Theorization of New Practices in Emerging Organizational Fields

Executive Summary Organizational actions are subject to multiple interpretations by the constituents of organizational field and are often prone to lose legitimacy in an uncertain environment. To ensure that organizational practices are given meaning in a deliberate way, actors resort to ‘theorization’. The institutional theory literature looks at theorization as a legitimacy seeking strategy. IT defines the goal of theorization as mobilizing support and justifying new courses of action. By linking legitimacy, theorization, and emerging field, this article explores the question of how do the organizations theorize a new practice in an emerging field. Emerging organizational field is distinguished from a mature organizational field across four dimensions: extent of interactions among organizations, defined structure of domination and pattern of coalition among organizations, information sufficiency within the organizational field, and existence of commonly shared purpose among organizations. Theorization would focus on two important questions for justifying a new practice: ‘base of legitimacy’ and ‘audience for seeking legitimacy’. The article argues that in an emerging field, organization would theorize new practices with variants of moral and pragmatic legitimacy as base and would target the constituents of normative and market governance structure as the intended audiences. The article presents four propositions linking each of the dimensions of the emerging organizational field. It suggests that organization would theorize new practices by focusing on exchange, procedural, structural, and consequential legitimacy. The article contributes to existing literature by linking the characteristics of the emerging field to focus and audience of theorization strategy. With the growing prevalence of hybrid organizations, organizations are commonly exposed to multiple and even contradictory institutional demands. Understanding the focus of theorization and the intended audience can help these organizations to be more persuasive in seeking legitimacy.