Institutionalized Organizations: Formal Structure as Myth and Ceremony on JSTOR

Organizational structures are created and made more elaborate with the rise of institutionalized myths, and, in highly institutionalized contexts, organizational action must support these myths. But an organization must also attend to practical activity. The two requirements are at odds. A stable solution is to maintain the organization in a loosel... See more

Proposition 6. Institutionalized organizations seek to minimize inspection and evaluation by both internal managers and external constituents.

Proposition 5. The more an organization's structure is derived from institutionalized myths, the more it maintains elaborate displays of confidence, satisfaction, and good faith, internally and externally.

Proposition 4. Because attempts to control and coordinate activities in institutionalized organizations lead to conflicts and loss of legitimacy, elements of structure are decoupled from activities and from each other.

Proposition 3. Organizations that incorporate societally legitimated rationalized elements in their formal structures maximize their legitimacy and increase their resources and survival capabilities

The rise of professionalized economics makes it useful for organizations to incorporate groups of economists and econometric analyses. Though no one may read, understand or believe them, econometric analyses help legitimate the organization's plans in the eyes of investors, customers (as with Defense Department contractors), and internal participan... See more

modern societies are filled with institutional rules which function as myths depicting various formal structures as rational means to the attainment of desirable ends.

Proposition 2. The more modernized the society, the more extended the rationalized institutional structure in given domains and the greater the number of domains containing rationalized institutions.

Proposition 1. As rationalized institutional rules arise in given domains of work activity, formal organizations form and expand by incorporating these rules as structural elements.