When Worlds Collide: The Internal Dynamics of Organizational Responses to Conflicting Institutional Demands (Revision 2 )

Institutional theory suggests that organizations are strongly influenced by the pressures for compliance exerted by their institutional referents. Yet, organizations are increasingly subject to conflicting demands imposed by their institutional environment which makes full compliance impossible to achieve because satisfying some demands will require ignoring or rejecting others. Although prior work suggests that organizations develop strategic responses in such situations of conflicting institutional demands, this work lacks predictive power since it ignores the internal dynamics of organizational responses. This paper addresses this gap by proposing a model of organizational responses to conflicting institutional demands that takes into account intra-organizational political processes. The authors' key contribution is to explore the conflict dimension of institutional pressures and provide a more precise model of organizational responses, including the identification of situations in which conflicting institutional demands may lead to organizational paralysis or breakup.