2. Institutional entrepreneurship

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1 INSTITUTIONAL ENTREPRENEURSHIP & INNOVATION IN MUNICIPAL SERVICE DELIVERY: TOWARDS CRAFTING A HARMONIOUS PROFESSIONAL RELATIONSHIP BETWEEN EXECUTIVE MAYORAL COMMITTEES AND EXECUTIVE MANAGEMENT by DR PRAVINE NAIDOO B.PROC (UDW) MBA (Netherlands) DBA (UKZN) Attorney of the High Court of South Africa Executive Director: Strategic Services Drakenstein Municipality, Paarl, Western Cape 1. INTRODUCTION The purpose of this paper is to share theoretical insights into the transformation of local government, the promotion of developmental local government, but more importantly the individuals / actors, namely senior elected officials (executive mayoral committee members) and senior appointed officials ( Section 57 managers) in ensuring the service delivery is significantly enhanced so as to ensure that the constitutional mandate of local government in South Africa is achieved. Structuration Theory, Institutional Theory and the Institutional Entrepreneurship theoretical construct is discussed with a view to sensitizing senior politicians and managers as to the onerous responsibilities entrusted upon them and to provide a sound theoretical and academic basis for their leadership and management initiatives within their respective municipalities. According to Barley and Tolbert (1997: 116), structuration theory and institutional theory provide complementary insights. Both share the premise that action is largely organised by institutions, widely held definitions of the behaviour and relationships appropriate for a set of actors. Both acknowledge that institutions are created, maintained and changed through action. Structuration theory, however, explicitly focuses on the dynamics by which institutions are reproduced and altered, an issue that has been largely neglected by institutional theorists. In order to clarify the connection between institutional theory and structuration theory, institutions can be seen as manifestations of mutually reinforcing signification (representations) and legitimating structures (values and norms). Institutions are reflected and sustained over time by the allocation and accumulation of resources associated with their enactment by agents. 1

2 Symbolic representations and/or values not associated with resource acquisition and distribution are eventually abandoned. Resources unfocused by rules will eventually dissipate. For institutional practices to exist at the organisational field level and be implemented at the same level there must be an ongoing, reproductive interaction of rules and resources. The two are mutually reinforcing. If one element is lost over time, de-institutionalisation takes place. This ongoing, reproductive interaction is the consequence of reflexive, knowledgeable human action. Thus, structuration theory provides a theoretically grounded explanation of the primary dynamics of institutionalisation, appropriation and de -institutionalisation in institutional theory. In other words, in general terms it specifies the hows of the institutionalisation process (Dillard et al. 2004: 521). 2. Institutional entrepreneurship According to Baez and Abolafia (2002: 525) interest in the entrepreneurial role of public administrators has a long history. It is linked recently to the popular government reinvention literature about how change and innovation enter public organisations (Osborne and Gaebler, 1992). Entrepreneurs are known for their skill as innovators, for their keen understanding of the dynamics of organisational change, and for their creativity in advocating solutions to policy problems (Brower and Abolafia, 1996: 287; Kingdon 1984; Schneider et al. 1995). Public administration theorists cite Barnard, Mintzberg, Argyris, Schumpeter, Selznick (Lewis, 1980: 260) and Kingdon (Doig and Hargrove, 1987: 22) as the sources for their conceptualisations of leaders as public entrepreneurs. Various conceptualisations of entrepreneurship have been applied to the domain of the public sector. Teske and Schneider (1994: 331) and Schneider et al. (1995) distinguish between political entrepreneurs and bureaucratic entrepreneurs and thereby emphasise the difference in organisational settings of politicians versus public servants. Roberts and King (1996) explore the relationship of policy entrepreneurs to innovation in public administration. Brower and Abolafia (1996: 287) add that procedural entrepreneurs may influence administrative work from various organisational levels. In the public policy literature, Behn (1998: 209), Grady and Tax (1996: 05), Kobrak (1996: 205), Moe and Gilmour (1995: 135) and Terry (1998: 194) are among those who add to that literature s historical focus on the extent and appropriateness of entrepreneurship in public administration. 2.1 The Paradox of Embedded Agency and Institutional Entrepreneurship Eisenstadt (1980: 840) was the first to use the notion of institution al entrepreneurship to characterise actors who serve as catalysts for structural change and take the lead in being the impetus for, and giving direction to, change (Colomy and Rhoades, 1994: 554). DiMaggio (1988), building on Eisenstadt (1980), introduced the notion of institutional entrepreneurship in institutional analysis to characterise organised 2

