INSTITUTIONAL PRESSURES IN THE

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1 30/07/2012 VRIJE UNIVERSITEIT AMSTERDAM INSTITUTIONAL PRESSURES IN THE ORGANIZATIONAL FIELD OF NUCLEAR ENERGY Master Thesis Business Administration: Strategy & Organization Gerke van Kooten Master Thesis Business Administration: Strategy & Organization - Gerke van Kooten 1

2 Master Thesis Business Administration: Strategy & Organization - Gerke van Kooten 2

3 Table of Contents Preface Introduction... 6 Description of the topic... 6 Gap in literature and research problem... 7 Theoretical and practical relevance... 9 Brief outline of research Theoretical framework Literature review Institutional pressures Explanation of similarities and differences in prior studies Conceptual model Methods Research type Research strategy Data analysis Operational definition of Institutional pressures Categorization of events Reliability Results Case: The Fukushima crisis in Japan Results per issue: Gravity of the Fukushima disaster Results per issue: Responsibility for the disaster Results per issue: Go-no-go Japan Results per issue: Information withhold The effect of Fukushima on Europe and Russia Case: The Chernobyl disaster in the former Soviet Union Gravity of the disaster Responsibility Withholding information of the Soviet Union s government Go-no go Soviet Union The Chernobyl disaster in the rest of Europe Pressures over all Europe Regulative pressure Professional normative pressure Master Thesis Business Administration: Strategy & Organization - Gerke van Kooten 3

4 4.5 Conclusions Chernobyl disaster Comparison Differences in pressures and responses Similarities in pressures Chernobyl and Fukushima Conclusion Discussion Limitations and avenues for future research Limitations Future research References Master Thesis Business Administration: Strategy & Organization - Gerke van Kooten 4

5 Preface This thesis is the last task to be completed to finish the Master Business Administration study, specialization Strategy and Organization at the Free University of Amsterdam. I chose the subject institutional pressures in relation to nuclear energy, because this subject highly interests me. Because of the fact that fossil fuels become rarer these days, there has to be looked for alternatives. Nuclear energy has been seen as a sustainable energy source. Nevertheless, by the different accidents in the past 30 years the opinions on nuclear energy could be changing. I am curious about the position countries are now taking towards their nuclear policy. I would like to thank Dr. Klein Woolthuis for the time she spent guiding me. Finally I would like to thank Monique Monsma and Dineke van Voorthuijsen for the mental support during this process. Gerke van Kooten, August 2012 Master Thesis Business Administration: Strategy & Organization - Gerke van Kooten 5

6 1. Introduction Description of the topic The degree of strategic choice organizations have in response to changing environmental conditions is a concern for organizational researchers (Aldrich, 1979; Aldrich & Pfeffer, 1976; Child, 1972; Hannan & Freeman, 1977). The concern of the researchers is that organizations can act in different strategic responses to those environmental conditions. The degree and type of response depends on the type of event and type of organization. The theory behind the institutional perspective is that organizational structures and processes evolve over time and become legitimated inside the organization and the environment (Meyer & Rowan, 1977; Selznick, 1949, 1957; Zucker, 1987; Pfeffer, 1982). According to Covaleski and Dirsmith (1988) the main focus of the institutional perspective is that an organization's continued existence requires it to conform to social norms of acceptable behavior. The advantages of compliance to norms and necessities are concealed in the diversity of rewards like increased prestige, stability, legitimacy, social support, internal and external commitment, access to resources, attraction of personnel, fit into administrative categories, acceptance in professions, and invulnerability to questioning (DiMaggio, 1988; DiMaggio and Powell, 1983; Meyer and Rowan, 1977, 1983; Meyer and Scott, 1983; Meyer et al., 1983; Scott, 1983a; Zucker, 1988). More recent treatments of institutionalization have elaborated the nature and variety of these institutional processes (DiMaggio & Powell, 1983; Meyer & Rowan, 1977; Zucker, 1977, 1988) and the range of influences that these processes exert on structural characteristics of organizations (Meyer, Scott, & Deal, 1983; Meyer, Scott, & Strang, 1987; Scott, 1987a; Scott & Meyer, 1987; Singh, Tucker, & House, 1986) and organizational change (Hinings & Greenwood, 1988; Tolbert & Zucker, 1983). It is a fact that companies are not always able to influence proposed policies. Therefore, this interesting view on the pressures that can be exerted on nuclear energy. Disasters like in Chernobyl and Fukushima generate extensive environmental changes and create challenges for the continuation of the integrity of the organizational field. The view of society is changing, and the field needs to react in a way to the different pressures that arise. Every organization has to deal with its own objectives and challenges to the pressures and reacts in a different strategic response. The challenge for the nuclear energy firms is to maintain institutional integrity while taking into account new problems, new forces in the environment, new demands and expectations. A responsive institution avoids insularity without embracing opportunism (Selznick, 1992). The main problem facing institutional organization theory is how to deal with the behavior and institutional change of an organization. Strategic responses change according to Oliver Master Thesis Business Administration: Strategy & Organization - Gerke van Kooten 6

