This study develops a symbolic management perspective on strategic change to predict and test the antecedents and consequences of how firms frame strategic change. Using data from a sample of contemporary German corporations, we find support for our predictions that firms (1) use specific framing language that fits better with their divergent stakeholder preferences, (2) use language that decouples espousal and actual implementation of strategic change, and (3) realize positive market responses to institutionally appropriate frames of change. The topic of strategic change, defined as an alter-ation in an organization’s alignment with its exter-nal environment (Rajagopalan & Spreitzer, 1996; Van de Ven & Poole, 1995), has been at the center of a growing literature in both the strategy and organ-izational theory fields (e.g., Fombrun, 1993; Gins-berg, 1988; Hofer & Schendel, 1978; Johnson, 1987; Zajac & Shortell, 1989; for a review, see Rajago-palan & Spreitzer, 1997). An important develop-ment in this literature is that strategic change is increasingly seen as not only a shift in structures and processes, but also as a cognitive organization-

T his paper argues that research in organization theory has seen a shift in orientation from paradigm-driven work to problem-driven work since the late 1980s. A number of paradigms for the study of organizations were elaborated during the mid-1970s, including transaction cost economics, resource dependence theory, organizational ecology, new institutional theory, and agency theory in financial economics. These approaches reflected the dominant trends of the large corporations of their time: increasing concentration, diversification, and bureaucratization. However, subsequent shifts in organizational boundaries, the increased use of alliances and network forms, and the expanding role of financial markets in shaping organizational decision making all make normal science driven by the internally derived questions from these paradigms less fruitful. Instead, we argue that problem-driven work that uses mechanism-based theorizing and research that takes the field rather than the organization as the unit of analysis are the most appropriate styles of organizational research under conditions of major economic change-such as our own era. This sort of work is best exemplified by various studies under the rubric of institutional theory in the past 15 years, which are reviewed here. Key words: organization theory; social mechanisms; organizational fields; paradigms Organization theory has found itself at an interesting crossroads at the turn of the century. On the one hand, we are constantly reminded that we live in a world in which large organizations have absorbed society and vacuumed up most of social reality Yet close inspection by our theoretical confreres in law and economics reveals most organizations to be mere legal fictions with no "inside" or "outside" analogous to borders-they are simply dense spots in networks of contracts among sovereign individuals (who may themselves be mere fictions-Jensen and Meckling 1976). With corporations, there is no there there-they are simply legal devices with useful properties for raising finance. While counting new incorporations may give the impression that we are living in a Cambrian Explosion of organizations (Aldrich 1999), counting may not be that informative. It is trivially easy to incorporate in the United States, with or without a recognizable organization. Enron had upwards of 3,500 subsidiaries and affiliates, often organized as corporations or limited liability companies-entities that were often both legal and accounting fictions. Original equipment manufacturers (OEMs) routinely market products designed, manufactured, and distributed by other firms. Firms have no more long-term attachment to their employees than consumers do to their grocers 332 Davis and Marquis: Prospects for Organization Theory in the Early Twenty-First Century Organization Science 16(4), pp. 332-343, © 2005 INFORMS 333 This paper argues that an appropriate aspiration for organization theory in the early twenty-first century is providing a natural history of the changing institutions of contemporary capitalism. By natural history we mean explaining patterned variation over time: how do specific ecosystems of institutions change? Institutions are the sources of social and economic order-whether organizational or otherwise. Contemporary capitalism highlights the prominent economic trends of our times: globalization in finance and trade flows, postindustrialism and the declining importance of manufacturing relative to service in advanced economies, and a predominant place for financial markets in generating both order and disorder. North (1990, p. 6) argues that "the central puzzle of human history is to account for the widely divergent paths of historical change. How have societies diverged? What accounts for their widely disparate performance characteristics?" Organization theory has a distinctive toolkit for addressing this puzzle as it plays out today, including a well-elaborated set of theoretical mechanisms that can illuminate how macrolevel changes (e.g., governmental policies to eliminate discrimination, the growth of the environmental movement, a bursting asset price bubble) have their impact on the ground. This is a pivot point in the academic division of labor, a crossroads between sociology, economics, psychology, and political science. Put simply, organization theorists are best placed to address some of the critical questions of our time because organizational processes are often the drive train by which social and economic change are effected. As Lounsbury and Ventresca (2002, p. 6) point out, this would in effect be a return to the sociological approach to organizations of the 1950s, when "organizations were seen as sites for understanding the constitution and consequences of modern forms of power" rather than objects of theory in their own right. A review of recent work suggests that the field has largely moved in this direction without particular conscious guidance (see Davis 2005 for a full account). Moreover, we argue that new institutional theory has the best chance of accomplishing these understandings because it focuses on fields, mechanisms, and change, particularly market "incursions" into traditionally stable fields, of the sort most common today. The paper is organized as follows. We first argue that empirical work in organization theory has shifted over the past two decades from paradigm-driven research, in which topics to be studied flow directly out of problems of theory, toward problem-driven work oriented toward events in the world. We argue that this shift follows from three factors: changes in the composition of organizational fields in recent times, changes in the empirical relations among core constructs in the theories, and a greater sensitization to cross-national differences and what they imply for general theories of organization. We describe social mechanisms and their place in theories about organizations. We argue that problem-driven work drawing on (organizational) mechanisms is particularly apt during a time of significant social and economic transitions, when the explanatory power of old theories has broken down. We then review studies in the tradition of new institutional theory that exemplify the kind of mechanism-based theorizing that we advocate. We conclude with some implications for what organization theory can and should look like going forward.

