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Prospects for Organization Theory in the Early Twenty-First Century: Institutional Fields and Mechanisms

Author

Listed:
  • Gerald F. Davis

    (Stephen M. Ross School of Business, University of Michigan, 701 Tappan Street, Ann Arbor, Michigan 48109-1234)

  • Christopher Marquis

    (Harvard Business School, Morgan Hall 312, Boston, Massachusetts 02163)

Abstract

This paper argues that research in organization theory has seen a shift in orientation from paradigm-driven work to problem-driven work since the late 1980s. A number of paradigms for the study of organizations were elaborated during the mid-1970s, including transaction cost economics, resource dependence theory, organizational ecology, new institutional theory, and agency theory in financial economics. These approaches reflected the dominant trends of the large corporations of their time: increasing concentration, diversification, and bureaucratization. However, subsequent shifts in organizational boundaries, the increased use of alliances and network forms, and the expanding role of financial markets in shaping organizational decision making all make normal science driven by the internally derived questions from these paradigms less fruitful. Instead, we argue that problem-driven work that uses mechanism-based theorizing and research that takes the field rather than the organization as the unit of analysis are the most appropriate styles of organizational research under conditions of major economic change—such as our own era. This sort of work is best exemplified by various studies under the rubric of institutional theory in the past 15 years, which are reviewed here.

Suggested Citation

  • Gerald F. Davis & Christopher Marquis, 2005. "Prospects for Organization Theory in the Early Twenty-First Century: Institutional Fields and Mechanisms," Organization Science, INFORMS, vol. 16(4), pages 332-343, August.
  • Handle: RePEc:inm:ororsc:v:16:y:2005:i:4:p:332-343
    DOI: 10.1287/orsc.1050.0137
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    References listed on IDEAS

    as
    1. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-795, December.
    2. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
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