7 (1991). The different pressures from the environment and the objectives of an organization influence the different strategic responses of an organization. Because of the personal objectives of an organization, the response towards an accident in different timeframes could vary. Therefore, it is interesting to consider two similar events, with great environmental impact, and the influences they have on that specific organization field. In Chernobyl and Fukushima similar events occurred. Chernobyl and Fukushima are both rated 7 on the International Nuclear Event Scale (INES). This indicates an accident causing widespread contamination with serious health and environmental effects. Institutional theories draw attention to the impact of different pressures on organizational behavior and the organizational conformity to environmental constraints. Oliver (1991) developed a theoretical framework that adopts the supposition that organizational responsiveness to institutional pressures is a strategic choice. Oliver (1991) identified three sources of institutional pressure on norms or practices namely, functional, political, and social sources. DiMaggio and Powell (1983) proposed three forces which support institutionalization: coercive, mimetic and normative isomorphism. Isomorphism is a useful tool for understanding the politics and ceremony that pervade much modern organizational life (DiMaggio and Powell, 1983). Gap in literature and research problem Research and theory of scholars have developed important insights into the processes of institutionalization in organizational environments and their influences on organizational conformity to the environment (Oliver, 1991). A number of studies emphasize their need to legitimate change, either through some form of conformity to field-level cognitive interpretations (Glynn & Abzug, 2002). Institutional theorists have tended to limit their attention to the effects of the institutional environment on structural conformity and pressures and have tended to overlook the role of active agency and resistance in organization- environment relations (Covaleski & Dirsmith, 1988; DiMaggio, 1988; Perrow, 1985; Powell, 1985). In this article the relation between the organizational field of nuclear energy and the environment will been investigated. The environment, in this context, will be understood as all the different stakeholders in relation to nuclear energy within Europe. It is important to investigate this since from the institutional theory it can be assumed that organizations will react to the Fukushima event, because legitimacy is not certain anymore. The scientific community always considered the risks of nuclear energy as improbable. The conclusion of scholars was that nuclear plants are safe and the risk of a disaster was one in a million (Rothman, 1987). The disaster of Fukushima is now the third largest disaster of the last 30 years. The first was at 1979 in Harrisburg, United Stated; the second was at 1986 in Chernobyl, Ukraine and the recent one in Fukushima, Japan Master Thesis Business Administration: Strategy & Organization - Gerke van Kooten 7

8 in Through the events of last year, it can no longer be claimed that nuclear energy is the safest product for energy productions as Lovelock (2004) described in his article. At this moment, the legitimacy of nuclear energy firms is an international issue. Because the legitimacy of these firms is questioned, pressure is rising to deal with expectations and acceptance of the society. Nuclear firms need to find a way to respond with a strategy, that improves the feeling of safety and security. How they react to those pressures can be done within different thoughts. Firms could find it unnecessary to change their strategy and thereby avoiding those pressures, or they could find it too expensive to change, or they can act nonconformity to those pressures. Oliver (1991) developed five categories of strategic responses that the nuclear energy firms could have in answer to the different institutional pressures that are now occurring. In my investigation, I will clarify whether these nuclear energy firms are more active agents or opportunists. Can they resist the pressures or will they adopt a different strategy? Different theoretical studies as well as empirical studies describe how institutional environments contain choices (Baum and Oliver, 1992; Haveman, 1993; Meyer and Rowan, 1977; Tolbert and Zucker, 1983) and issues of institutional pressures and field changes occur (Lamin and Zaheer, 2005; Leblebici et al., 1991). On the other hand, few studies have given attention to organizations strategic choices, which are made to deal with factors such as institutional pressures (Milliken et al., 1998). Goodstein (1994) and Ingram and Simons (1995) have tested Oliver s categories of strategic responses, but reviewed only four of the five strategic responses, not taking into account manipulation. These studies revealed that the organizations in the sample used the four responses and that the different institutional pressures influenced selection of strategic responses. Etherington and Richardson (1994) applied all five of Oliver s strategies to university accounting educations. They argued that one could view the five strategies along a two-dimensional level of activity (active to passive) and pattern of resistance and accommodation (negative to positive). Glynn and Abzug (2002) devote explicit attention to the role of power, interests, and agency in determining how organizations interpret and respond to institutions. Due to the nuclear disasters in Chernobyl and Fukushima, there is now a change going on in the world of structures, standards and norms concerning nuclear energy. Organizational structures and processes evolve over time and become legitimated inside the organization and the environment (Meyer & Rowan, 1977; Selznick, 1949, 1957; Zucker, 1987; Pfeffer, 1982). These structures and processes are changed during the Chernobyl disaster, and also during the recent Fukushima disaster. The organizations continued existence requires conforming to social norms of acceptable behavior. Because of the change in the environment, the reduced sense of security by society and governments in reaction to those nuclear disasters, the norms about nuclear energy are changing. Against all the different pressures firms experience right Master Thesis Business Administration: Strategy & Organization - Gerke van Kooten 8

