Davis Marquis

Organization Science

Vol. 00, No. 0, Xxxxx 2005, pp. 1–12 issn 1047-7039 eissn 1526-5455 05 0000 0001

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doi 10.1287/orsc.1050.0137 © 2005 INFORMS

Prospects for Organization Theory in the Early Twenty-First Century: Institutional Fields and Mechanisms

University of Michigan Business School, 701 Tappan Street, Ann Arbor, Michigan 48109-1234, gfdavis@umich.edu Harvard Business School, Boston, Massachusetts 02161, cmarquis@hbs.edu

Gerald F. Davis

Christopher Marquis

his paper argues that the research in organization theory has seen a shift in orientation from paradigm-driven work to problem-driven work since the late 1980s. A number of paradigms for the study of organizations were elaborated during the mid-1970s, including transaction cost economics, resource dependence theory, organizational ecology, new institutional theory, and agency theory in financial economics. These approaches reflected the dominant trends of the large corporations of their time: increasing concentration, diversification, and bureaucratization. However, subsequent shifts in organizational boundaries, the increased use of alliances and network forms, and the expanding role of financial markets in shaping organizational decision making all make normal science driven by the internally derived questions from these paradigms less fruitful. Instead, we argue that problem-driven work that uses mechanism-based theorizing and research that takes the field rather than the organization as the unit of analysis are the most appropriate styles of organizational research under conditions of major economic change—such as our own era. This sort of work is best exemplified by various studies under the rubric of institutional theory in the past 15 years, which are reviewed here. Key words: organization theory; social mechanisms; organizational fields; paradigms

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Organization theory has found itself at an interesting crossroads at the turn of the century. On the one hand, we are...