“Organizations compete not just for resources and customers, but for political power and institutional legitimacy, for social as well as economic fitness.”

— Paul DiMaggio

Source: "The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields," 1983, p. 150.

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Paul DiMaggio12

American sociologist 1951

James G. March (1928–2018) American sociologist

Source: Rediscovering institutions, 1989, p. 1-2

Johan Olsen (1939) Norwegian political scientist

James G. March and Johan Olsen, (1989) Rediscovering Institutions: The Organizational Basis of Politics. New York: Free Press. p. 1-2

“Institutions are the humanly devised constraints that structure political, economic, and social interactions. They consist of both informal constraints (sanctions, taboos, customs, tradition, and code of conduct) and formal rules”

Douglass C. North (1920–2015) American Economist

constitutions, laws, property rights
Source: Institutions (1990), p. 97; As cited in: Oliver E. Williamson (1996) The Mechanisms of Governance. p. 4

“In the United States… a handful of corporations centralize decisions and responsibilities that are relevant for military and political as well as economic developments of global significance. For nowadays the military and the political cannot be separated from economic considerations of power. We now live not in an economic order or a political order, but in a political economy that is closely linked with military institutions and decisions. This is obvious in the repeated "oil crisis" in the Middle East, or in the relevance of Southeast Asia and African resources for the Western powers…”

C. Wright Mills (1916–1962) American sociologist

Character & Social Structure (1954).
1950s

“The rise of the modern corporation has brought a concentration of economic power which can compete on equal terms with the modern state - economic power versus political power, each strong in its own field. The state seeks in some aspects to regulate the corporation, while the corporation, steadily becoming more powerful, makes every effort to avoid such regulation… The future may see the economic organism, now typified by the corporation, not only on an equal plane with the state, but possibly even superseding it as the dominant form of social organization. The law of corporations, accordingly, might well be considered as a potential constitutional law for the new economic state, while business practice is increasingly assuming the aspect of economic statesmanship.”

Adolf A. Berle (1895–1971) American diplomat

Source: The Modern Corporation and Private Property. 1932/1967, p. 357 (1967, p. 313)

“The importance to economics of the study of institutions is no longer a controversial proposition, thanks in part to the scholarly literature generated by the new institutional economics movement. Institutions are more than organizations – property is an institution, but not an organization – but organizations are an important form of institution and will be the focus of my paper, as it is, to a considerable extent, of the new institutional economics.”

Richard A. Posner (1939) United States federal judge

"From the new institutional economics to organization economics: with applications to corporate governance, government agencies, and legal institutions" (2010).

“Institutions are the humanly devised constraints that structure political, economic, and social interaction. They consist of both informal constraints (sanctions, taboos, customs, traditions, and codes of conduct), and formal rules (constitutions, laws, property rights). Throughout history, institutions have been devised by human beings to create order and reduce uncertainty in exchange.”

Douglass C. North (1920–2015) American Economist

Douglass North. (1991). "Institutions." Journal of Economic Perspectives, 5(1): 97-112; Abstract

“Classical organization theory suffers from "ethnocentrism": It ignores the significance of the political, social, and economic milieu in shaping organizations and influencing managerial practice.”

Douglas McGregor (1906–1964) American professor

Source: The Human Side of Enterprise (1960), p. 16 (p. 23 in 2006 edition)

“It [a power based model of organization] sees organizations a intentional human constructions but not necessarily rational systems guided by official goals; as bargaining areas rather than cooperative systems; as systems of power rather than coercive institutions reflecting cultural norms, and as resources for other organizations and groups rather than closed systems. If we define organizations, then, as intentional human constructions wherein people and groups within and without the organization compete for outputs of interest them under conditions of unequal power, we have posed the issue of effectiveness quite differently”

Charles Perrow (1925–2019) American sociologist

Source: 1970s, "Three Types of Effectiveness Studies," 1977, p. 101 ; As cited in: Diehl-Taylor (1997)

“Prophets do not help responsible Christian persons who seek to gain political and economic power as a means to serve the public good within the constraints of political, economic, medical, or other institutions.”

James Gustafson (1925) American academic

Source: "Varieties of Moral Discourse: Prophetic, Narrative, Ethical and Policy", p. 55

“Organizations compete not just for resources and customers, but for political power and institutional legitimacy, for social as well as economic fitness.”

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