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Unlocking the “Iron Cage” of Corporate Conformity

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John Taylor, Professor of Economics at Stanford University and developer of the "Taylor Rule" for setting interest rates | Stanford University

John Taylor, Professor of Economics at Stanford University and developer of the "Taylor Rule" for setting interest rates | Stanford University

Dec 5 2023

As a newly hired assistant professor of organizational behavior and sociology at the Yale School of Management, Walter (Woody) Powell observed a strange phenomenon through his office window. It was 1979. Bold colors and patterns were in style and his students came to campus dressed in jeans and vivid colors.

"I was stunned by this transformation," he says. When it came time to join an organization, these “free spirits” believed they had to put on the right uniform to be taken seriously.

In 1983, Powell and another young faculty member, Paul DiMaggio, published their argument in an article in the American Sociological Review titled “The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields.” What had started with a few curious observations became the most cited paper in the journal’s history and a seminal moment in the fields of organizational development and sociology.

Now a professor of organizational behavior at Stanford Graduate School of Business, Powell reflects on the 40-year legacy of that paper. In a new article, he and DiMaggio, now at New York University, revisit the origins of their “iron cage” model and its continued relevance.

DiMaggio and Powell recall how their research on nonprofits showed the pressures that drive organizations to morph into similar structures, a phenomenon they termed “isomorphism.”

"Many scholarly communities are now like suburbs, nice quiet villages that have their own language, their own ways of doing work," Powell says.

Powell and DiMaggio also caution against isolation and division among disciplines. "You don’t have to wear the same uniform as everyone else," they write.

Ironically, though, Powell and DiMaggio now lament that the structure of academia has itself calcified. "Young scholars feel such pressure to publish — and are so worried about securing tenure — that their research has grown myopic," Powell says.

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