Analyzing Institutions to Solve Big Problems

The academic study of institutions provides important insights into topics such as job design and health-care reform. But the field is a complex one, and it's not always obvious to outsiders how the intellectual tools of the trade are relevant to practical problem-solving.

In early June, some 140 institutional theorists from around the world gathered at Harvard Business School to address head-on how institutional theory research and tools can help practitioners address work-related and societal issues—and how academics in the field can explain their work to a broader audience.

The Inaugural Paul R. Lawrence Conference: Connecting Rigor and Relevance in Institutional Analysis honored the memory of a prolific scholar and longtime HBS faculty member who, at the time of his death in 2011, was the Wallace Brent Donham Professor of Organizational Behavior, Emeritus, at HBS.

"Paul's passion for his work, his deep attachment to both rigor and relevance, were our inspiration," said Associate Professor Julie Battilana, who organized the conference with colleagues Shon R. Hiatt, Mukti Khaire, and Christopher Marquis, all professors at HBS.

“Making things simple and understandable does not do anything to destroy the underlying rigor." —Rosabeth Moss Kanter

In his introductory remarks, Marquis cited the ever-changing health-care industry as an example of why institutional analysis is important. "It is a mess," he said. "And if you think about who might be able to solve these problems, it's many of the people in this room."

Much of the conference comprised presentations of scientifically rigorous research papers that provided clear implications for leaders and organizations. Topics covered included the evolution of the corporate world in the twenty-first century, social responsibility, social entrepreneurship and hybrid for-profit/nonprofit organizations, the transformation of work, globalization, collective action, and the recent financial crisis. Among the papers presented:

• How Institutions Constrain or Enable Leadership: Denominational Influences on Megachurch Pastors is an early-stage paper that looks at how leaders maintain the values of their institutions even as their industries rapidly change around them. Using the example of pastors who oversee enormous churches, the authors report that leaders can effectively emphasize their values by sharing stories about their institutions. Indeed, they have discovered that pastors of so-called megachurches publish an unusually large number of books, not only to connect to church members, but to spread the message to an external audience. (For example, televangelist Joel Osteen, who leads the largest megachurch in the United States, has written more than 20 books.)
  
  Writing books is an institutional act," said coauthor Marvin Washington, an associate professor at the University of Alberta. "It's the pastor's way of trying to connect to the broader environment."


• Weeding Out the Competition: How Alternatives Are Eliminated during Institutionalization looks at factors that make us take information for granted, even when the information isn't accurate. For example, the common perception is that the idea of legal medical marijuana is fairly new. But the truth is that marijuana was a popular treatment in the nineteenth century, and the drug was listed in the Dispensatory of the United States by the 1850s. The paper looks at how the Federal Bureau of Narcotics managed not only to illegalize the drug, but also to expunge the perception of marijuana as a worthwhile medication.
  
  "Ignorance requires our attention," said Renee Rottner, an assistant professor at the NYU Stern School of Business, who coauthored the paper. "We need to be rigorous about looking at history where things have been erased."


• "No Toilet, No Bride—Organizing for Development at the Base of the Pyramid" explores a 2012 sanitation initiative in which Indian Union Minister Jairam Ramesh advised women not to marry men whose houses lacked toilets. (As of the 2011 census, only half of households in India had a toilet; 75 percent had a mobile phone subscription.) The researchers set out to discover the extent to which the mobilization of women within villages, and the broader institutional dynamics between villages, fostered the initiative's success.
  
  In terms of institutional theory, the paper provides the opportunity to integrate organizational and movement arguments to examine institutional dynamics, said coauthor Johanna Mair, a visiting scholar at Stanford University.


• The Intra-Organizational Politics of Institutional Complexity is an in-depth case study of the rise and fall of a microfinance initiative at a Pakistani commercial bank, exploring the clashing logics of banks, governments, and the general goal of poverty alleviation. The paper sets out to increase rigor of institutional complexity theory by exploring the role of politics as process, said coauthor Jaco Lok, a senior lecturer at the Australian School of Business, University of New South Wales.


• Local Construction of a Global Standard: Foreign Share Ownership and Workplace Gender Diversity in Japan explains that historically, the Japanese corporate structure has made it difficult for women to enter into high-power positions. It then suggests that the recent uptick in female board members and managers is due to a belief among Japanese businessmen that American and British investors would be offended by a lack of gender diversity, and might withdraw their shareholdings. In fact, researchers Eunmi Mun (Amherst College) and Jiwook Jung (National University of Singapore) found that these investors were largely apathetic about the gender politics of Japanese corporations—yet this overestimation of Western progressiveness has led to tangible progress in Japan, as firms begin hiring and promoting more female employees.

The three-day conference also included talks from economist and Harvard President Emeritus Lawrence H. Summers, University of Michigan Professor Gerald Davis, and Rosabeth Moss Kanter, the Ernest L. Arbuckle Professor of Business Administration at HBS.

In her presentation, Kanter stressed the importance of prioritizing societal purpose. "The first thing I want you to think about is simply the question, why are you doing this?" she said.

It's also crucial for researchers to make their work accessible to the public by writing in language that will be comprehensible outside academia, Kanter added. "Making things simple and understandable does not do anything to destroy the underlying rigor."

Wrapping up the conference was a panel discussion on the future of institutional analysis featuring Patricia Thornton of Duke's Fuqua School of Business, Royston Greenwood of the University of Alberta, and Jay Lorsch, the Louis E. Kirstein Professor of Human Relations at HBS. The panelists acknowledged that achieving rigor and relevance can be a complex business, even among theorists who study complexities for a living.

Still, Lorsch stressed, it's important for professors to make sure that students understand institutional analysis research, and the methodologies used to achieve it. Otherwise, "We're helping people get professional degrees, and not much else. And that really reduces our credibility."