9 now, the process of conforming to the new norms can be answered with a different response. Initially, the contribution of this article would be that it gives explicit attention to the strategic behavior that the organizational field employs in direct response to the institutional processes that were affecting them. Therefore the question I want to study is: To what extend influences the Fukushima disaster the strategic behaviors of nuclear energy firms in Europe, in direct response to the institutional pressures in the aftermath of the disaster. And also, which different strategic responses of Oliver (1991) would be present. However, soon it became clear that the various pressures occurring, not necessarily affected the strategic position of firms. It appeared that the various authorities decided about the further and future policy on nuclear energy, nuclear firms were located in that decision to settle. The assumption was that nuclear energy firms would have more self-regulation, but it appears they are much more stated owned then it looked like. But nuclear plants are very different compared to other organizations, and therefore studying the strategic behavior was less interesting. Therefore, the focus shifted to the various pressures and the impact they would have on political decisions regarding the use of nuclear energy in a country. The assumption is that the pressures, which are conducted on nuclear policy during Fukushima and Chernobyl, have different outcomes. First of all, the focus on alternative energy sources is currently more topical than 30 years ago. The pressure about the exhaustion of fossil fuel that we experience today wasn t that important then. The reasons for using nuclear energy have therefore changed. Secondly, the information supply has made quite a change. At any time, information is available; everything seems closer because of globalization. So it seems the impact of a disaster in Fukushima, on the other side of the world, given the reactions and pressures, is much larger than a disaster, which happened 30 years ago around the corner'. That is why this investigation will give new insights to the extent of different pressures influencing political choices for the use of nuclear energy in Japan, Russia and Europe. By the use of others studies there will be a comparison of the difference in pressures that were there after the Chernobyl disaster. The assumption is that the social normative pressures after the Fukushima disaster are much higher than after the Chernobyl disaster. This is because of the fact that by the use of social media the world becomes much smaller. During the Chernobyl disaster the information about the negative effects of nuclear energy was also limited. Theoretical and practical relevance It is important to study this specific topic because it explains the extent of which pressures have influence on political choices in Japan, Russia and Europe. Through the attention this topic gets by the media after the current Fukushima disaster, countries could handle from different pressures and perspectives. The role of power, interests, and agency can determine how countries interpret and respond to pressures (Lawrence, Hardy, and Phillips, 2002). Master Thesis Business Administration: Strategy & Organization - Gerke van Kooten 9

10 The theoretical relevance for this research is that it first gives explicit attention to the role pressures have on the policies countries undertaken. Second, the level of resistance to those pressures will be examined. And last, what explains the difference of reaction from different levels to these pressures. The practical relevance of this research is first, to understand the relation between public policies and pressures against those (Cashore and Vertinsky, 2000). Second, the influence of disasters in general towards political policies will be examined. Third, it gives insights into which reactions of institutional pressures on Japanese, Russian and European level will be made. Master Thesis Business Administration: Strategy & Organization - Gerke van Kooten 10

11 Brief outline of research In the table below the outline of my research is visualized. By doing this research step-by-step my research questions will be answered. I will start with the theoretical explanation of institutional pressures (Oliver, 1992; DiMaggio and Powell, 1983; Scott, 1995). By making use of a cross case analysis, information will be gathered from articles in a newspaper and from previous studies concerning Chernobyl. I will try to give an understanding of how pressure influences political choices concerning nuclear energy. Then, explaining which differences there are in pressures between the Fukushima and Chernobyl case. Theory Methods Cases Case Fukushima Case Chernobyl Results Results Fukushima Results Chernobyl Comparison Fukushima & Chernobyl Conclusion & Discussion Master Thesis Business Administration: Strategy & Organization - Gerke van Kooten 11

