How has Japan become a major economic power, a world leader in the automotive and electronics industries? What is the secret of their success? The consensus has been that, though the Japanese are not particularly innovative, they are exceptionally skilful at imitation, at improving products that already exist. But now two leading Japanese business experts, Ikujiro Nonaka and Hiro Takeuchi, turn this conventional wisdom on its head: Japanese firms are successful, they contend, precisely because they are innovative, because they create new knowledge and use it to produce successful products and technologies. Examining case studies drawn from such firms as Honda, Canon, Matsushita, NEC, 3M, GE, and the U.S. Marines, this book reveals how Japanese companies translate tacit to explicit knowledge and use it to produce new processes, products, and services.

The knowledge-creating company : how Japanese companies create the dynamics of innovation

What makes organizations so similar? We contend that the engine of rationalization and bureaucratization has moved from the competitive marketplace to the state and the professions. Once a set of organizations emerges as a field, a paradox arises: rational actors make their organizations increasingly similar as they try to change them. We describe three isomorphic processes-coercive, mimetic, and normative—leading to this outcome. We then specify hypotheses about the impact of resource centralization and dependency, goal ambiguity and technical uncertainty, and professionalization and structuration on isomorphic change. Finally, we suggest implications for theories of organizations and social change.

The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields (Chinese Translation)

The theory of the growth of the firm

The study of institutional work has emerged as a dynamic research domain within organization studies. In this essay, we situate the papers published in the Special Issue. We first review the evolution of institutional work as a scholarly conversation within organization studies. We then introduce the papers in the Special Issue, focusing in particular on where they fit into the current scholarly conversation and how they move us in important new directions. Finally, we discuss a set of neglected issues that deserve further attention.

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Institutional Work: Current Research, New Directions and Overlooked Issues

The New Masters of Capital: American Bond Rating Agencies and the Politics of Creditworthiness. By Timothy J. Sinclair. Ithaca, NY: Cornell University Press, 2005. 208p. $29.95. In his book, Timothy J. Sinclair makes a strong theoretical and empirical contribution to the growing political economy literature on the increasing influence of nonstate actors. More specifically, he draws upon a cogent interweaving of rationalist and constructivist approaches to reveal the various forms of power exercised by American bond raters, such as Moody's and Standard & Poor's. Moreover, by means of detailed case studies on the rating of corporations, municipalities, and national governments, he demonstrates the broad political implications of rating agency power in terms of both geopolitical and distributive questions. In both cases, Sinclair's central argument is that “rating agencies help to construct the context in which corporations, municipalities, and governments make decisions. Rating agencies are not, as often supposed, ‘neutral’ institutions. Their impact on policy is political first, in terms of the processes involved, and second, in terms of the consequences of competing social interests” (p. 149).

The New Masters of Capital: American Bond Rating Agencies and the Politics of Creditworthiness

In this article, we make the point that managerial domination as described by pragmatic sociology is an appropriate notion to make sense of complex forms of domination in contemporary organizations Based on Lemieux’s work on ‘grammars’, we complement approaches of complex domination put forward by pragmatic sociologists such as Boltanski and Thevenot We illustrate these ideas by means of an ethnographic study of the financial intermediation industry Our analysis sketches out an alternative conceptualization of power in such environments, and by so doing, helps us delineate the features that characterize complex financial domination We conclude by arguing that this type of domination is the result of specific contradictions inherent to the grammars of financial intermediation

‘Public’ Versus ‘Natural’ Grammars: Complex Domination in the Financial Intermediation Industry

Policymakers implement regulations with limited capacity to register the unexpected. We argue that unexpected events do occur when regulations are implemented and we develop the concept of explication to account for the performative misfires that generate them. Explication is the organisational process that allows abstract ideas to be transposed into material realities and it allows us to identify how regulatory texts can carry signs and intentions in absence of their authors. We investigate the implementation of Markets in Financial Instruments Directive (MiFID), a regulatory package that generated a market context that was significantly different from what its economic programme sought to achieve. The competitive model underlying MiFID aimed to create a level-playing field among European financial markets but in reality its explication reduced transparency. We make four contributions to organisation studies. First, we show that explication is a source of contingency in implementation. Second, we shed light on the individual and collective hermeneutic performance as the source of counterperformativity. Third, explication brings intention back into the discussion: intention emerges from the unintended consequences borne by regulatory texts from the moment interpretation begins. Fourth, we show how explication can be a widely useful concept in organisation studies because it brings the performativity of language back into material semiotics whilst maintaining a place for contingency.

How to undo things with words? Explication and the counterperformative effects of regulation

This chapter proposes to examine the justification effort to analyse institutional legitimacy within the credit rating industry. It presents a number of comments sent to the SEC within the context of public consultations on credit rating. It is intriguing that, despite the worst financial crisis since the 1930s and the identification of a suitable culprit in the rating agencies, proposed regulation should be so unsubstantial, doing so little to alter the rating system that has been implemented in the US since 1909 and in Europe since the mid-1980s. Criticism has been directed towards credit ratings on several occasions in the past, at any time agencies have been recorded as neglecting their mission to assign a rating determining the creditworthiness of an issuer or a debt issuance. With the qualification process in compliance with the test format, the field of credit rating initially illustrates the work of maintenance resulting from the characteristics of a standard compromise.

Benjamin Taupin

Papers

‘Public’ Versus ‘Natural’ Grammars: Complex Domination in the Financial Intermediation Industry

How to undo things with words? Explication and the counterperformative effects of regulation

Justification and critique in the credit rating system : Reaffirming the power of agencies 1