Mimetic processes within an interorganizational field: an empirical test

Administrative Science Quarterly,  Sept, 1989  by Joseph Galaskiewicz,  Stanley Wasserman

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Mimetic Processes within an Interorganizational Field: An Empirical Test

The paper explores DiMaggio and Powell's thesis that under conditions of uncertainty organizational decision makers will mimic the behavior of other organizations in their environment. We add to their discussion by positing that managers are especially likely to mimic the behavior of organizations to which they have some type of network tie via boundary-spanning personnel. Data are presented on the charitable contributions of 75 business corporations to 198 nonprofit organizations in the Minneapolis-St. Paul metropolitan area in 1980 and 1984. Using logistic regression models, we found that a firm is likely to give more money to a nonprofit that was previously funded by companies whose CEOs and/or giving officers are known personally by the firm's boundary-spanning personnel. Firms are also likely to give greater contributions to a nonprofit that is viewed more favorably by the local philanthropic elite. We also found that a nonprofit is likely to receive more money from a corporation that previously gave money to nonprofits whose directors sit on the nonprofit's board. We concluded that managers utilize the information gathered through extraorganizational, interpersonal networks to make decisions on how to relate to other organizations in their task environment and achieve organizational ends.(*)

UNCERTAINTY, RATIONALITY, AND INSTITUTIONAL PROCESSES

The study of decision making under conditions of environmental uncertainty still occupies a central position in the organizational literature. Since the pioneering work of Simon (1965; March and Simon, 1958), it has been clear that while organizational decision makers may strive to make rational (i.e., fully informed) decisions, they often find themselves making decisions with less than complete information. Often managers find they do not have information on changes in their environment, how these changes will affect their organization, or if their response to these changes will have the intended consequence or effect (Milliken, 1987). Uncertainty is especially common in the interorganizational arena, inasmuch as the environment is made up of less than fully informed organizations that are making strategic choices in light of the strategic choices of other uninformed organizations. Organizational theorists have been preoccupied with identifying various structural solutions to the problem of uninformed decisions. Management can invest in boundary-spanning roles (Aldrich, 1979), vertically integrate operations (Williamson, 1975, 1981), hire agents (Shapiro, 1987), or strategically fill board positions (Pfeffer, 1972, 1973; Burt, 1983). Although these strategies are ancillary to production functions, because the prospect of making uninformed decisions haunts administrators and managers, considerable time and effort is invested in them. DiMaggio and Powell's (1983) contribution to this literature points out that decision making under conditions of uncertainty is often influenced by subtle social processes--coercive, normative, and mimetic. In an information vacuum, managers look for direction outside of their organizational boundaries and may find themselves pursuing options that have little to do with either efficiency or goal attainment. For example, managers may compulsively conform to rules and regulations postulated by the state or the norms of the larger society. While their actions may not make the organization more profitable or enable it to better achieve its ends, these measures will at least ensure the organization's legitimacy. Alternatively, managers may model their organizations after other organizations in their field. They are especially likely to imitate organizations they perceive as more successful. Again, efficiency and goal attainment are of minimal importance. A sense of simply "doing something" or becoming identified with "successful" organizations is more critical. In a sense, mimicry is another way to accrue an external referent of prestige (Perrow, 1961). This a particularly attractive strategy when significant others in the organization's environment have little else upon which to judge an organization's actions. Finally, managers may turn to norms and standards held sacred in their business and professional circles. These circles have a set of "routine" or "acceptable" solutions to certain managerial and professional problems. These solutions are institutionalized in the occupational subculture of the profession. In practice, these standards of behavior are communicated to managers in graduate school, workshops, seminars, training sessions, and through professional and trade magazines. Furthermore, as managers change jobs and move from one organization to another, they take with them these norms and problem-solving strategies. One of the more attractive features of DiMaggio and Powell's thesis is that these processes can operate either through the conscious choice of managers, as suggested above, or without the principals' cognition. A common theme in the institutional literature is that certain organizational decisions are "taken for granted" or just seem "obvious". Decision makers do not consciously engage in a strategic choice but, rather, are "compelled" to take certain actions. For example, because of their socialization into societal or professional values and norms, managers pursue strategies without reflecting on alternative courses of action or consciously weighing options. Thus coercive, mimetic, and normative processes can be operative either with or without the knowledge of the decision maker.