Institutional Theory in Governmental Organizations Literature review

Institutional Theory in Governmental Organizations - Literature review Example This pressure has forced many of them to adopt new strategies such as Institutional Theory and Performance Measurement Systems, in order to overcome this pressure. Factors making Institutional Theory applicable in the Public Sector There has been an increasing pressure, for governmental and other nonprofit organizations to adopt strategies such as Institutional Theory. It is claimed that these new strategies, will make them act more like profit-making organizations than just nonprofit organizations. According to Oliver (1997, p. 697-698), governmental organizations are more vulnerable to all the three types of institutional forces than other profit-making organizations. As he explains, researchers have shown that the susceptibility of public sector organizations to institutional pressures is extremely high due to the many stakeholders and customers that it serves. All this pressure has doomed it highly necessary for the governmental organizations to adopt strategies such as Instituti onal Theory and Performance Measurement. According to Peter and Joseph (2004, p. 283-285), the pressure that the public sector is experiencing, mainly comes from the non-profit organizations that rely on the government for funding. It is argued that non-profit organizations have grown in numbers and have evolved from small-locally owned to large, national owned organizations. Therefore, these organizations are pressuring the governmental sector more. This is because they require more funds to accomplish their elevated goals and sustain their large workforce. The state is another stakeholder that is pressuring the public sector in many countries. According to Brunson and Olsen (1993, p. 44-46), many governmental and nonprofit organizations are owned by the state or the government in many countries. Therefore, it is argued that many governments place a lot of pressure on their organizations, in order to gather popularity from the citizens. As Grafstein (1992, p. 223-225), the governme ntal organizations are also currently facing another pressure from the many customers that they serve. As he points out, many profit-making organizations have been applying the concepts of intuitional theory in their firms, so as to maintain and attract more customers. According to Katz and Khan (1978, p. 147), the services and goods being provided by the private and many other profit-making organizations are far much better compared to the ones provided by the same organizations owned by the government. As Grafstein explains, this has resulted in the governmental organizations’ customers demanding the same quality goods and services as the ones provided in the profit-making organizations. Therefore, it is claimed that many governmental and nonprofit organizations are adopting the Institutional Theory in their institutions to enable them to overcome this pressure.