Organisations & Society - Assignment 4
Assignment 4.1
In the current literature regarding business administration, there has been written about institutions
and the institutional theory, which can function as a model for the organization to look at their
environment, or the society as a whole. But to use this theory and the concept of institutions properly,
one first needs to define and understand the characteristics of such institutions, before it can be a
useful concept. Scott (2008) did this and came up with the following definition of institutions:
Institutions are comprised of regulative, normative and cultural-cognitive elements that, together with
associated activities and resources, provide stability and meaning to social life (Scott. 2008, p48).
Scott (2008) continues with defining the concept of institutions and states that they are multifaceted
and durable social structures, which are both compressed into symbolic elements, social activities, and
material resources. To further clarify the concept, Scott argues that institutions also can resist change,
due to their regulative, normative and cultural-cognitive elements. But when these institutions are
backed with tangible resources, they can also have a and incremental function. Something that Scott
(2008) calls empower activities and prevention activities.
Besides this definition and characteristics of the concept of institutions, Scott (2008) also
distinguishes three pillars, which are vital ingredients for making and supporting institutions: (1)
Regulative systems, (2) Normative systems, and (3) Cultural-cognitive systems.
Regulative systems
Almost all scholars agree on the existence of the regulative pillar, with respect to the institutional
theory. This pillar argues that institutions constrain and regularize behavior.
This pillar consists of to rule-setting, monitoring, and sanctioning activities. These regulatory
activities are able to develop rules, inspect other, etc. in order to influence (constrain and regularize)
(future) behavior (Scott, 2008).
Normative pillar
This pillar focuses on normative rules that introduce a perspective, evaluative, and obligatory
dimension into social life (Scott, 2008). This is in line with two other concepts: values (conceptions of
desirable situations or behavior), and norms (specify how things should be or should be done).
Furthermore, Scott (2008) states that the normative pillar and its characteristics create constraints on
social behavior, but can also empower it. In short, the normative pillar is seen as a stabilizing entity
with respect to social beliefs, norms, and values.
, Cultural-cognitive pillar
This pillar consists of shared meanings, common beliefs and interpretative schemes, that constitute
the nature of social reality and the frames which are used in order to make/give meaning to them. In
other words, this pillar helps us to understand the world in which we live and recognize the
components and actors in it (Scott, 2008).
Three pillars and legitimacy
Institutional legitimacy is based on the acceptability and credibility of organizations and/or its actions
and activities. So, legitimacy is the assumption or perception that something is desirable or
appropriate given the current circumstances, norms, values, and beliefs.
Consequently, legitimacy is some sort of condition, when there is a (perceived) consonance between
an action and the relevant rules, laws, programmes, etc.
We think that legitimacy is ‘’another kind of resource’’ and that it definitely is needed because,
without that legitimacy, several rules, norms, values and/or beliefs can be questioned by people. This
could mean that these rules, norms, values and/or beliefs could lose their foundation, or people could
even oppose them. With that, organizations could even lose their legitimacy (or even power or
legitimate power). To conclude, legitimacy definitely is important and another kind of resource,
which is needed for an organization in order to successfully operate in a society.
If one looks at the three pillars mentioned above, they can be linked to legitimacy. If this is done, it
can be said that the regulative pillar is about conformity to the explicit rules. In this case, legitimate
organizations are established and are operating in accordance with the current and relevant rules and
legal requirements.
The normative pillar is about a deeper, more moral based, assessment of legitimacy. In this case,
moral/social obligations and social (moral) norms are being emphasized, and the way organizations
fulfill them. So, if an organization handles these things with care and according to the current values,
norms, and beliefs, that organization is legitimate.
At last, the cultural-cognitive pillar, which is about preconscious, more taken-for-granted
understandings. An organization is legitimate, or its activities are legitimate when those actions and
consequences of them are in line with the cultural/cognitive understanding and assumptions of the
society in which the organization operates.
So, the organization’s actions are in line with shared-understandings, they are recognizable and
comprehensible. If that is the case, an organization is legitimate with respect to the cognitive-cultural
pillar.
