Working Papers

Organizational Response to Environmental Demands: Opening the Black Box

Published:November 3, 2006
Paper Released:October 2006, revised June 2007
Authors:Magali A. Delmas and Michael W. Toffel

Executive Summary:

How and why do organizations respond differently to pressures from different stakeholders? This question is central to organizational theory and feeds into strategic management research as well. Delmas and Toffel develop and test a model that describes why organizations respond differently to similar stakeholder pressures. They suggest that differences in how organizations distribute power across their internal corporate departments lead their facilities to prioritize different institutional pressures and thus adopt different management practices. Key concepts include:

  • Stakeholder pressures are channeled to different organizational functions, which influence how they are received—and acted upon—by facility managers.
  • As a result, managers of facilities that are subjected to comparable institutional pressures may adopt distinct sets of management practices to appease their external constituents.

About Faculty in this Article:

HBS Faculty Member Michael W. Toffel

Michael Toffel is an assistant professor in the Technology and Operations Management unit at Harvard Business School.

Abstract

This paper suggests how institutional theory can explain enduring differences in organizational strategies. We propose that differences in how organizations distribute power across their internal corporate departments lead their facilities to prioritize different institutional pressures and thus adopt different management practices. Specifically, we argue that external constituents who interact with particularly powerful corporate departments are more likely to influence facility managers' decisions. As a result, managers of facilities that are subjected to comparable institutional pressures adopt distinct sets of management practices that appease different external constituents. Using an original survey and archival data obtained for nearly 500 facilities, we find support for these hypotheses.

Paper Information