Institutional theory, as applied to organizations, examines how the structures, rules, and practices of organizations are shaped not only by the pursuit of efficiency but by pressure to conform to the expectations, norms, and rules of their broader social and institutional environment. A key contribution associated with the theory is the concept of institutional isomorphism, developed by Paul DiMaggio and Walter Powell in a widely cited 1983 paper, which describes coercive, mimetic, and normative processes that cause organizations operating in the same field to become more similar to one another over time. The theory is widely used in organizational studies to explain why organizations often adopt similar structures and practices even when those choices are not clearly justified by efficiency alone.
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