3 actors with sufficient resources to contribute to the genesis of new institutions in which they see an opportunity to realise interest that they value highly (Leca et al. 2008: 03). Meyerson and Tompkins (1997: 307) state that the term institutional entrepreneur has been used to describe individual and collective actors who deliberately work to transform institutional arrangements to advance a set of interests. Institutional entrepreneurs are the agents that create new and modify old institutions because they have access to resources that support their self-interests (DiMaggio, 1988: 03). By definition, institutional entrepreneurs can play a critical role in perceiving institutional differentiation, fragmentation, and contradiction by virtue of the different social locations they may occupy in the inter -institutional system and in taking advantage of the opportunities it presents for institutional change (Thor nton 2004). Fligstein (1997: 397), for example, describes how entrepreneurs perceive and exploit contradictions in institutional logics to further their self-interest. There are several mechanisms that institutional entrepreneurs use to manipulate cultur al symbols and practices, for example story telling (Zilber, 2006: 281), rhetorical strategies (Suddaby and Greenwood, 2005: 35; Jones and Livne-Tarandach, 2007: 1075), and toolkit approaches (Swideler, 1986: 273; Boltanski and Thevenot 1991). Suddaby and Greenwood (2005) showed, for example, in their study of organisational forms in the accounting industry, how institutional entrepreneurs used rhetorical strategies to reinterpret and manipulate prevailing symbols and practices. Rhetorical strategies or institutional vocabularies were used by entrepreneurs to affirm or discredit the dominant institutional logic which defined the legitimacy of organisational forms. To discredit an institutional logic and bring about institutional change, entrepreneurs exposed the contradictions or ameliorated the contradictions by associating them with broader cultural analogies (Douglas 1986; Strang and Meyer, 1994: 100). Within institutional theory, this broader structure-agency debate is often referred to as the paradox of embedded agency (DiMaggio and Powell 1991; Friedland and Alford 1991; Sewell 1992; Holm 1995; Seo and Creed 2002; Meyerson and Tompkins 2007; Leca et al. 2008). The theoretical puzzle is as follows: if actors are embedded in an institutional field and subject to regulative, normative and cognitive processes that structure their cognitions, define their interests and produce their identities (Friedland and Alford 1991), how are they able to envision new practices and then subsequently get others t o adopt them? Dominant actors in a given field may have the power to force change but often lack the motivation; while peripheral players may have the incentive to create and champion new practices, but often lack the power to change institutions (Garud et al. 2007: 09). Garud et al. (2007: 09) state that one answer to this puzzle lies in conceptualising agency as being distributed within structures that actors themselves have created (Garud and Karnoe, 2003: 277). 3