12 2. Theoretical framework Literature review. This chapter will present an overview of theories in the field of institutionalism. Institutional pressures in the organizational field from different scholars will be outlined. Institutional theory draws attention to the impact of different pressures on organizational behavior and the organizational conformity to environmental constraints. The attention towards forces lies beyond the organizational boundary, in the realm of social processes (DiMaggio & Powell, 1991; Scott, 1995). A firms action is not seen as a choice among an unlimited array of possibilities determined by purely internal arrangements, but rather as a choice among a narrowly defined set of legitimate options determined by the group of actors composing the firm's organizational field (Scott, 1991). To conform the institutional standards and norms nuclear energy firms will search for a fit contained by their organizational field. An organizational field is "a community of organizations that partakes of a common meaning system and whose participants interact more frequently and fatefully with one another than with actors outside the field" (Scott, 1995). It may include constituents such as the government, critical exchange partners, sources of funding, professional and trade associations, special interest groups, and the general public; any actor that imposes a coercive, normative, or cognitive influence on a given focal organization or population of organizations (Scott, 1991). The field is formed around issues that become important to the interests and objectives of a specific collective of organizations. Issues define what the field is; making links that may not have previously been present. Organizations can make claims about being or not being part of the field, but their membership is defined through social interaction patterns. The overall issue is nuclear energy, so every organization that has a social interaction pattern to this subject, gives shape to a collective and individual experience. An institution is a complex organization that guides and sustains individual identity. They develop character by assigning responsibility, demanding accountability, and providing the standards in terms of which each person recognizes the excellence of their achievements (Bellah et al., 1991). The assumption of Kondra & Hinings (1998) is that every organization is located within fields. Although in reality not one organization is identical to another, let alone, all organizations in an organizational field, small organizational differences should yield similar outcomes. Because organizations are different, they should cope in different behavioral ways with changes in the environment. An institutional change can also concern the character and integrity of organizations, something that nuclear power companies can exert no influence to. Institutionalization as a process within organizations establishes a kind of character defined by the organizations commitments to values and principles (Selznick, 1957, 1992). Changes in the environment create unique challenges for the continuation of Master Thesis Business Administration: Strategy & Organization - Gerke van Kooten 12

13 organizational integrity. "The challenge is to maintain institutional integrity while taking into account new problems, new forces in the environment, new demands and expectations. A responsive institution avoids insularity without embracing opportunism" (Selznick, 1992). In order to remain legitimacy firms will copy each other procedures. Kondra and Hinings (1998) refer to institutional fit as the degree of compliance by an organization with the organizational form of structures, routines and systems prescribed by institutional norms. According to Hinings and Greenwood (1988) institutional norms deal with suitable domains of operation, principles of organizing, and criteria of evaluation. Structures and processes are institutionally derived and may even be individual to the organizational field. Conformity to norms is facilitated by normative, coercive, and mimetic processes (DiMaggio and Powell 1983) and compliance may be for realistic reasons or due to standard stasis (Oliver 1991). As a result, values and beliefs external to the organization play a significant role in determining organizational norms. It has been argued by DiMaggio and Powell (1983) that organizations within an organizational field may conform to these rules and requirements, not necessarily for reasons of efficiency, but rather for increasing their legitimacy, resources, and survival capabilities (Meyer and Rowan 1977). Organizations that conform to institutional norms become 'optimal', if not efficient, in the sense that they by conforming to those norms increase their survival capabilities (Baum and Oliver 1991). The organizational field of nuclear energy can react in different ways to institutional pressures, but will not initially have much to do than to form to certain pressures. By looking at each other management practices they can figure out which norms and standards they want to adhere to. Oliver (1992) stated that the strategic reaction of firms depends on different aspects. Organizational resistance may be easier when there are multiple constituents with potentially conflicting objectives (Powell, 1991). Conflicting institutional pressures and multiple constituents can create fragmentation within an institutional environment and reduce the degree of consensus among institutional actors (D'Aunno, Sutton, & Price, 1991; Jepperson, 1991; Oliver, 1991; Powell, 1991). In the enforcement mechanisms there is room for nuclear energy firms to put up their own understanding of compliance an implement that in a specific way. This can lead to the act that an organization is pretending to conform to external pressures but in reality dealing with a strategy, which is the best strategy for the internal functions (Scott, 2001). The investigation revealed that the most prominent constituent of the investigated countries was the government. The appropriate authorities of that country imposed each practice that nuclear firms took. The norms and standards a country accepted could be very different, even within Europe. Resistance towards this norms therefore not really exist, the government had the final word. This caused that the study shifted from an investigation of the strategic Master Thesis Business Administration: Strategy & Organization - Gerke van Kooten 13

