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

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.

Where the production organisation has strong output controls and depends on managing relational networks, the institutionalised organisation has ambiguous outputs and depends on confidence and stability it achieve by following the rules of its environment—conforming both to the opinions of external constituents as well as the demands on internal st... See more

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.

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

Core argument: This paper argues that the formal structures of many organizations in postindustrial society (Bell 1973) dramatically reflect the myths of their institutional environments instead of the demands of their work activities. Societal / institutional complexity has added to the core activities needed to perform a productive act of labour.... See more

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

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.