Social Institutional Theory

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The theoretical framework of the study is presented in this chapter. Firstly, the new institutional theory is explained. The application of the institutional theory is valuable in this research, as the field of social entrepreneurship is growing, there are increasing awareness about this type of organizations in the society. As DiMaggio and Powell (1983) point out, the homogenization powers affect organizations, when the field becomes defined. Moreover, organizations which are involved in a human service sector are influenced more by regulations, consequently more institutionalized (Meyer & Rowan, 1977). Thus, it is important to explore how the social enterprise adopt to its institutional context; which sources and types of the environmental…show more content…
In the sociological view of the institutions, the focus is on the interaction between different institutions. (Scott, 2001) Furthermore, in this view of the theory, norms and values of an organization and society are concentrated on. It is proposed that organizations adapt to the institutionalized rules, which are enforced by other organizations in the same field, as well as the society (state, professionals, public). (Hasenfeld, 2010) For instance, Defourny and Nyssens (2010) argue that public policies might shift emphasizes of social enterprises through institutionalization forces. The scholars give an example of social enterprises established in 1980s, which at the beginning of their work aimed primarily on empowerment and integration of disadvantaged people through employment in the enterprise. The main idea was to assist them to regain self-control “through democratic management structures in which the disadvantaged workers were given a role, and/or through the production of goods and services generating collective benefits” (Defourny & Nyssens, 2010, p. 237). Although integration into the main labour market was not the main emphasis of the social enterprises at the time, due to involvement in public sector schemes, these enterprises were pressured to change their main objectives into integration…show more content…
357) can be applied. It means that in order for the institutionalized organization to be viewed as legitimate in the circumstances when there is no way to measure its effectiveness, the belief that members of the organization do their best is enough. “The more the organization’s structure is derived from institutionalized myths, the more it maintains elaborate displays of confidence, satisfaction, and good faith, internally and externally” (Meyer & Rowan, 1977 p. 358). The benefit for a loosely coupled organization of appearing as it supports institutionalized rules that it can spontaneously ignore these rules in actual activities. Although the internal activities do not fit the external appearance, both the organization and the society would be satisfied. The disadvantage is that inspection of the actual activities is potentially harmful and can reveal the inconsistencies between the formal structure and activities. Thus, inspections and evaluations are avoided or ceremonialized. (Meyer & Rowan,

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