In the wake of globalization and increased changes in the worldwide political environment, the need to bridge institutions to satisfy some demands while disregarding others has become inevitable. Understanding of organizational reactions to institutional convolutedness is integral to institutional theory. For this reason, organizations have been forced to react strategically to increasingly conflicting demands arising from their complex institutional environments. Snowballing political concerns amongst science policy societies have resulted in the enrichment of technology transfer and bridging between learning and industry. This strategic move underpins pluralistic political science, which promotes policymaking. Primarily, the bridging of institutions is aimed at ensuring sustainable social, political, and economic development. As a result, both academic and business institutions have developed various strategies to address sustainability challenges. Most of these strategies focus on creating hybrid systems that integrate institutional logics into the development of organizations. This essay explains the logic of bridging institutions and their significance in establishing sustainable hybrid organizations.
Conflicting Institutional Demands
Conflicting institutional demands arise from continued tension between advocacy and conformity to policies. Businesses and organizations are faced with changing demands from institutions such as investors and supervisory bodies. Pache and Santos reveal that these institutions provide the guiding principles within which organizations work (455). Besides, they bear significant control over organizational resources. Thus, their demands should be taken into consideration while planning socio-economic development. Globalization has resulted in increased conflicting demands as organizations strive to address local, regional, and internal institutional demands in the field of academics and industry. This state of affairs has further led to the development of institutions that are more specialized in hybrid business strategies (Pache and Santos 456). The success of an organization is significantly determined by the handling of both internal and external institutional environments. For instance, in microcredit organizations, stakeholders occasionally disagree on various approaches to profit maximization owing to controverting individual views (Pache and Santos 455).
According to some financial experts, the generation of substantial profits brings about increased investment power desirable in improved competition among firms, especially in the banking industry. However, profit maximization at the expense of borrowers by some microcredit firms is deemed incorrect as it creates institutional conflict. Bae reveals that many organizations have combined commercial goals with social missions with a view of solving institutional complexity (132). However, it is important to note that response to institutional complexity is highly determined by the embedded nature of an organization (Greenwood et al. 317).
The paradox of conflicting demands is also revealed in the US democracy. Policies drawn from different institutional facets have variously brought about contests between democracy and bureaucracy (Pache and Santos 455). There is a complexity of institutional logics where advocates of public policy see the state offices as developers of policy choices that support disputant resolutions. Contrarily, judicial advocates view the purpose of the state offices as enhancement of the effectiveness of the country’s justice system by solving as many cases as possible. These conflicting goals make the realization of democratic objectives challenging. Pache and Santos hold that the nature of demands and internal representation has significant influence on resolving complex institutional logics (455). Since internal representation in the US governance is powerful, in-house groups are blatantly committed to promoting and guarding decisions that are believed to promote political stability and the economy.
Responding to Conflicting Institutional Demands
The logic of bridging organizations is to respond to conflicting institutional demands. Organizations thrive in complex institutional environments owing to varying demands amongst investors and supervisory bodies. They are characterized by aspects such as perpetuity, constancy, and resistance to change. As a result, they conform to some institutional frameworks that are fundamental to the success of their operations. However, internal and external factors greatly affect their relationships with social, political, and economic environments. Institutional theorists believe that compliance with dynamic organizational demands is challenging (Pache and Santos 457). Various models that incorporate hybrid business strategies in the running of organizations have helped them react appropriately to both internal and external pressures. The models involve the development and integration of new organizational forms into existing institutional frameworks (Pache and Santos 458). This strategy serves as a driver for institutional change in organization.
Recently, researchers in the field of institutional theory have witnessed dynamic organizational environments due to changes in capital mobility, business ideologies, information technology, and consumer behavior among other aspects. Organizations encounter a number of challenges dealing with changing institutional logics (Ofei-Manu and Shimano 1619). This state of affairs brings about discrepancies between the core organizational goals and institutional prospects. When business environments become complex, organizations have to derive more apt institutional strategies that articulate and integrate particular practices into preexistent social principles. However, organizational response to hybrid institutional logics can either be conforming or resistant depending on the nature of the existing environment. According to Ofei-Manu and Shimano, the standing management plays an important role in incorporating new institutional forms into organizational interests (1620).
Numerous institutional theorists acknowledge the importance of intra-organizational dynamics in the implementation of strategic responses (Westney 377). Pache and Santos classify institutional complexity into three primary conceptualizations, which address varying levels of equilibrium among logics (458). The most unstable scenario is seen where behaviors among the players are led by a single dominant logic. The second scenario occurs when there is prolonged tension amongst many institutional logics until one of them becomes a compromise strategy to a stable solution. In this case, institutional complexity may occur in a well-adjusted environment amidst conflicting demands. In the third situation, “coexisting and competing institutional logics do not always resolve” (Pache and Santos 459).
