Institutional theory and Legitimacy - OS

Notes

•Organizations as Open Systems Organizations are open systems that continuously interact with their external environment. They consist of interconnected components, where changes in one part can influence the entire system. Understanding these interactions is more important than analyzing isolated parts, aligning with Kast and Rosenzweig’s (1972) application of General Systems Theory. •Organizations and External Environment The environment includes external forces affecting organizational functioning and resource acquisition. The domain refers to the specific part of the environment with which the organization interacts regularly, such as suppliers, customers, competitors, government agencies, and stakeholders. Key external factors include economic, demographic, technological, political, cultural, natural, and international influences. •Stakeholder Relations and Institutional Forces Organizations manage relationships with diverse stakeholders—suppliers, government, customers, competitors, unions, distributors, partners, and financial institutions. These relationships are shaped by institutional forces, which influence structure and behavior through social, cultural, and nor...