The institutional theory was developed in the 1970s in the USA by authors like John Meyer, Paul DiMaggio, and Walter Powell. The goal of the theory is to explore how institutions are created, function, and are diffused. The institutional theory focuses on legitimacy as a crucial concept and sees the fight for legitimacy as a force that creates isomorphism of organizations and institutions. Core assumptions of the institutional theory are: 1) institutions act as governance structures that use social rules to control individual behavior, 2) those who conform to these rules are given legitimacy, 3) institutions tend to be inert and resist change, 4) when change does happen past structures and rules influence new institutional arrangements.

Authors: Meyer W. John. Abrutyn Seth, Beland Daniel, DiMaggio Paul, Dobbin R. Frank, Ramirez O. Francisco, Rowan Brian, Strang David, Tolbert Pamela, Walter Powell, Zucker Lynne.

Books:

Meyer, John. The Structure of Educational Systems: Explorations in the Theory of Loosely-Coupled Organizations (1977);

     -     Environments and Organizations (1978);

     -     Organizational Environments: Ritual and Rationality (1983);

     -     Institutional Structure: Constituting State, Society, and the Individual (1987);

     -     Institutional Environments and Organizations (1994);

     -     Globalization and Organization (2006);

     -     Hyper-Organization: Global Organizational Expansion (2015);

Powell, W. W. & DiMaggio, P. J. (Eds.), The New Institutionalism in Organizational Analysis (1979).