I. the origin of species by means of natural selection

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)

In “Probing Theoretically into Central and Eastern Europe: Transactions, Resources, and Institutions,” we outlined the contributions of research in Central and Eastern Europe (CEE) to theoretical debates in business research. In this retrospective, we reflect upon the evolution of the field over the past decade. With the fading impact of CEE’s distinct shared history, we suggest that CEE best be analyzed as emerging economies, rather than as a distinct geographic entity. Emerging economy business research is converging on common themes and shared theoretical ideas, while identifying critical variations that constrain generalizations among and beyond emerging economies. This research thus highlights the need to develop a better understanding of the boundary conditions of scholarly theories of business knowledge. Over the past decade, the institution-based view has emerged from distinct intellectual traditions in institutional economics, organizational theory, and the analysis of business–government bargaining. Research in these converging lines of theorizing places contextual variations at the center of explanations of business phenomena around the world. We suggest that the institution-based view is evolving toward a paradigm, and offer suggestions on how to advance this research agenda further, in particular by exploring how firms engage with different sets of potentially conflicting institutions at multiple levels and locations.

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Theoretical foundations of emerging economy business research

A central and contentious debate in many literatures concerns the relationship between financial and social performance. We advance this debate by measuring the financial-social performance link within mutual funds that practice socially responsible investing (SRI). SRI fund managers have an array of social screening strategies from which to choose. Prior studies have not addressed this heterogeneity within SRI funds. Combining modern portfolio and stakeholder theories, we hypothesize that the financial loss borne by an SRI fund due to poor diversification is offset as social screening intensifies because better managed and more stable firms are selected into its portfolio. We find support for this hypothesis through an empirical test on a panel of 61 SRI funds from 1972-2000. The results show that as the number of social screens used by an SRI fund increases, financial returns decline at first, but then rebound as the number of screens reaches a maximum. That is, we find a curvilinear relationship, suggesting that two long-competing viewpoints may be complementary. Furthermore, we find that financial performance varies with the types of social screens used. Community relations screening increased financial performance, but environmental and labor relations screening decreased financial performance. Based on our results, we suggest that literatures addressing the link between financial and social performance move toward in-depth examination of the merits of different social screening strategies, and away from the continuing debate on the financial merits of either being socially responsible or not.

Beyond dichotomy: the curvilinear relationship between social responsibility and financial performance

For nearly two decades, scholars in international business and management have explored the implications of institutional voids for firm strategy and structure. Although institutional voids offer both opportunities and challenges, they have largely been associated with firms’ efforts to avoid or mitigate institutional deficiencies and reduce the transaction costs associated with operating in settings subject to those institutional shortcomings. The goal of this special issue is to advance scholarship on this topic by (a) exploring institutional voids that are new to the literature, (b) providing a deeper assessment of the different ways in which firms respond to these voids, and (c) utilizing diverse disciplines and theoretical approaches to do so. In this introduction, we first review and synthesize extant research on institutional voids, tracking the evolution of institutional void scholarship since the inception of the concept (Khanna & Palepu, Journal of Economic Literature, 45(2):331–372, 1997) and providing our perspective on its contributions and limitations. We then summarize the contributions of the articles included in this special issue. In addition to identifying an array of institutional voids – economic and social – the articles highlight four different strategies for responding to them: internalization, substitution, borrowing and signaling. Drawing on these, we develop new insights on the implications of institutional voids for firm behavior. We conclude with suggestions for future research.

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International business responses to institutional voids

We extend the “institutional voids” perspective on business groups by examining the value-adding potential of two of the characteristic features of business groups: their diverse portfolio and multi-entity organizational form. We maintain that portfolio diversity affords affiliates privileged access to opportunities hidden by incomplete strategic factor markets. We hypothesize that the multi-entity organizational form enables superior sensing and seizing of these growth opportunities by affiliate firms. We further suggest that, in the context of institutional reforms, these characteristics strengthen business group affiliates' ability to capitalize on the expanded set of opportunities made available by the reform program. Empirical analyses on a sample of Indian firms over the period 1994–2010 support our hypotheses. Implications for theory and future directions are discussed

Beyond institutional voids: Business groups, incomplete markets, and organizational form

Why conglomerates thrive (Outside the U S)

The viability of unrelated diversification as a strategy in emerging economies is an unresolved puzzle. Because business groups dominate the landscape in these economies, and are known to diversify either by expanding the scope of existing affiliate firms and/or setting up new firms, we argue that it is important to make a distinction between firm‐level and business group‐level diversification. The results of our study covering the 15‐year period following India’s economic liberalization confirm our thesis. Whereas all firms, including business group affiliates, reduced unrelated scope to negotiate product and capital market pressures, business groups took advantage of the opportunity‐rich, post‐reform environment to enter into new unrelated businesses by setting up new affiliates. Our findings echo suggestions that as institutions strengthen, the locus of unrelated diversification moves away from managers of public corporations to entities with different types of ownership structures. We present the business group as one such ownership structure.

Are there limits to diversification in emerging economies? Distinguishing between firm?level and business group strategies

Richard Dawkins (1976) introduced the concept of 'memes' as the basic unit of cultural evolution in his popular classic work 'The Selfish Gene'. As organizations can be conceptualized as cultural entities, it makes sense to explore how the concept of memes can be applied in organization studies. Several works have started to appear on this front. This paper offers an introduction to the concept of memes and an account of the literature in the field of memetics. Ideas related to organization studies are explored in detail. It is seen that two key ideas have informed the research in organization studies thus far - 'memes drive us' and 'memes are unit of cultural transmission'. I argue that organization researchers will gain more by following 'memes as unit of cultural transmission' idea than 'memes drive us' idea. 'Memes drive us' is axiomatic in nature, anthropomorphizes organizations and is non-falsifiable as a theory, while 'memes as unit of cultural transmission' gives hope to the effort of unraveling the black box of organizational culture.

Memes in Organization Studies: A Preliminary Research Agenda

This paper synthesizes the literatures from the organizational learning and knowledge management fields Two distinct epistemological traditions are identified and the literature under each tradition is synthesized separately Epistemology of possession considers knowledge as an object that can be codified, stored, retrieved and applied to achieve organizational outcomes The practice-based-perspective of knowledge assumes knowledge as an integral part of doing and as something that cannot be distinct from the process of learning The major contribution of this paper is to present an integrated model of organizational learning synthesizing the frameworks of Kolb, Crossan et al and Nonaka

K S Manikandan

Papers

Beyond institutional voids: Business groups, incomplete markets, and organizational form

Why conglomerates thrive (Outside the U S)

Are there limits to diversification in emerging economies? Distinguishing between firm?level and business group strategies

Memes in Organization Studies: A Preliminary Research Agenda

A Synthesis of Organizational Learning and Knowledge Management Literatures