Agency
Assignment 4.1
In the current literature regarding business administration, there has been written about institutions
and the institutional theory, which can function as a model for the organization to look at their
environment, or the society as a whole. But to use this theory and the concept of institutions properly,
one first needs to define and understand the characteristics of such institutions, before it can be a
useful concept. Scott (2008) did this and came up with the following definition of institutions:
Institutions are comprised of regulative, normative and cultural-cognitive elements that, together with
associated activities and resources, provide stability and meaning to social life (Scott. 2008, p48).
Scott (2008) continues with defining the concept of institutions and states that they are multifaceted
and durable social structures, which are both compressed into symbolic elements, social activities, and
material resources. To further clarify the concept, Scott argues that institutions also can resist change,
due to their regulative, normative and cultural-cognitive elements. But when these institutions are
backed with tangible resources, they can also have a and incremental function. Something that Scott
(2008) calls empower activities and prevention activities.
Besides this definition and characteristics of the concept of institutions, Scott (2008) also
distinguishes three pillars, which are vital ingredients for making and supporting institutions: (1)
Regulative systems, (2) Normative systems, and (3) Cultural-cognitive systems.
Regulative systems
Almost all scholars agree on the existence of the regulative pillar, with respect to the institutional
theory. This pillar argues that institutions constrain and regularize behavior.
This pillar consists of to rule-setting, monitoring, and sanctioning activities. These regulatory
activities are able to develop rules, inspect other, etc. in order to influence (constrain and regularize)
(future) behavior (Scott, 2008).
Normative pillar
This pillar focuses on normative rules that introduce a perspective, evaluative, and obligatory
dimension into social life (Scott, 2008). This is in line with two other concepts: values (conceptions of
desirable situations or behavior), and norms (specify how things should be or should be done).
Furthermore, Scott (2008) states that the normative pillar and its characteristics create constraints on
social behavior, but can also empower it. In short, the normative pillar is seen as a stabilizing entity
with respect to social beliefs, norms, and values.
, Cultural-cognitive pillar
This pillar consists of shared meanings, common beliefs and interpretative schemes, that constitute
the nature of social reality and the frames which are used in order to make/give meaning to them. In
other words, this pillar helps us to understand the world in which we live and recognize the
components and actors in it (Scott, 2008).
Three pillars and legitimacy
Institutional legitimacy is based on the acceptability and credibility of organizations and/or its actions
and activities. So, legitimacy is the assumption or perception that something is desirable or
appropriate given the current circumstances, norms, values, and beliefs.
Consequently, legitimacy is some sort of condition, when there is a (perceived) consonance between
an action and the relevant rules, laws, programmes, etc.
We think that legitimacy is ‘’another kind of resource’’ and that it definitely is needed because,
without that legitimacy, several rules, norms, values and/or beliefs can be questioned by people. This
could mean that these rules, norms, values and/or beliefs could lose their foundation, or people could
even oppose them. With that, organizations could even lose their legitimacy (or even power or
legitimate power). To conclude, legitimacy definitely is important and another kind of resource,
which is needed for an organization in order to successfully operate in a society.
If one looks at the three pillars mentioned above, they can be linked to legitimacy. If this is done, it
can be said that the regulative pillar is about conformity to the explicit rules. In this case, legitimate
organizations are established and are operating in accordance with the current and relevant rules and
legal requirements.
The normative pillar is about a deeper, more moral based, assessment of legitimacy. In this case,
moral/social obligations and social (moral) norms are being emphasized, and the way organizations
fulfill them. So, if an organization handles these things with care and according to the current values,
norms, and beliefs, that organization is legitimate.
At last, the cultural-cognitive pillar, which is about preconscious, more taken-for-granted
understandings. An organization is legitimate, or its activities are legitimate when those actions and
consequences of them are in line with the cultural/cognitive understanding and assumptions of the
society in which the organization operates.
So, the organization’s actions are in line with shared-understandings, they are recognizable and
comprehensible. If that is the case, an organization is legitimate with respect to the cognitive-cultural
pillar.
Agency