4 Consequently, embedding structures do not simply generate constraints on agency but, instead, provide a platform for the unfolding of entrepreneurial activities. According to this view, actors are knowledgeable agents with a capacity to reflect and act in ways other than those prescribed by taken-for-granted social rules and technological artefacts (Schutz 1973; Blumer 1969; Giddens 1984; Garud and Karnoe, 2003: 277; Mutch, 2007: 1123). Institutional entrepreneurship not only involves the capacity to imagine alternative possibilities, it also requires the ability to contextualise past habits and future projects within the contingencies of the moment if existing institutions are to be transformed (Emirbayer and Mische, 1998: 963). To qualify as institutional entrepreneurs, individuals must break with existing rules, practices or logics they are championing (Battilana, 2006: 653). Thus strategies must be developed (Lawrence, 1999: 161) to embed change in fields populated by diverse organisations, many of whom are invested in, committ ed to, and advantaged by existing structural arrangements. It is not surprising, therefore, that institutional entrepreneurship is viewed as an intensely political process (Fligstein, 1997: 397 ; Seo and Creed, 2002: 222). 2.2 The process of institutional entrepreneurship The first challenge institutional entrepreneurs face is to impose the institutional change they promote, as existing institutional arrangements that favour the maintenance of established privileges are likely to be defended by those who benefit from the current situation (DiMaggio, 1988: 03; Levy and Scully, 2007: 971). Institutional entrepreneurs can sometimes impose institutional change on dissenting actors without having to win them over (Dorado, 2005: 383). Dorado (2005: 389) takes the example of Rockfeller as developed by Chernov (1998) to illustrate this point. As he controlled most of the oil refineries in the USA, John D. Rockefeller could change the way the oil market worked by controlling prices while other actors could not oppose this change. However, such situations are rare as dominant players who benefit from an existing institution are usually keener to support its maintenance than to promote changes to it (DiMaggio, 1988: 03). Because they can seldom change institutions alone, institutional entrepreneurs must typically mobilise allies (Boxenbaum and Battilana, 2005: 01; Fligstein, 1997: 397; Greenwood et al. 2002: 58); develop alliances and cooperation (Fligstein, 2001: 261; Lawrence et al. 2002: 281; Rao, 1998: 912). In particular they must mobilise key constituents such as highly embedded agents (Lawrence et al. 2002), professionals and experts (Hwang and Powell, 2005: 179). Hence, institutional entrepreneurship is a complex political and cultural process (DiMaggio, 1988: 03; Fligstein, 1997: 397; Rao, 1998: 912) where institutional entrepreneurs must mobilise diverse social skills depending on the kind of institutional project they tend to impose (Perkmann and Spicer, 2007: 23). Researchers have investigated how institutional 4

5 entrepreneurs develop discursive strategies and use resources to develop those strategies. More recently, they have begun to investigate how institutional entrepreneurs design specific institutional arrangements to support their projects and stabilise their implementation (Leca et al. 2008: 11) Using discursive strategies According to Leca et al. (2008: 12) the discursive dimension is crucial in the literature on the institutional entrepreneurship process (Creed et al. 2002; de Holan and Philips 2002; Dorado 2005; Fligstein 1997, 2001; Maguire et al. 2004; Rao 1998). Some researchers even state that institutional entrepreneurship is mainly a discursive strategy whereby institutional entrepreneurs generate discourse and texts aim ed at affecting the processes of social constructions that underlie institutions (Suddaby and Greenwood 2005; Munir and Philips 2005; Philips et al. 2004). Rao et al. (2000: 244) state that: institutional entrepreneurs can mobilise legitimacy, finances and personnel only when they are able to frame the grievances and interests of aggrieved constituencies, diagnose causes, assign blames, provide solutions and enable collective attribution processes. This implies to theorise the institutional project in such a way that it will resonate with the interests and values and problems of potential allies (Boxenbaum and Battilana, 2005: 01; Fligstein, 2001(b):105; Suddaby and Greenwood, 2005: 35). The role of discursive strategies and resources in political and cultural struggles that are likely to develop around institutional change has attracted much attention. But these political and cultural struggles always account for institution building in flux, that is, institutions are constantly designed and redesigned and changed due to the interactions of the different actors involved in the process (Leca et al. 2008: 17). 2.3 Collective institutional entrepreneurship To account for institutional change, most studies focus on institutional entrepreneurship (DiMaggio, 1988: 03), where purposeful actors leverage their social and political skills and spearhead change (Fligstein, 1997: 397; Garud et al. 2002: 196). With only a few key entrepreneurs, agency or purposeful action is relatively concentrated with a high degree of coordination between the actors (Dorado, 2005: 383). However, many institutional changes are complex social processes involving highly diverse interests and perspectives. 5

