Bases of Conformity and Institutional Theory: Understanding Organizational Decision-Making

This analysis investigates the micro-dynamics of organizational decision-making by exploring connections between institutional theory, on the one hand, and both social psychological research on conformity and recent work in economics on herd behavior and information cascades, on the other hand. The authors draw attention to the differences between normative and informational conformity as distinct motivational drivers of adoption behaviors by exploring their differential effects on the post-adoption outcomes of decoupling (e.g., Westphal & Zajac, 1994), customization (e.g., Fiss, Kennedy, & Davis, 2012), and abandonment (e.g., Ahmadjian & Robinson, 2001). The authors conclude that normative conformity leads to certain post-adoption outcomes while informational conformity is associated with others.