Center for Responsible Business

This paper suggests how institutional theory can explain enduring differences in organizational strategies. We propose that differences in how organizations distribute power across their internal corporate departments lead their facilities to prioritize different institutional pressures and thus adopt different management practices. Specifically, we argue that external constituents who interact with particularly powerful corporate departments are more likely to influence facility managers’ decisions. As a result, managers of facilities that are subjected to comparable institutional pressures adopt distinct sets of management practices that appease different external constituents. Using an original survey and archival data obtained for nearly 500 facilities, we find support for these hypotheses.