Institutional theory and peer influence on business social performance

¶ … Besser and Miller's "The company they keep: How formal associations impact business social performance." This article provides empirical evidence into the tendencies towards business social performances that various organizations evince when a part of business associations. For the sake of the research performed, such associations include those pertaining to specific vertical industries and to community relationships, the latter of which is typified by a chamber of commerce (Besser and Miller, 2011, p. 504). The research performed in this article demonstrates that businesses are unequivocally influenced by their social performances of the businesses in their peer group within these associations -- a fact which has implications for both imparting and reinforcing critical standards of ethics within business. However, it is important to realize that such an influence has much less to do with the ethical guidelines dictated by the business associations, and much more to do with the actual behavior of the fellow organizations that organizations are linked together with in the aforementioned associations.

In many ways, the basis for the research performed in this article is the conception of institutional theory. Although there are several different codifications of institutional theory and its applications to businesses, primarily this theory serves as a hypothesis for the authors because it denotes that companies in business fields are influenced by one another (Besser and Millers, 2011, p. 506). The authors are able to prove that this theory is applicable to organizations within professional organizations by distributing a questionnaire with closed-ended questions about certain facets of organizational behavior. The data obtained from this research illustrated that organizations tend to adhere to the tendencies of their peers in such organizations in terms of business social performance -- which is defined by the authors as a form of social accountability, public largess, and ethical behaviors (Besser and Miller, 2011, p. 503-504). Such behavior may be swayed by, but not necessarily conform to, that disseminated by professional agencies.

My reaction to this paper was two-fold. On the one hand, I thought that the very point of research was unnecessary. Having engaged in a few business ventures myself at this point in my life, I almost believed that it was common knowledge that businesses tended to follow the proclivities of one another. For instance, before hiring a candidate for a job it is customary for an organization to get recommendations for, organizations that previously hired a candidate, simply to ensure that he or she is trustworthy. Therefore, I was not surprised at all to read that the tendencies of a business' peers within a professional agency would somehow impact that business's implementation and perception of business social performance. I had never heard this particular term before, however, and was confused about the topic of this paper until the authors explicated this term.