Toward a cross-level understanding of institutional change: A microfoundational perspective

Traditionally, institutional theory has portrayed institutions as having a deterministic influence on lower-level institutional actors, such as organizations. It is argued that organizations become relatively alike when they are faced with the same institutional demands—a process termed “isomorphism”. This traditional position has been subject to major criticism because it did not explain observed organizational agency. These critiques resulted in an “agentic turn” in institutional theory. Scholars did sterling work in bringing agency into institutional theory by introducing the perspectives of: “institutional work”, “institutional entrepreneurship”, “hybrids”, and “decoupling”. However, in turn, these studies received criticism for portraying organization as overly “heroic” and overlooking the structural embeddedness of organizations. Therefore, more recently, the microfoundational perspective has been introduced to institutional theory. The line of argument is that this perspective offers a more nuanced view of agency versus structural determinism in institutional theory. In short, the microfoundation perspective explores the mechanisms through which higher-level institutions affect lower-level institutional actors, such as organizations, and vice versa. Although the microfoundational perspective shows promise, research is still in its infancy and highly fragmented. We, therefore, sought to contribute by firmly embedding the microfoundational perspective into institutional theory and advancing a definitive explanation of institutional phenomena. Based on a review of the literature (presented in Chapter 1), we developed a number of research avenues that seemed promising in pursuing our objective. We followed these research directions in four studies presented in Chapters 2 to 5. Our overall research question driving this dissertation was: “How can the microfoundational perspective in institutional theory advance an explanation of institutional phenomena?”