Organisations and Institutions

Organisations and institutions

Unit 3: Organisations and institutions

1.1 Introduction to this section

1.2 Institutions and knowledge production

Question 11

Answer

Question 12

Answer

Question 13

Answer

1.3 Institutions and collective action

Discussion

Discussion

Discussion

Discussion

Discussion

2 Clusters and supply chains

Case study

Discussion

3 Associations, NGOs and networks

3.2 Non-governmental organisations (NGOs)

3.3 Innovation in institutions: policy and NGOs

Description

Discussion

4 Organisations and communities of practice

4.1 Communities of practice

Description

Discussion

Conclusion

Next steps

References

Acknowledgements

Notes

Unit 3: Organisations and institutions

This unit examines different ways in which the institutional framework relevant to innovation can be viewed, and how different organisational configurations influence the way in which innovation processes operate. To a certain extent this area has been introduced already, since it is almost impossible to separate out institutional factors when considering technology policy and innovation processes. Similarly the different team approaches institutionalised in design and innovation activities, ideas about technology shaping and the role of government in promotion and regulation all raise institutional issues in policy making.

1 The institutional perspective

Giddens (1990) noted that “many ... aspects of social life may be institutionalised: that is, become commonly accepted practices which persist in recognisably similar forms across generations ... institutionalised forms of social conduct refer to modes of belief and behaviour that occur and recur, or....are socially reproduced”. Types of such institutions include: language, family and kinship, economic institutions, political institutions, religious institutions, educational institutions, the media, the monarchy, markets, trade unions, corporations, division of labour (occupational structures). Note that this concept of the term ‘institution’ differs from the way the term is used in everyday language to mean ‘collectivity’ like a prison, hospital, court. It also refers to established ways of doing things, like the institutionalisation of work conflicts through for example rights of workers in the workplace, trade union rights of representation, collective bargaining. Such institutional forms were regarded as arising from major social transformations which have affected all societies, such as industrialisation and urbanisation. Institutions are often different in different societies, although globalisation is creating similarities.

During the late twentieth century and early twenty first century, as society has become more fragmented, pluralistic and dynamically changing, sociologists (including Anthony Giddens) have tended to de-emphasise patterned behaviour over the generations, and emphasise how institutions are reproduced and transformed. Institutions are seen as more pluralistic, and subject to more rapid change. The modes of belief and behaviour that are reproduced are similarly more pluralistic (even fragmented), and subject to change. This has led to a development of institutional theories in economics, politics and sociology (which have similar concerns, but different emphases).

The well-known economist Douglass North sees institutions as establishing the ‘rules of the game’ within which organisations act, collaborate and compete. And taking a broader perspective he writes: “Institutions include any form of constraint that human beings devise to shape human interaction” (North, 1990). He argues that they consist of formal rules, and unwritten codes of conduct, as well as the structures (political/social) for enforcing such rules. Examples of such rule structures include:

• political and legal definitions of property,
• contracts,
• markets (the way different types of markets work),
• specific types of organisational structures
• the multi-divisional structure that became typical of large multi-nationals in the second half of the twentieth century,
• the development of the conglomerate model of corporations,
• the current lean, de-layered, focused corporate model
• the venture capital form that predominated in Silicon Valley in the USA
• at the inter-organisational level: industrial districts (or clusters), legislative and regulatory bodies.

Scott and Meyer (1994) argue: “The visible structures and routines that make up organisations are direct reflections and effects of rules and structures built into (or institutionalised within) wider environments. Organisations reflect patterns or templates established in a wider system. ...school, firm or hospital structures reflect standard forms created in the wider environment.”

This emphasis on contextual (institutional) factors should not be seen in any way as deterministic, acting as constraints on agency or the choices made by individuals and organisations.

So as well as structural elements, there are cognitive and ideological dimensions to the institutional framework. For example, the professionalisation of an occupation will influence the preferred options available to an agent (someone or some organisation taking action), the apparent success of Japanese forms of business organisation will help shape the prevailing ideology about work organisation, and thus the choices made by an agent; similarly for the growth of ‘human resource management’ as a set of management theories and practices, transmitted via MBA programmes and professional associations.

Scott and Meyer come up with the following definition: “Institutions are symbolic and behavioral systems containing representational, constitutive, and normative rules together with regulatory mechanisms that define a common meaning system and give rise to distinctive actors and action routines.”

Institutions operate at a variety of levels. Williamson (1985) distinguishes two levels: wider institutional environments and institutional arrangements. In other words at one level more abstract forms of rules and practices like the way markets operate, and at another level more concrete forms such as regulatory bodies.

