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Assessment on DiMaggio & Powell 1983

What institutions discussed in the article would you expect to influence internationalization of
the firms and how? Read the article and explain the theory's main elements in relation to
internationalization. Kindly notice that you need to make the relations from the theoretical
concepts to phenomenon of internationalization as the article does not directly do it.

DiMaggio and Powell (1983) go further in their article than Meyer and Rowan’s (1977) article by
drawing attention to the process of organizational homogenization by which a field becomes
institutionalized. By doing so, they develop a theory of institutional isomorphic change.
There are two types of isomorphism: competitive and institutional. Competitive assumes a system
of open competitive markets. Institutional (Kanter, 1972) assumes a pressure on communes to
conform to the outside world, and other organizations. Firms compete for legitimacy, political
power, for social, as well as economic fitness.

There are three mechanisms of institutional isomorphism and the first one is coercive
isomorphism. It can be formal or informal. This can be pressures from other organizations in which
they are dependent upon and by cultural expectations from society. Some are governmental
mandates, some are derived from contract law, financial reporting requirements. Meyer & Rowan
(1977) argue that as a firm expands, it further reflects the institutionalized rules of the
government, meaning that firms become increasingly homogenized.
In the relation to internationalization this could mean the firm has to change its operating habits
to match the laws of the country it is expanding.

Mimetic isomorphism is the second one and it refers to an organization tendency to imitate
another organization's structure and can occur if the “environment creates symbolic uncertainty”.
This is very beneficial economically, as it cuts lots of costs, just copying already established plans
and structures. Related to internationalization Organizational models can be diffused through
employee migration. New employees from the international market where the firm is heading can
mimic intentionally and unintentionally for example their former firms’ practices.

Normative isomorphism is the third and final one. It refers to the influence that is driven by
professionalism over time to firms becoming more similar to one another. Everyone is educated
and trained to same level and same fields, becoming homogenized themselves. They approach
problems the same way and this is reinforced by socialization on the job. From the perspective of
internationalization professionals have much similarity to their professional counterparts in other
organization. This means that it does not depend in which country the firm operates; normative
isomorphism can occur.

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