14 responses regarding pressures towards an investigation of the influence of pressures on the nuclear policy of countries, rather than specific on strategy of nuclear plants. Institutional pressures Oliver (1992) developed a theoretical framework that adopts the supposition that organizational responsiveness towards institutional pressures is a strategic choice. The three sources of pressure on institutionalized norms or practices namely, functional, political, and social sources. Functional pressures for deinstitutionalization are those that occur from apparent problems in performance levels or the apparent utility associated with institutionalized practices. These pressures may be tied to broad environmental changes, such as intensified competition for resources (Oliver, 1992). The professional relations legitimated the change by referencing the existing values and practices of the profession, mainly around service to clients. Political pressures arise from displacements in the interests and primary power distributions that have supported and legitimate existing institutional arrangements (Oliver, 1992). These displacements occur in reaction to performance crises, environmental changes, and other factors that force organizations to question the legitimacy of a given practice. The third set of pressures Oliver (1992) noted, social pressures, are associated with differentiation of groups. Before the investigation it was already assumed that the organizational field of nuclear energy in this case mainly would be influenced by political pressure. This assumption because there are shifts taking place at the existing institutional arrangements, which mostly occur during environmental changes. In this case the environmental change is the reduced sense of security by governments and society in reaction to those disasters. Arguable is that the several accidents in the recent years with nuclear energy, raises the question about the legitimacy of nuclear energy firms, and is high on the agenda of politics and society. Now the nuclear energy firms can put up their own understanding of compliance and implement that in a specific way into the organization. Organizations will conform to institutionalized beliefs or practices when these are so externally validated and accepted by organizations that they are invisible to these organizations (DiMaggio, 1988), or when their "social fact" quality renders them the only conceivable, "obvious," or "natural" way to behave (Berger & Luckmann, 1967; Zucker, 1977, 1987; Oliver, 2001). Also for the survival of an organization it requires conforming to social norms of acceptable behavior. Institutional theory can explain why organizations sometimes adopt non-choice behavior in the context of taken-for-granted norms and beliefs, through the exercise of habit, convention, convenience, or social obligation, without any evidence that these behaviors serve the organizations own interests or contribute to organizational efficiency or control (Tolbert, 1985; Tolbert & Zucker, 1983; Zucker, 1983; Oliver, 1991). The benefits of compliance with institutional norms and requirements are Master Thesis Business Administration: Strategy & Organization - Gerke van Kooten 14

15 amongst others increased prestige, stability, legitimacy, social support, internal and external commitment, access to resources, attraction of personnel, fit into administrative categories, acceptance in professions, and invulnerability to questioning (DiMaggio, 1988; DiMaggio & Powell, 1983; Meyer & Rowan, 1977, 1983; Meyer & Scott, 1983; Meyer et al., 1983; Scott, 1983a; Zucker, 1988; Oliver, 1991). These benefits can clarify why organizations behave in ways that do not seem to increase efficiency or effectiveness. Institutional processes give a field the appearance of stability for a period of time. Differences of understanding and emphasis in the field may be temporarily resolved by socially negotiated compromises. Within an organizational field, the boundaries of industrial and professional communities, though implicitly contested, will thus show phases of "isomorphic" stability. During these phases, regulatory and interactive processes reproduce practices. Nevertheless, the appearance of stability is probably misleading: fields should be seen "not as static but evolving" (Hofftnan, 1999; Sahlin-Andersson, 1996). DiMaggio and Powell (1983) discussed isomorphism based on the assumption that organizations become increasingly similar through institutional forces. Their main focus is on the movement towards, and the preservation of, institutional norms through coercive, mimetic, and normative processes. Looking towards nuclear energy as an organizational field, there could be assumed that organizations are similar. The similarity in the process they have to deal with is the insecure position governments take towards their product, the development of nuclear energy. Isomorphism Different scholars had focused on processes in the phases of isomorphism. In many of these studies the conclusion is that, government agencies play a critical role in triggering and inaugurating institutional change in nonprofit and for-profit organizations, sometimes by exerting pressure through their control of funding, sometimes by the exercise of their power to regulate (Tolbert and Zucker, 1983; Friedland and Alford, 1991; Zucker, 1988, 1977, 1991; Tolbert and Zucker, 1983; Scott 1991, 1994, 1995). Also in the organization field of nuclear energy the exercise of the power of the government is highly present. Therefore, the difference in actions governments take is highly interesting. This is because other pressures could also influence the government s political choices. According to DiMaggio and Powell (1983) isomorphism is a useful tool for understanding the politics and ceremony that pervade much modern organizational life. They proposed three forces which driving institutionalization: coercive, mimetic and normative isomorphism. Coercive isomorphism results from two forces: formal and informal pressures from other organizations which an organization is depending on and by cultural expectations in the society within which organizations function. Coercive isomorphism is thus comparable to the resource dependence model; in which organizations are viewed as constrained by those on Master Thesis Business Administration: Strategy & Organization - Gerke van Kooten 15

