A Multidimensional Model of Institutional Embeddedness:The Adoption of Unconventional Therapies by Conventional Hospitals

Abstract

This study examines how organizations embedded in an institutional field initiate change. Prior research guided by institutional perspectives has generally focused on a dichotomous measure that recognizes an organization’s central or peripheral position in a field as a simple proxy for institutional embeddedness. In contrast, we argue that institutional influence on change decisions varies according to two distinct dimensions: embeddedness scope, or how widely the organization draws its legitimacy on diverse sources, and embeddedness strength, or how strongly the organization coheres around the best representation of what it means to be a typical member of the field. We examine our arguments in a study of the formal incorporation of unconventional medicine into conventional hospitals in the US health care system. Unconventional medicine includes a group of treatment therapies whose underlying principles rest uneasily with those of dominant medicine. Our findings suggest that hospitals with higher embeddedness scope are more likely to adopt unconventional therapies. The adoption of unconventional therapies is less likely when embeddedness strength is higher. We close by discussing implications for research on agency and institutions,organizational innovation, and institutional change.