lead organizations to model what is perceived to be the state of the art or what a particular school or association is promoting as preferred approaches. This leads to a set of twelve “hypotheses” for further research built on these forms of isomorphism and their antecedents.
40 years later, and now organizations are entwined with the information age and new forms of isomorphic pressures around social media and like technologies abound. Is this the spirit of a new “iron cage”? We tackle this in Part 2 of the episode!
You may also download the audio files here: Part 1 | Part 2 | Supplement
Read with us:
DiMaggio, P. J., & Powell, W. W. (1983). The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American sociological review, 48(2), 147-160.
To know more:
Powell, W. W., & DiMaggio, P. J. (2023). The iron cage redux: Looking back and forward. Organization Theory, 4(4), 26317877231221550.
Levitsky, S., & Murillo, M. V. (2009). Variation in institutional strength. Annual Review of Political Science, 12(1), 115-133.
Oliver, C. (1992). The antecedents of deinstitutionalization. Organization studies, 13(4), 563-588.
Related episodes from the Talking About Organizations Podcast:
116: Resource Dependence Perspective — Pfeffer & Salancik
107: Institutionalized Rules and Formal Structures — Meyer & Rowan
