Institutional Logics, Organizational Alignment, and Performance: The Role of the CEO

Abstract

Institutional logics are deeply ingrained belief systems that determine an individual’s actions and shape how they see reality (Thornton, Ocasio, & Lounsbury, 2012). Drawing from the CEO literature (e.g., Boeker, 1989; Harris & Helfat, 1997; Zhang & Rajagopalan, 2003) and building on the theory of institutional logics (e.g., Besharov & Smith, 2014; Thornton & Ocasio, 1999; Thornton et al., 2012) I argue that because a newly appointed CEO will be able to shift her organization’s orientation toward the country’s dominant institutional logics, a change in CEO will lead to increased performance. Using a large quantitative dataset of hospitals in California and Texas, I find support for the argument that misalignment between the organization’s and the state’s institutional logics will lead to a change in CEO. Furthermore, I find that most CEOs are replaced by executives who share the same institutional logics of their new organization and are therefore unable to make institutional logics alignment change. I did not find support for the argument that a change in CEO leads to a change in alignment. I discuss the implications of this lack of evidence for the theoretical development and managerial relevance of institutional logics. I conclude by exploring future directions for research based on the results of this dissertation.