Normative and Regulatory Dimensions of Institutional Culture

Introduction

An institution refers to repetitive and taken-for-granted social behavior supported by normative and cognitive systems giving meaning to social exchange and allowing self-reproduction of social order (Greenwood et al. 2008). Institutions are the sets of explicit and implicit norms and rules that structure social interactions, stabilize patterns of behavior, and rise normative expectations (Crawford & Ostrom, 1995; Hodgson, 2006; Azari & Smith, 2012). Institutions are a set of rules of the game in society, which can be formal and informal. Formal institutions are the spirit of contracts, economic rules, political systems, on the other hand, the informal institutions are norms, customs, practices, etc.

Institutionalism is an intellectual normative source to analyze values used to support the integrative and empirical approach to moral inquiry, transparent communication and normative underpinnings that provides practical contributions to society (Thacher, 2015)

Institutions are distinguished as the ones creating equilibria and stability through the understanding of individual preferences to optimize behavior at a given time and achieve the best results, and as rules or norms. Institutions as a set of norms or rules refer to shared beliefs among individuals creating an interactive behavior pattern among them to choose what is right or wrong to do (Crawford & Ostrom, 1995). Institutions are guided regulatory normative and cultural-cognitive elements related to symbols, behaviors, activities, and resources which are responsible for restricting actions, acting by empowering activities and actors.

Institutions tend to regulate the pictures of reality for the actions and participations of subjects in society. Actions and actors are interpreted as the common knowledge circulating among all subjects in society (Selznick, 1957). Institutions enable the ability to navigate social environments by shared expectations for norms of behavior facilitating predictions of actions and releasing the cognitive burden of time-consuming deliberations (Gatens, 1998; Patalano, 2007).

Institutional theory argues that institutions constitute norms, beliefs, social orders, systems of power and domination, inequalities, etc. (Barley & Tolbert, 1997; Creed et al., 2014; Friedland & Alford, 1991; Suchman, 1995). There are some theoretical efforts to unite the normative and descriptive paradigms leading to normative research intensify the description of the institutional contexts (Harris & Freeman, 2008; Nielsen & Massa, 2013; McLeod et al., 2016). An institutional theoretical framework proposed by Campbell (1998, 2004) distinguish conceptual distinctions between normative and cognitive which can be used strategically as background of theoretical assumptions and in decision making leading to categorization in cognitive, normative, background assumptions and public sentiments.

Institutional research using symbolic interactionism specify the extent of people embeddedness and constrained by societal structures, humanizing institutional structures and to analyze the experience of people in institutions and their emotional experiences about the institutional norms, conformity and hegemony achieved through practices taken for granted (Hallett & Ventresca, 2006b; Calhoun, 2001). Value-oriented research intends to fill the gap that distinguishes business from ethical concerns and separates descriptive and normative matters built on the argument that inseparable values are intertwined with the institutional context (Harris & Freeman, 2008; Freeman, 1994; Newbert, 2018; Wicks, 1996).