6 Collective institutional entrepreneurship involves collaborative leadership (Chrislip and Larson, 1994), a form of leadership enacted not just by guiding actors but also through other media such as structures and processes embedded within a collaboration (Huxham and Vangen, 2000: 1159). It also requires institutional work or practices that go well beyond those of institutional entrepreneurs (Lawrence and Suddaby, 2006: 215) which include the purposive actions of multiple individuals and organisations, entrepreneurial as well as supportive, aimed at creating, maintaining and disrupting institutions. Since collective interests do not always produce collective action (Heckathorn, 1996: 250), it becomes necessary, however, to not only bring collective resources to bear on the problem (Westley and Vredenburg, 1997: 381) but also to provide motivations to individual participants whose interests may lie in not cooperating. In other words, these situations present a collective action dilemma (Oliver, 1993: 271). Since most research endeavours have focused on either institutional change with concentrated agency or on dispersed agency without the need to coordinate, institutional entrepreneurship that depends on collaboration among numerous dispersed agents is a gap that needs s cholarly attention (Dorado, 2005: 385). This research study would attempt to address this gap. Change in collective action domains constitutes a double paradox. Apart from having to reconcile the agency-structure paradox or the ability of actors to spea rhead change despite constraints (Seo and Creed, 2002: 222), actors need to resolve a collective action problem in which individual interests may work against cooperation and promote collective inaction. Different causes underlie collective inaction. First, individuals may want to free-ride on the contribution of others (Olson, 1965). Second, a start-up problem may occur where action get held up because all actors are waiting for others to take the lead (Marwell and Oliver, 1993). Third, there may be actor apathy, where actors abstain from engaging in collective action because they feel their contribution to the problem is insignificant (Fireman and Gamson, 1979). All these factors make non-participation and inaction rather than cooperation the likely outcome (Heckathorn, 1996: 250) Manipulating power configuration Manipulating power configuration means skilfully reconfiguring power in a particular domain to achieve a power concentration that reduces the diversity of opinion and spurs collective institutional entrepreneurship. While old institutionalists highlighted how power struggles and conflicts of interests create change (Hirsch and Lounsbury, 1997: 406), neo-institutionalists, especially those focusing on nonisomorphic institutional change, also consider power and control of resources to be a central aspect of collaboration and change (Greenwood and Hinnings, 1996: 1052; Clegg et al. 2006). 6

7 Substantial power differences among participants in volatile domains can inhibit the formation of collaborative relationships (Hardy and Phillips, 1998: 217), although the dominance of some over others can also provide the stage for collaboration (Huxham and Vangen 2005). Power differences between actors can be used by the more powerful to dictate the rules of the game and induce cooperation; in the absence of a powerful storekeeper or hegemon, others (free-riders) would be unwilling to mind the store and regime effectiveness would erode (Krasner 1983) Creating common ground Creating common ground represents a repertoire of bridging tactics that socially skilled actors use to induce cooperation from both allies and adversaries (Fligstein, 1997: 397). These include: framing (Benford and Snow, 2000: 611), which induces cooperation by appealing to mutual identity and interests (Ansell, 1998: 359); setting an agenda which others believe to be in their own interests (Lukes 1974); expressing tangible and task-oriented, rather than elusive goals (Huxham and Vangen 2005); and building cognitive legitimating by spreading public knowledge about an issue to make it more familiar and amenable to acceptance (Aldrich and Fiol, 1994: 645). Actors should operate in harmony with the consensual norms and values of the society into which they are socialized. Instead of leveraging incentives or power, actors create common ground and coincident interpretations by promoting overriding values that all accept (Levy and Egan, 2003: 803), heightening actor awareness of their mutual interdependence and paving the way for a collaborative strategy of engagement Mobilising bandwagons Mobilising bandwagons refers to actors enrolling large numbers of other participants to generate diffusion processes in favour of the collective issue at stake (Abrahamson and Rosenkopf, 1993: 487; Hardy and Phillips, 1998: 217). The momentum creates isomorphic pressures for a critical mass of adoption (cooperation) and allows for the emergence of new institutions. Indeed, collective action can only be successful when institutional entrepreneurs are able to enrol a large majority of actors through the process of alliance building by including like-minded actors (Callon 1991) Devising appropriate incentive structure s Devising appropriate incentive structures consists of designing institutional arrangements that encourage cooperation by reducing transaction costs a common argument in institutional economics (North 1990). Wider support may also be garnered by creating appropriate incentive structures and raising awareness 7