16 whom they depend for resources (Pfeffer and Salancik, 1978). Such constraints could include pressures to bring an organization's structure in line with the demands of powerful actors. Such pressures may be felt as force, as persuasion, or as invitations to join in collusion. In some circumstances, organizational change is a direct response to political mandate and the problem of legitimacy, being subject to regulations, licensing, and accreditation. Mimetic isomorphism results from standard responses of uncertainty. Uncertainty is a powerful force that stimulates organizations to become more similar to one another because if a clear course of action is unavailable, the best response is to mimic a peer that they perceive to be successful. Organizations can adopt practices of successful actors to enhance their legitimacy. The wider the population of personnel employed by, or customers served by, an organization, the stronger the pressure felt by the organization to provide the programs and services offered by other organizations in the field. The challenge of mimetic behavior is that when an organization faces a problem with ambiguous causes or unclear solutions it adopts, another organizations practice may yield a viable solution with little expense (Cyert and March, 1963). Organizations tend to model themselves after similar organizations in their field that they perceive to be more legitimate or successful. In situations like the disasters in Chernobyl or Fukushima, organizations don t have any experience to deal with such circumstances, the chance to react mimetic is a probable reaction. Normative isomorphism is a result of professionalization. According to Larson (1977) and Collins (1979), professionalization is defined as the collective struggle of members of an occupation to define the conditions and methods of their work, to control the production of producers and to establish a cognitive base and legitimating for their occupational autonomy. This results in the fact that professions are a source of normative isomorphism because of their role as carriers of institutional norms, values and practices. Outside of the field professions try to obtain regulative control by influencing public laws and rules (Jespersen et al., 2001 in Louche, 2004). Pillars Institutional influences on organizational behavior can take several forms, but taken together they guide the interpretation of issues as they emerge and persist. Scott (1995) argued that institutions have three aspects, which he called: the regulative, the normative, and the cognitive pillar. The pillars show the difference between characteristics of institutional pressures. The regular pillar refers to the aspects of institutions, most commonly taken the form of regulations. Regulative processes guide the organizational action and perspectives by coercion or threat of legal sanctions. The pillar establishes control and imposes sanctions of the organization, which obey the rules. It is an actor s self-interest to comply with the rules. Master Thesis Business Administration: Strategy & Organization - Gerke van Kooten 16

17 Governments are the most probable actor to apply to coercive pressures to organizations. Legitimate organizations are those that operate in accordance with relevant legal requirements (Scott, 1995). The similarities with coercive isomorphism of DiMaggio and Powell s (1983) are obvious. In coercive isomorphism organizations adhere to formal and informal rules of those parties on which they are reliant for resources. The normative pillar refers to the aspects of institutions, generally taken the form of rules, standard operating procedures, industrial standards, and educational curricula into social life. The organizational actions and beliefs largely come from social obligation of professionalization. Organizations feel they need to comply to those rules because they are morally obligated to do so, not done out of self-interest (Scott, 1995). Normative rules are often regarded as impressive constraints on social behavior, but they also empower and enable social action. They provide rights as well as responsibilities, privileges as well as duties and licenses and tasks. There are some similarities with normative isomorphism of DiMaggio and Powell s (1983) but they focus only on normative pressures stemming from professionalization. Scott s (1995) normative pillar is more focusing on rules stemming from the society as a whole. Scott s works can be seen as a useful addition to the work of DiMaggio and Powell (1983) because society has much more input and influence on organizations decisions and performance now, than a decade ago. A link for this is probably caused by the growing use of social media; this could seriously influence the opinion of a large group of people. Because of the large reach of Internet the approach to information is easy accessible. In addition, the reliability and speed of information is much better guaranteed than, for example, during the Chernobyl case. The cognitive pillar refers to the aspects, which are culturally and socially supported and constructed rules. Rules are taken for granted and the behavior of compliance is inexplicable. Organizations will seek to possibilities to behave in a conservative manner, so that they do not really stand out. Organizations tend to imitate those organizations, which are regarded as superior or more successful. An indicator of mimetic processes is prevalence, the number of similar individuals or organizations exhibiting a given form or practice (Scott 1995). The focus of this pillar is that the behavior of organizations is unconscious and that it can change rapidly. The cognitive pillar of Scott (1995) is comparable to DiMaggio and Powell s mimetic isomorphism as organizations copy the behavior of more successful organizations. All three pillars are giving meaning to legitimacy, in different ways. The regulative pillar highlights it by conforming to legal requirements imposed by different institutions. The normative pillar is based on a moral dimension to assess legitimacy. The cognitive pillar adopts an existing frame and so become legitimated. Organizations could handle with different pillars, but they would seem unreliable for the outside, and that could bring harm to their legitimated position (Fligstein 1991). Master Thesis Business Administration: Strategy & Organization - Gerke van Kooten 17

