2016 Volume 8 Issue 1 Pages 5-25
In institutional theory research, one of the key questions is why and how organizations act differently to the institutional pressure. Past research has searched for explanatory factors mainly in organizations’ external networks and conditions. The purpose of this qualitative study is to explore whether and how decision making processes within organizations affect institutional isomorphism. This research particularly focuses on how and by what factors the legitimacy of a decision, to or not to follow an institutional pressure, in an organization is established. Interview-based comparative case studies were conducted, investigating 7 cases of mid-size large Japanese listed B2B companies about their decision making of adopting global talent management at their headquarters since 2000.
The study showed that the sensitivity to external legitimacy in organizational decision making processes plays a key role in determining how organizations follow the institutional pressure. In the observation, sensitive organizations (early adopters) searched for and willingly accepted the legitimacy from external sources as the signpost and internal persuasion tools. Non-sensitive organizations (late adopters), however, relied solely on their own internal legitimacy logic, particularly how their top management thought and whether the action would bring economic returns. The finding contributes to the field in three ways: a) it shows the significance of organizations’ internal processes, an understudied factor, in explaining the variance of organizations’ reactions to the institutional pressure, b) it presents a counterevidence of the traditional 2-stage model of Tolbert & Zucker (1983), and c) it suggests the potential for further important research areas such as the impact of the sensitivity (how an change initiative was legitimized and triggered) on the organizational change process and outcomes.