8 of non-compliance costs (Barret 2003). As neo-institutionalists acknowledge, such structures are typically conceived or stimulated by calculating and interest-seeking institutional entrepreneurs (Greenwood and Suddaby, 2006: 1052) who enforce cooperation through both material and non -material incentives (Knoke, 1988: 311). The issue under contention can be made self-enforcing (Barret 2003) or be turned from a public good, accessible to all, into a club good with exclusive benefits for club members that commit themselves to the institutional arrangements (Neum ayer, 2001: 122). Actors can also build and sustain cooperation by reducing the costs associated with negotiating, monitoring, and enforcing agreements (Keohane 1984). Forums can be created that provide information about the relative distribution of gain from compliance and which progressively build trust among participants. Another instrument is issue link age (Sebenius, 1983: 281), where different problems wit h positive interdependence are clustered to encourage and ensure cooperation (Levy et al. 1993; Milner, 1992: 466). Since institutions do not exist in a societal vacuum, the repercussions of agreement violation may extend beyond the focal issue (Axelrod 1984) as in the attempts by OPEC members to link oil discussions with political issues. Issue linkage widens the scope for mutually beneficial exchanges, thus opening up more possible solutions for deadlocked problems and facilitating effective retaliation against defectors or cheaters. Furthermore, it creates leverage by gaining actors commitment on low-priority issues and then getting them to cooperate on high-priority issues (Susskind 1994). A related mechanism is side payments (e.g. offering technological assistance for non -proliferation agreements). Creating effective incentives can thus be a powerful driver of collective institutional entrepreneurship Applying ethical guidelines Applying ethical guidelines means motivating actors to cooperate by invoking ethical factors such as sense of fairness, equity and altruism. While institutional theory typically explains behaviour as influenced by social norms, in many instances people act not because of normative conformity (Knoke and Wright-Isak, 1982: 209) but because they perceive the act to be the right thing to do (Wendt, 2 001: 1019). Such moral legitimacy reflects a positive normative evaluation of activities based on existing value systems (Aldrich and Fiol, 1994: 645) and is sociotropic : it rests not on judgments about whether a given activity benefits the evaluator, but rather on judgments about whether the activity effectively promotes societal welfare (Suchman, 1995: 579) Using implementation guidelines Using implementation guidelines refers to employing specific instruments to implement joint agreements. While institutional theory acknowledges that collective change can only be sustained if effectively 8

9 implemented (Greenwood et al. 2002: 58), it does not offer specific insights into implementation mechanisms. Implementation capacity can be built through information transfer, research grants, technical assistance, training and management expertise to resource-constrained actors. Furthermore, periodic and timely assessments of the progress through review mechanisms (Young and Demko 1997) and non-compliance procedures (Wettestad 1999) ensure continued cooperation. 3. CONCLUSION All the above drivers can be leveraged in acts of collective institutional entrepreneurship by senior politicians in executive mayoral committees and senior managers in municipalities to engender and sustain cooperation in collective action domains. Institutional entrepreneurs are located within the regulatory and normative frameworks of the institutions, which frameworks have already been decided upon. Their role is to implement the strategy of the municipality, which has already being formulated by other actors. 9

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