18 Table of institutional pressures By some scholars there is some overlap in description of pressures. To categorize them, it s become a useful tool to measure the pressures that are exerted after the Fukushima disaster in the organizational field of nuclear energy. Also in the Chernobyl case it is useful to categorize information in the termed pressures. The categories from previous work are termed as: regulative pressure, mimetic pressure, social normative pressure, and professional normative pressure. Regulative pressure Regulative pressures are formal pressures, rules and laws, and informal pressures, cultural expectations from other organizations, which an organization is depending on in the organizational field. The organization is viewed as constrained by those on whom they depend for resources (Pfeffer and Salancik, 1978). Such constraints include pressures to bring an organization's structure in line with the demands of powerful actors. This pressure may be felt as force, as persuasion, or as invitations to join in collusion. Mimetic pressure Mimetic pressure is the result of response of uncertainty. Uncertainty is a force that stimulates organizations to become more similar to one another. Because if a clear course of action is unavailable, the best response is to mimic a peer that they perceive to be successful. Organizations can adopt practices of successful actors to enhance their legitimacy (Cyert and March, 1963). Social normative pressure Social normative pressure focuses on the rules coming from the society as a whole (Scott, 1995). It focuses on rules, standard operating procedures, industrial standards, and educational curricula into social life. Organizations feel they need to comply to those rules because they are morally obligated to do so, not done out of self-interest (Scott, 1995). Normative rules are often regarded as impressive constraints on social behavior, but they also empower and enable social actions. They provide rights as well as responsibilities, privileges as well as duties and licenses as well as tasks. Professional normative pressure Professional normative pressure is a result of professionalization. Professionalization is defined as the collective struggle of members of an occupation to define the conditions and methods of their work, to control the production of producers and to establish a cognitive base and legitimating for their occupational autonomy (Larson, 1977; Collins 1979). Professions try to have a role as carrier of institutional norms, values and practices. Outside of the field Master Thesis Business Administration: Strategy & Organization - Gerke van Kooten 18

19 professions try to obtain regulative control by influencing public laws and rules (Jespersen et al., 2001 in Louche, 2004). Pressure Regulative Mimetic Professional normative Description Rules, regulations, laws Imitation of other Industrial standards, organizations procedures, understandings and expectations Sources Governments, legislative and judicial authorities, administrative agencies, regulators Vehicle for spreading Written documents, legislation, rules of practice Basis for compliance Licenses and credentials, legal enforcement, legal sanction Similar Professions, organizations, educational system more successful organizations, more legitimate organizations Public outings, performance rankings Avoid uncertainty, maintain stability, increase legitimacy, not standing out Professional networks, education, relational networks, trade associations Public opinion, social obligation, moral obligation, taken for granted Social normative Norms, Public opinion, rationalized myths, socially constructed rules, collective understandings Society, public opinion, social prestige Cultural and societal expectations, relational networks, belief systems, cultural frames Public opinion, social obligation, moral obligation, taken for granted Table 1: Overview of institutional pressures Master Thesis Business Administration: Strategy & Organization - Gerke van Kooten 19

20 Research question The research question I would like to investigate is: 1. To what extent do regulative, mimetic, social normative and professional normative pressures influence political choices for the use of nuclear energy in Japan, Russia and Europe? 2. What are the differences in pressures between Fukushima and Chernobyl, and how can this be explained? Explanation of similarities and differences in prior studies Similarities with prior studies are that scholars have shown that institutional influences on organizational behavior can take several forms, for example regulative processes guide the organizational action and perspectives by coercion or threat of legal sanctions (DiMaggio and Powell s, 1983; Scott, 1995). In this article the influences of organization-environmental relations will be investigated, focusing on political choices of different countries. It is also interesting to see how pressures differ to each other, and how the different pressures influence legal policy of countries. The increasing influence of society is interesting to highlight, looking at the impact they have on the political actions that are undertaken as Scott (1995) describes in his normative pillar. A difference with prior studies is the fact that the recent disaster in Fukushima is new in relation to an investigation towards the effect of institutional pressures on political choices. Also a comparison of the influence of the Chernobyl disaster in relation to the Fukushima disaster has never been investigated on a strategic level in relation to institutional pressures. Master Thesis Business Administration: Strategy & Organization - Gerke van Kooten 20

21 Conceptual model This model is a verbal and figural representation of concepts, which will be investigated in this research. By doing this research the extent of the influence of the Chernobyl and Fukushima disaster in relation to institutional pressures on political choices of EU, Japan and Russia will be investigated. The institutional pressures can be influenced by sources from the organizational field. Organizational field of nuclear energy producers Political choices on nuclear policy: EU - Russia- Japan + / - Chernobyl disaster + / - + / - Institutional pressures Fukushima disaster The above conceptual model shows the influence and reaction of institutional pressures towards organizations into the field of nuclear energy and how governments can cope with it in their policymaking. The following propositions are created to study the influences of that relation. The assumption is that the organizational field of nuclear energy firms is mostly influenced by the regulative pressure, and that influences on policymaking of countries come from the government itself, rather than being influenced by other pressures. Propositions Social normative pressure is much more present then professional normative by the impact of social media after the Fukushima disaster in relation to Chernobyl. The norms in relation to nuclear energy are changed after the disasters are changed and consequently the legitimacy of the field. Pressures at Chernobyl mainly come from the governments because society knows less about nuclear energy at that time. Master Thesis Business Administration: Strategy & Organization - Gerke van Kooten 21