In the context of technology policy and technology strategy, to adopt the perspective of institutions and organisations means to focus on a wide range of rules and practices as well as institutional bodies. For example when looking at innovation in small firms, it involves not just examining internal factors, but also examining how its institutional context shapes internal operations. This might include examining:

• how its market operates
• what role is played by trade bodies
• how a regional or national system of innovation operates
• how local and regional governments stimulate and regulate its technologies
• how professionalisation of certain types of staff influences practices
• how the educational system develops a skill and knowledge base for the firm’s activities
• how laws are interpreted
• how regulatory bodies protect or constrain the firm
• the influence of industrial production systems like Japanese production systems, etc.

In this unit we take some interesting examples of institutions and examine the different ways they have been researched.

This section is concerned with developing different views of the institutional context for technology policy and innovation by examining the work of Elinor Ostrom which looks at different institutional arrangements for managing common pool resources (such as water) where ‘tragedy of the commons’ outcomes so frequently occur.

Section 2 considers ‘clusters’ – sets of firms within a region that are interlinked directly or indirectly. Clusters have become a major focus of research since they are seen as providing a very effective interorganisational form of innovation and competitiveness, and their effectiveness, as we shall see, is strongly influenced by institutional factors.

Section 3 is concerned with associations, NGOs and networks. Networks are an important interorganisational form, but they vary in their characteristics. For example clusters typically include networks of small and medium sized enterprises.

Section 4 looks at organisations and network structures, such as a relatively recent way of conceptualising internal groups of staff as communities of practice, and how structure can be important for organisational learning. Knowledge management is an important theme throughout the Unit, and communities of practice is a particularly useful way of examining how knowledge is reproduced and managed within organisational and interorganizational networks.

1.1 Introduction to this section

This section is concerned with broad approaches to conceptualising and researching institutions. It unpacks an approach to innovation, termed “Mode 2” in which new forms of knowledge production occur in more detail, while the reading demonstrates the importance of exploring contrasting approaches to a specific issue: common pool resources (such as water, fish resources, etc). These contrasting approaches are typical of distinct institutional theories and different institutional arrangements for managing such problems. These are based on: property rights approaches, governmental regulation, and self-managed frameworks. The reading by Elinor Ostrom is particularly useful for our purposes, because it provides a clear exposition of the research approach adopted.

1.2 Institutions and knowledge production

As the pace of economic change increases, many commentators are noting that innovation in goods and services is increasing at a similar pace, and that this is placing more and more pressure on organisations to develop new ideas, new know-how, expertise, new technologies. This trend has become so significant that people are using the term ‘knowledge economy’ to describe the dominant feature of such economies. Thus knowledge production and knowledge management have become important intellectual themes in technology policy and innovation discourse. The traditional way of producing knowledge is characterised by the Newtonian three phase ideal where, simplistically, basic science precedes applied science, which leads to technological development. Traditionally the knowledge producing institutions are universities, government research departments and laboratories, corporate laboratories, etc. A set of academics talk about these institutions and the institutionalised rules associated with the production of knowledge as “Mode 1” innovation activity. This refers not just to these institutions, but also to what counts as significant problems to be studied, who can practise science, and what constitutes good science. In “Mode 1,” knowledge is science, and knowledge producers are scientists.

Gibbons et al (1994) argue that a new form of knowledge production, “Mode 2,” is emerging alongside “Mode 1.” Science and scientists are no longer the only relevant terms; in “Mode 2” we refer to knowledge and practitioners. “Mode 2” is associated with a “wider temporary and heterogeneous set of practitioners, collaborating on a problem defined in a specific and localised context” (Gibbons et al). Knowledge production is not so tightly bounded by academia. It is widely diffused, and socially distributed in a global web of strategic alliances; collaborative agreements are supported through informal networks and good communication systems. Gibbons et al (1994) work led to the emergence of a new perspective and associated theories that go loosely under the heading of knowledge management. This perspective emphasises the importance of knowledge creation, transfer and use in competitive (and collaborative) organisations, and in particular on innovative processes, and associated aspects of technology policy. In analysing the trends towards new systems of knowledge production, a wide range of institutions are involved, thus giving shape to the institutional level of analysis and a radically different institutional configuration relevant to the new knowledge economy.

In “Mode 1” knowledge production is typically within a single discipline. In “Mode 2,” solving practical problems requires the integration of different skills and knowledge – it is transdisciplinary. [Note 1] It develops its own evolving framework for solving problems; it develops its own methods, theories, and practices; its knowledge is diffused through practitioner networks, rather than through professional journals and conferences; its knowledge production is closely and dynamically linked with a succession of problem contexts rather than with the building of disciplinary knowledge. It is heterogeneous: there are a wider range of practitioners (knowledge producers) linked together in temporary teams and communication networks, reconfiguring and combining specialist knowledge into useful knowledge.

The generation of knowledge in a context of application leads to greater sensitivity about its effects and impacts i.e. greater reflexivity on the part of practitioners and because of the diversity of players in the knowledge production site, greater calls for social accountability. Quality control in “Mode 1” is based on peer review (e.g. through academic journals) usually within disciplinary boundaries. “Mode2” quality control is broadly based and multi-dimensional, embracing social as well as technical criteria. The implications for government technology policy are to make traditional research institutions more permeable and collaborative; to support networks and alliances, to broker collaborations and to integrate educational, research and industrial/business polices.