Research in entrepreneurship has said little about the impact of large-scale social movements on entrepreneurial processes. Similarly, social movement scholars have paid little attention to how large-scale social movements external to any one industry can influence the creation of new market opportunities. We theorize that through the construction and propagation of cognitive frameworks, norms, values, and regulatory structures, and by offering preexisting social structure, social movement organizations influence whether entrepreneurs attempt to start ventures in emerging sectors. These activities also moderate the effect of material-resource environmental factors on entrepreneurship. We explore these claims in the context of the emergent U.S. wind energy sector, 1978–1992. We find that greater numbers of environmental movement organization members increased nascent entrepreneurial activity in a state and that this effect was mediated by favorable state regulatory policy. Greater membership numbers also enhanced the effects of important natural resources, market conditions, and skilled human capital on entrepreneurial activity. Taken together, these results have important

The challenges associated with climate change will require governments, citizens, and firms to work collaboratively to reduce greenhouse gas emissions, a task that requires information on companies ' carbon risks, opportunities, strategies, and

This paper develops a critical framework on international management and production that draws from the literatures on global commodity chains and global production networks (GPNs), from institutional entrepreneurship, as well as from neo-Gramscian theory in international political economy. The framework views GPNs as integrated economic, political, and discursive systems, in which market and political power are intertwined. The framework highlights the contingent stability of GPNs as well as the potential for actors to engage politically in contestation and collaboration over system governance and the distribution of benefits. The framework offers a multidimensional and multi-level approach to understanding power relations, ideology, and value appropriation in GPNs. The framework is valuable for examining the intersection of GPNs with charged political and social issues such as sweatshops and incomes for coffee growers, and the role of geography as a source of stability and tension in these networks.

Calls for reintroducing agency, politics and contestation into institutional analysis are now legion, spanning nearly two decades since DiMaggio’s (1988) classic piece, and gaining new urgency as scholars struggle to explain institutional emergence and change. Institutionalists face persistent difficulties in these tasks. Working from arguments about isomorphism, diffusion, or path dependence, they often invoke ad hoc explanations like exogenous shocks in order to reconcile change and path creation with theories that stress the contextual sources of stability, continuity and

Policy problems do not exist as social fact awaiting discovery. Rather, they are constructed as policymakers and constituents interpret a particular aspect of the social world as problematic. How a policy problem is framed is important because it assigns responsibility and creates rationales that authorize some policy solutions and not others. This article brings together sense-making theory and frame analysis to understand the dynamics of problem framing during policy implementation. Data were derived from a yearlong ethno-graphic study of one school’s response to the California Reading Initiative. Results showed that the school’s response depended on how school staff con-structed their understanding of the relevant problem to be solved. The problem framing process was iterative and contested, shaped by authority relations and mediated by teachers ’ social networks. Ultimately, it proved important for motivating and coordinating action, reshaping authority relations, and influencing teachers ’ beliefs and practices.

This article analyzes the extent to which two institutional logics around climate change—the climate change “convinced ” and the climate change “skeptical ” logics—are truly competing or talking past each other in a way that can be described as a logic schism. Drawing on the concept of framing from social movement theory, it uses qualitative field observations from the larg-est climate deniers conference in the United States and a data set of almost 800 op-eds from major news outlets over a 2-year period to examine how convinced and skeptical arguments of opposing logics employ frames and issue categories to make arguments about climate change. This article finds that the two logics are engaging in different debates on similar issues with the former focusing on solutions while the latter debates the definition of the problem. It concludes that the debate appears to be reaching a level of polarization where one might begin to question whether meaningful dialogue and problem solving has become unavailable to participants. The implications of such a logic schism is a shift from an integrative debate focused on addressing interests, to a distributive battle over concessionary agreements with each side pursuing its goals by demonizing the other. Avoiding such an outcome requires the activation of, as yet, dormant “broker ” categories (technology, religion, and national security), the redefinition of existing ones (science, economics, risk, ideology), and the engagement of effective “climate brokers ” to deliver them.

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A challenge facing neo-institutionalism is to detail how pre-existing institutional condi-tions and alternative institutional projects influence the creation of new organizational