03 Nov 2006  Working Papers

Organizational Response to Environmental Demands: Opening the Black Box

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.

 

Author 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