Chapter 7 The institutional environment and organizational change
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The main purpose of this book has been to specify key components of the institutional environment surrounding organizations in order to understand how the institutional environment is related to how organizations work, act and change. The point of departure was the lack of cohesive discussion in the institutional organization and management literature. book has been structured on a model where I first discussed what the institutional environment is made up of. Then the discussion shifted to how the institutional environment affects individual organizations and decision-makers in these organizations. Next I argued that elements in the institutional environment and organizations are linked through the processes of decontextualization and recontextualization of institutional products. In this chapter, I discuss why organizations do this. Why do organizations and CEOs around the world subject themselves to the difficulties of trying to live up to the demands of the institutional environment? Can organizations and their managers not just ignore institutional pressure and demands, and go about their business? Is it possible for organizations to resist demands for change or handle pressure from the institutional environment in some way?

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