Institutional Acumen:Why Network-based Status Matters For Reactivity?

A sizable neo-institutional research exists on how rational myth like formal structures and policies diffuse in organizational fields,and why practices may be loosely decoupled with institutional demands.Recent studies combined interdisciplinary perspectives have refocused the attention on agency and micro-foundations of institutional theory by probing into the antecedents and topology of variation in reactivity among organizational actors during the internalization process,while little is known about the effect of organizational status on practice variation.This research conceptualizes the organizations'capacity for recognition and interpretation of institutional demands and the resulting decision-making process as institutional acumen,which underlies the cognitive mechanism between structural dynamics,such as organizational properties and environmental complexity,and actions.Theoretically,organizational status plays a pivotal role in nurturing and exploiting institutional acumen and thus the differentiation of structural positions contributes to the variation in acceptance and implementation of policies:Those who occupy the higher status tend to have a discerning sense of the changing institutional environment and actively couple to the policies,to which they attach great importance,while the organizations from lower status always stay inactive or decoupled as a result of lack of identity.Employing a unique data of 1026 nonprofit foundations,we test the effects of organizational status on the variation in reactivity to accountability and transparency movement in Chinese nonprofit world and take the interlocking pressure as well as political embeddedness into account,too.Results indicate a positively significant relationship between status measured by brokerage position of focal organization and its conformity to disclosure policies,while this advantage may not be shared by its peers.We also find a positively significant relationship between indirect status measured by mean of brokerage of focal organization's interlocking partners and their conformity and,more importantly,the average conformity of interlocking partners mediates the association bet,ween indirect status and focal foundation's reactivity.Moreover,the presence of noble political officials in focal organization results in a lower degree of conformity to disclosure policies and eliminates its status advantage.Finally,the effects of focal organization's status,peer pressure and political embeddedness are persistent over a long period.These findings highlight the institutional acumen as a critical source of practice variation,providing an explanation for the inert progress of self-regulation among Chinese nonprofit foundations.This research,therefore,could direct a novel approach for institutional researchers to theorize about the micro-process of organizational reactivity and variation in internalization.