22 3. Methods Research type The topic and phenomena investigated in this paper, will give new insights on institutional pressures on the policies and development of nuclear energy in Europe, Russia and Japan after the Fukushima disaster. Results from studies about institutional pressures after the Chernobyl accident will be gathered and categorized by the different pressures. These outcomes will be compared with the Fukushima case. Studies in neo-institutionalism can be divided in two categories (Mohr, 1982; Scott & Meyer, 1994; Tolbert et al., 1996). The categories are quantitative and qualitative analytic methods (Saunders, Lewis and Thornhill, 2009). The first category uses quantitative methods. This type of research is useful for an objective approach and represents the position of social entities concerned with their existence in reality. A quantitative data analysis is mainly used to do large-scale research in which the influence of the specific context of individual cases is not included. The second category uses qualitative methods. This type of research method is useful for a subjective approach and interpretation of the content of raw text data by coding and identifying themes based on valid inference and interpretation (Hsieh & Shannon, 2005). A qualitative data analysis is mainly used to study a small number of cases in-depth. Hereby, the local context and the interpretation of that context play a central role. This process uses deductive reasoning, grounding the examination of topics and themes, as well as the inferences drawn from them in the data by which themes and categories emerge from the data by carefully examining the interviews. Studies using qualitative techniques in historical case studies to investigate field formation, the evolution of institutional forms, and the adoption of organizational practices across a broad period of time (Brint & Karabel, 1991; DiMaggio, 1995; Fligstein, 1991; Halliday, Granfors, & Powell, 1993; Holm, 1995; Suchman, 1995; Tolbert et al., 1983). They provide important insights into the sequence of actions and events that drive field formation (Louche, 2004). The focus in qualitative research will lay on the range of the meanings in the phenomenon rather on the statistical implication and significance of the text. The methodology for this study will be a qualitative and empirical research characterized by its exploratory nature. This empirical approach, which is methodological, controlled, is an analysis of texts within their context of communication (Mayring, 2000). The focus will be on a multiple case study. By using multiple sources of evidence in its real life context, the boundaries between the phenomenon being studied and the context within it is being studies are not clearly evident. This is because the context is limited by the variables (keywords) for which data can be collected. The interpretation of local context is of great importance as this Master Thesis Business Administration: Strategy & Organization - Gerke van Kooten 22

23 study, which aims to research causal relations in a local context. This study is explorative in nature since it is aimed at finding out what is happening; to seek new insights; to ask questions and to asses phenomena in a new light after the Fukushima disaster (Robson, 2002 in Saunders, Lewis and Thornhill, 2009). It is aimed at gaining new insights that may lead to new propositions within institutional theory. The second case, the disaster in Chernobyl, is build from studies of different scholars. These studies are written for another purpose. These papers have been analyzed and categorized by the institutional pressures, which have been outlined in Table 1. Research strategy A research strategy is a general plan of how the researcher will go about answering the research question (Saunders, Lewis and Thornhill, 2009). It leads to specific methods of collecting and analyzing empirical data (Louche, 2004). It comprises skills, assumptions and practices that researchers use to translate their paradigms of interpretation into the empirical part of their research (Denzin et al., 1998). In this study the research strategy is a case study. Robson (2002) describe a case study as the empirical investigation of a particular contemporary phenomenon with its real-life context, using multiple sources of evidence. Thomas (2011) offers the following definition of case study: case studies are analyses of persons, events, decisions, periods, projects, policies, institutions, or other systems that are studied holistically by one or more methods. The case, which is the subject of the inquiry, will be an instance of a class of phenomena to provide an analytical frame from an object within which the study is conducted and which the case illuminates and explicates. In this research the case study is used as research strategy because it offers the possibility to gain a rich understanding in a contemporary phenomenon within its real life context and because a case study is particularly useful when performing explorative research (Morris and Wood, 1991). A case study is very useful by gaining understanding of the context of the research and the processes being enacted (Morris and Wood, 1991). It can be used to explore and understand social processes within the organizational field. According to Saunders, Lewis and Thornhill (2009) case studies are particularly suitable for exploratory and explanatory research because a case study has the ability to generate answers to the question why? as well as to what? and how? questions. Another characteristic of the case study is that, according to Yin (1994), it is the preferred research strategy if contemporary rather than historical events are subject of the research. Research setting The subject of this case study is the effect of the different institutional pressures in Europe, Russia and Japan on their political choices after the Fukushima nuclear disaster in Japan, the Master Thesis Business Administration: Strategy & Organization - Gerke van Kooten 23