Clashing Fashions and Institutions: Mid-Life Uncertainty in Innovation Diffusion

Abstract

Organizational techniques are labels denoting linguistic prescriptions which organizations can implement to transform organizational inputs into organizational outputs. In Neoinstitutional theory, the theory of fashions in organizational techniques tends to explain the causes of these techniques’ relative transience. By contrast, the theory of institutions in organizational techniques tends to explain the causes of these techniques’ relative persistence. We use both theories of fashions and institutions to examine whether, why, and when over five-hundred organizational techniques persisted relatively permanently or disappeared relatively transiently. We do so by examining how the forces causing fashion transience, institutional persistence, or a combination of both, would affect these techniques’ hazard rate of disappearance; that is, the average risk that organizational techniques disappear, depending on how long they have endured. The article concludes with a tripartite theoretical, methodological, and practical conclusion. It first points to the benefits of using theories of fashions and institutions together. Second, it highlights the advantages of a multi-innovation strategy involving the study of hundreds of diffusing innovations and their hazard rate. Third, it presents the managerial implications, for practitioners, of being capable of estimating the likelihood that a new organizational technique will become either a shorter-lived fashion or a longer-lived institution.

Keywords: Diffusion, Management fashions, Institutionalization, De-institutionalization

JEL Classification: M10