We ask how institutionalization affects the way managers understand novel practices, and how that understanding affects adoption behaviour. We argue that all managers act as sensemaking agents who construct theories about novel practices on the basis of the theories they learn, the discourse in which they engage, and the behaviours they observe. As a consequence of their theorization, they grade the categories relevant to the novel practice. That is, they come to see some members as better exemplars of the category than others, and, we argue, more valued members of the category. Institutionalization leads to managers across the field developing a coherent set of category gradings. Consequently, late adopters, being more subject to institutional processes, will be more likely to adopt the most representative members of the category. We test this idea, and compare it to the idea that managers select processes through inter-organisational monitoring and mimicry, by examining the adoption of Manufacturing Best Practice programs in Australia and New Zealand. Our data support our arguments regarding theorization, but not inter-organisational monitoring.
|Name||UIUC College of Business Working Paper|
- category grading