Table 1 summarises the distinctive attributes of each mode.

Table 1

Attribute / Mode 1 / Mode 2
Problems set/solved / By academic community / In context of application
Motivation / Increased understanding / Practical goal – useful
Nature of knowledge / Disciplinary / Transdisciplinary
Homogeneity / Heterogeneity
Hierarchical/stable / Heterarchical [Note 2] / transient
Quality control / More socially accountable/reflexive

Activity 16

Part 1

Begin this activity by reading the following extract from Gibbons et al (1994).

One of the reasons why boundaries have become fuzzy and why institutionalisation is taking new forms is related to the diffusion of Mode 2 knowledge production. In all realms of culture and society, the new mode is developing alongside Mode 1. As more and more aspects of life in society are perceived to involve issues having a techno-scientific dimension science cannot be left to scientists alone. The methods and techniques of knowledge production in Mode 2 have become important ways to investigate societal issues in which many individuals and groups have some stake. Examples of this are numerous: environmental and agricultural matters, diet and health problems, computerised databanks and privacy. Interactions between science and technology, on the one hand, and social issues on the other, have intensified. The issues are essentially public ones, to be debated in hybrid for a in which, there is no entrance ticket in terms of expertise. In such a participatory science, the goal is no longer truth per se, but responsible public decision making based upon understanding of complex situations where many key uncertainties remain to be resolved. New intermediary institutions are required to support this collective learning process, to manage interchanges between groups of interested parties, to analyse them, and to prepare the ground for decisions and to monitor and evaluate their results. These new processes are not under the control of scientific specialists, though the latter remain essential. Now specialists have a double responsibility. They have to be responsive not only to the scientific community but also to public decision makers.

Consider the discussion of “Mode 2” in the Gibbons et al extract, and the discussion of “Mode 1 and 2” in the discussion before and bring your understanding to bear on the issue of xenotransplantation.

One answer to the global shortage of organs for transplant is xenotransplantation. This is where animal organs are used for transplantation into humans. Xenotransplantion, in particular of pig organs to humans, is one answer to the shortage of organs. Robert Sparrow, an academic at the Centre for Human Bioethics, Monash University, Australia, has investigated xenotransplantation. As he says,

Much current research is directed towards the development of genetically modified pigs, designed so that their organs are more compatible for transplant. This is done, for instance, by arranging for their cells to express surface proteins that fool the immune system into decreasing its hostile response to the foreign tissue. The hope is that it will eventually be possible to use this technique to overcome the currently insurmountable problems of tissue rejection following xenotransplantation. Indeed, researchers have already met with some success in this area – at least when it comes to pig to (non-human) primate transplantation’ (2009, pp.120-121).

Question 11

In what ways is xenotransplantation a “Mode 1” issue?

Answer

It is a “Mode 1” issue because it is at the cutting edge of science and scientists are trying to overcome the clinical obstacles to rejection of animal organs within humans.

End of answer

Question 12

In what ways is it a “Mode 2” issue?

Answer

It is a “Mode 2” issue because when scientists overcome tissue rejection and xenotransplantation becomes a viable clinical procedure in humans, there are ethical and religious issues that will need to be addressed by society before the practice can become a clinical reality.

End of answer

Question 13

Make a list of the many fora and/or stakeholders that would need to be consulted about xenotransplanatation under “Mode 2.”

Answer

The medical profession, patients groups, government, religious groups particularly Islamic and Jewish groups for whom the pig is an unclean animal, animal welfare groups, livestock farmers, ethics committees etc.

End of answer

1.3 Institutions and collective action

I now want to examine a different approach to the institutional level of analysis. It is based on a very influential book (reprinted 10 times!). It examines a research study in the important area of managing common pool resources (important for the sustainability of natural resources such as water, fisheries, etc). The author, Elinor Ostrom, develops an approach that is important for issues of sustainability, and also links with issues about developing policies (in this case institutions) that fit with local players and the local rule-based systems they use.

The Reading is based on several short extracts from the book. The reading serves two functions. The first is to talk to this unit’s focus on institutions. The second is to introduce you to the research process and research design issues. A research design describes the process through which research questions are explored that lead to results and conclusions. You will be exploring these issues in more depth in units 4 and 5.

It begins with a 30 year story of intellectual endeavour.

Activity 17

The following PDF contains extracts that you will be referring to over the course of this activity and the four that follow it.

PDF content unavailable

Read pages xiii-xvi. of Ostrom, Governing the Commons: The Evolution of Institutions for Collective Action.

What research design activities can you identify in this account? A research design is the approach developed to find answers to research questions. Don’t worry if you don’t understand some of the research terms mentioned. Many of them will be discussed in Units 4 and 5. For now it is more important to have an overview of how the research and the research process evolved.