Organizations respond to conflicting institutional demands differently by adhering to one or more strategies based on the existing logics. While some of them adjust to recursive approaches, others conform to adaptive strategies to address institutional conflicts. They include compliance, negotiation, evasion, defiance, and manipulation (Pache and Santos 459). Compliance (or acquiescence) is the most reflexive response approach to resolving institutional complexities. It can occur either voluntarily or involuntarily. Negotiation refers to a compromising strategy where the organization under conflict strives to achieve limited conformity by altering some demands to fit the prevailing environment. Organizational responses to institutional complexities can also be realized through evasion (or avoidance tactics). In this case, there is a tendency to evade institutional influence by leaving the realm that brings about organizational demands (Pache and Santos 460). Some organizations also practice defiance, an antagonistic approach that overtly casts off one of the conflicting demands with a view of resolving the complexity. Decisions arising from this strategy seek dismissal of institutional demands that contradict the prevailing socio-political environment. Lastly, organizations can manipulate the composition of institutional logics by influencing their advocates to regulate the cause of pressure (Pache and Santos 460).
Significance of Bridging Institutions
Bridging of institutions is a reactive response to challenges that arise from complex socio-political environments. It entails the integration of new organizational frameworks into prevailing institutional logics. Numerous researchers have revealed that a complex relationship exists between institutional logics and organizational practices (Trones 34). Organizations strive to respond to threats that arise from conflicting institutional demands. They achieve this objective by bridging institutions. This process involves the identification of internal and external environmental incompatibilities that affect capital, labor, consumer preferences, and beliefs (Trones 34).
At the outset, institutional logics offer strategies that assist organizations to interpret institutional complexities in social situations, which are also influenced by political decisions (Greenwood et al. 318). Logics provide a framework for understanding the socio-political world. Knowledge about social reality, apt tendencies, and guidelines for success is important for coping with institutional tensions. For instance, science and commerce are two complex fields that are characterized by diverse behaviors. While science focuses on research to improve technological means, commerce deals with pecuniary aspects mainly to generate profits. Nevertheless, these two fields complement each other through bridging institutional logics.
Furthermore, bridging of institutions plays a significant role in sustaining inter-organizational relationships. For instance, social enterprises and non-profit organizations are known for partnering with multinationals mainly for financial reasons. The relationships existing between these entities are continuously threatened by asymmetrical institutional logics (Ofei-Manu and Shimano 1621). In social identity theory, inter-organizational relationships feature collective dynamics and linkage to social capital despite the presumed distribution of benefits and resources. However, bridging of such institutions strikes a balance between a number of factors such as economic power and organizational goals. According to Greenwood et al., social-enterprise-corporate relationships persist upon such new working relationships, which address the complexity of their institutional environment (318).
In addition, the development of hybrid organizations marks a shifting trend in modern institutional theory. The bridging of institutions is seen as an emerging culture whereby organizations integrate positive social and environmental practices into production processes. Modern consumers believe in the production of goods that are not only environment friendly but also promote good healthy (Greenwood et al. 318). This underpinning depicts some of the complex institutional demands that compel organizations to apply proper response measure with a view of ensuring perpetuity and constancy whilst avoiding resistance to change. Ofei-Manu and Shimano posit that institutional logics depict vital guidelines for the realization of organizational distinctiveness and rightfulness (1621).
Conclusion
Increased fragmentation of centralized institutional settings has resulted in continued conflicting demands in modern organizations. Although numerous solutions based on compliance, evasion, defiance, and manipulation have been advanced as strategic responses to various levels of institutional complexity, the extent to which conflicting demands influence internal organizational environment needs further research. With the world continuing to globalize in changing socio-political environments, conflicting institutional logics have become unavoidable. However, there is a need to understand that it is nearly impossible for organizations to operate in free environments. Since each organization is guided by unique principles, complexities that arise among their institutional logics vary depending on the pressure exerted from both the internal and external environments. Therefore, it is recommended that organizations seek the best strategies that appropriately address their corresponding institutional intricacies. However, further research needs to be conducted to explore intricate ways in which organizations circumnavigate multifaceted institutional environments.
Works Cited
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Greenwood, Royston et al. “Institutional Complexity and Organizational Responses.” Academy of Management Annals, vol. 5, no. 1, 2011, pp. 317-371.
Ofei-Manu, Paul and Satoshi Shimano. “In transition towards Sustainability: Bridging the business and education sectors of Regional Centre of Expertise Greater Sendai using education for sustainable development-based social learning.” Sustainability, vol. 4, no. 7, 2012, pp. 1619-1644.
Pache, Anne-Claire and Filipe Santos. “When Worlds collide: The Internal Dynamics of Organizational Responses to Conflicting Institutional Demands.” Academy of Management Review, vol. 35, no. 3, 2010, pp. 455-476.
Trones, Maren. Hybrid Organizations: Defining Characteristics and Key Factors for Organizational Sustainability. A Qualitative Study from Latin America. MS Thesis. Norwegian University of Life Sciences, 2015.
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