Monday, February 9, 2009

Institutions, procedures, norms

One of the noteworthy aspects of the framing offered by Victor Nee and Mary Brinton of the assumptions of the new institutionalism is the very close connection they postulate between institutions and norms. (See the prior posting on this subject). So what is the connection between institutions and norms?

The idea that an institution is nothing more than a collections of norms, formal and informal, seems incomplete on its face. Institutions also depend on rules, procedures, protocols, sanctions, and habits and practices. These other social behavioral factors perhaps intersect in various ways with the workings of social norms, but they are not reducible to a set of norms. And this is to say that institutions are not reducible to a collection of norms.

Consider for example the institutions that embody the patient safety regime in a hospital. What are the constituents of the institutions through which hospitals provide for patient safety? Certainly there are norms, both formal and informal, that are deliberately inculcated and reinforced and that influence the behavior of nurses, pharmacists, technicians, and doctors. But there are also procedures -- checklists in operating rooms; training programs -- rehearsals of complex crisis activities; routinized behaviors -- "always confirm the patient's birthday before initiating a procedure"; and rules -- "physicians must disclose financial relationships with suppliers". So the institutions defining the management of patient safety are a heterogeneous mix of social factors and processes.

A key feature of an institution, then, is the set of procedures and protocols that it embodies. In fact, we might consider a short-hand way of specifying an institution in terms of the set of procedures it specifies for behavior in stereotyped circumstances of crisis, conflict, cooperation, and mundane interactions with stakeholders. Organizations have usually created specific ways of handling typical situations: handling an intoxicated customer in a restaurant, making sure that no "wrong site" surgeries occur in an operating room, handling the flow of emergency supplies into a region when a large disaster occurs. The idea here is that the performance of the organization, and the individuals within it, will be more effective at achieving the desired goals of the organization if plans and procedures have been developed to coordinate actions in the most effective way possible. This is the purpose of an airline pilot's checklist before takeoff; it forces the pilot to go through a complete procedure that has been developed for the purpose of avoiding mistakes. Spontaneous, improvised action is sometimes unavoidable; but organizations have learned that they are more effective when they thoughtfully develop procedures for handling their high-risk activities.

This is the point at which the categories of management oversight and staff training come into play. It is one thing to have designed an effective set of procedures for handling a given complex task; but this achievement is only genuinely effective if agents within the organization in fact follow the procedures and protocols. Training is the umbrella activity that describes the processes through which the organization attempts to achieve a high level of shared knowledge about the organization's procedures. And management oversight is the umbrella activity that describes the processes of supervision and motivation through which the organization attempts to ensure that its agents follow the procedures and protocols.

In fact, one of the central findings in the area of safety research is that the specific content of the procedures of an organization that engages in high-risk activities is crucially important to the overall safety performance of the organization. Apparently small differences in procedure can have an important effect on safety. To take a fairly trivial example, the construction of a stylized vocabulary and syntax for air traffic controllers and pilots increases safety by reducing the possibility of ambiguous communications; so two air traffic systems that were identical except with respect to the issue of standardized communications protocols will be expected to have different safety records. Another key finding falls more on the "norms and culture" side of the equation; it is frequently observed that high-risk organizations need to embody a culture of safety that permeates the whole organization.

We might postulate that norms come into the story when we get to the point of asking what motivates a person to conform to the prescribed procedure or rule -- though there are several other social-behavioral mechanisms that work at this level as well (trained habits, well enforced sanctions, for example). But more fundamentally, the explanatory value of the micro-institutional analysis may come in at the level of the details of the procedures and rules in contrast to other possible embodiments -- rather than at the level of the question, what makes these procedures effective in most participants' conduct?

We might say, then, that an institution can be fully specified when we provide information about:
  • the procedures, policies, and protocols it imposes on its participants
  • the training and educational processes the institution relies on for instilling appropriate knowledge about its procedures and rules in its participants
  • the management, supervision, enforcement, and incentive mechanisms it embodies to assure a sufficient level of compliance among its participants
  • the norms of behavior that typical participants have internalized with respect to action within the institution
And the distinctive performance characteristics of the institution may derive from the specific nature of the arrangements that are described at each of these levels.

System safety is a good example to consider from the point of view of the new institutionalism. Two airlines may have significantly different safety records. And the explanation may be at any of these levels: they may have differences in formalized procedures, they may have differences in training regimes, they may have differences in management oversight effectiveness, or they may have different normative cultures at the rank-and-file level. It is a central insight of the new institutionalism that the first level may be the most important for explaining the overall safety records of the two companies, even though mechanisms may fail at any of the other levels as well. Procedural differences generally lead to significant and measurable differences in the quality of organizational results. (Nancy Leveson's Safeware: System Safety and Computers provides a great discussion of many of these issues.)

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