######## The Power of the Status Quo and Institutional Mimesis

Machiavelli offered one explanation. On his view, the status quo acquires many supporters and friends. Because individual suppliers are supported in the current activities, and they would prefer not to face the trouble and risk of change, there is little drive to experiment and change. Because current demanders have become accustomed to what they are currently getting, and either cannot imagine anything better, or worry that any change might be worse for them than what they are currently getting, there is no pressure or urgency on the suppliers to change. As a result, there is nothing that encourages or forces a change in what the system is producing, who is consuming it, or how the product of the system is being produced. This is surely part of the explanation for the surprising power of the status quo. But the second part of the explanation for the power of the status quo was provided by sociologists Paul Dimaggio and Walter Powell. (Dimaggio and Powell, 1983) They observed an important empirical regularity in the world: organizations operating in what they called a specific “organizational field” came to look a great deal like on another in many aspects of their structure, conduct and performance. This phenomenon – which they called “institutional mimesis” – seemed to be present in all substantive fields and all sectors – commercial, non-profit, and government. They argued convincingly that the surprising homogeneity among firms in any given organizational field was generated by not just by the social and political power of the status quo, but by the motivations and calculations of those managing the firms. They argued that even in commercial industries, the managers of producing firms and organizations were motivated less by the desire to produce results measured in financial terms, and more by a desire to be seen as “legitimate” in their industry and their society. The commitment to “legitimacy” was not driven by the intrinsic value of acting legitimately, but more by instrumental values that viewed legitimacy as a useful means to the end of survival and success. If they were legitimate in the eyes of society, commercial firms could more easily raise money, hire workers, and sell their products. (Note how this concept helps explain why some firms might be particularly interested in corporate social responsibility – as an idea that helps them maintain or expand their social legitimacy, and with that secure a more solid “license to operate” with some degree of respect and freedom from criticism and close oversight by the society at large. (Moir, 2001)) And the easiest way to maintain their legitimacy, of course, was to look as much like everyone else in their industry as they could. They might need some small ways of differentiating themselves in the products and services they offered to deal with competitive pressures (e.g a brand). But to no small degree, it was in their interests to mute these competitive pressures, and to try to look like everyone else. That made less work all around: they did not have to invent much that was new, didn’t have to run the operational and market risks of trying something new, didn’t have to think too much about problems that had not yet appeared. This theory was developed primarily to explain why it was that commercial firms in given industries tended to look the same along many different dimensions that described their activities: the products and services they produced (which defined the industries); the organizational structures and systems they used to produce these products and services, the materials and production processes they used to produce their products and services.