Institutional Sources of Variation in Embedded Agency

Who initiates change? Prior research has generally focused on an organization’s position in a field as a proxy for institutional embeddedness that influences organizational decisions to change. For instance, central organizations deeply embedded in institutional environment are less likely to innovate. In contrast, we argue that institutional influence assumed to exist in the position varies according to sources that condition the degree of embeddedness. As for the sources, we concentrate on the heterogeneity and intensity of associations that an organization has with other actors and parties in the environment. We examine our arguments in a study of the formal incorporation of unconventional medicine into conventional hospitals. Unconventional medicine includes a group of treatment therapies (e.g., acupuncture, therapeutic touch, naturopathy, etc.) whose underlying principles rest uneasily with those of dominant conventional medicine. Analyzing a dataset of 245 hospitals from 1992 to 2001, we find that the hospitals with greater degree of heterogeneity in embeddedness are more likely to adopt unconventional therapies. The adoption of unconventional therapies is high at the middle and low at both the top and bottom of embeddedness intensity. Implications for the study of how the embeddedness of agency arises are discussed.