Institutional Entrepreneurship: Who Gets to Change the Rules?

DiMaggio and Powell (1983) gave IS researchers one of the most useful concepts in the field: isomorphism. Organizations in the same field converge toward similar structures, practices, and technologies, not because convergence is efficient, but because convergence is safe. Coercive pressures from regulators, mimetic pressures from uncertainty, and normative pressures from professional communities all push organizations toward looking like each other. The result is a field full of organizations that have converged on similar practices, often without a strong efficiency rationale.

The theory is powerful and I think it is mostly correct about how most organizations behave most of the time. But it creates a puzzle. If institutions create such strong pressure toward conformity, who changes the institutions in the first place? If everyone is copying everyone else, how does the thing being copied ever change?

DiMaggio (1988) answered this with the concept of institutional entrepreneurship. Certain actors, when they have access to sufficient resources and are positioned at the right moment, can reshape the institutional rules that other organizations must follow. They are not just adopting or conforming. They are changing what conformity means. The institutional entrepreneur does not succeed by being better at playing the existing game. They succeed by changing the game.

The concept matters for IS because information technology is one of the most powerful instruments through which institutional entrepreneurs operate. When Apple launched the App Store in 2008, it did not just create a distribution mechanism for software. It created a new institutional field. Before the App Store, the question of how software was sold, what pricing structures were legitimate, how content was moderated, and what percentage of revenue went to developers versus distributors was answered differently by different actors in different markets. Apple resolved those questions in one move, for hundreds of millions of users and hundreds of thousands of developers, by establishing rules that everyone who wanted access to the platform had to accept. The App Store terms became the institutional environment for mobile software. Apple was the institutional entrepreneur, and they had the resources, the installed base, and the technical architecture to make their rules stick.

Greenwood and Suddaby (2006) extended this line of research to professional service firms, showing how large organizations can occupy a position where they both operate under institutional rules and are powerful enough to reshape those rules. The paper appears in my local study-hub library through the Faik, Barrett, and Oborn (2020) reference list. The dynamic they identified is one I think shows up constantly in platform-dominant IS environments. The hyperscalers, the major SaaS vendors, the large platform companies, they are simultaneously subject to institutional pressures and capable of creating new ones.

This is not a neutral process. Institutional entrepreneurship requires resources, and most organizations do not have enough of them to change the rules. Small organizations conform. Large organizations, especially those with network effects and platform reach, have the capacity to become institutional entrepreneurs. The power asymmetry is structural. When AWS decides that a particular security model is the default for cloud deployments, or when Salesforce changes how integrations are licensed, or when Google changes its search ranking criteria, the downstream effects for thousands of smaller organizations are real and often costly. Those organizations did not choose the new institutional rules. They woke up to find that the rules had changed.

The IS implications here connect to what Seidel and colleagues (2025) found in their MISQ work on regulating emerging technologies. They considered institutional entrepreneurship as one possible lens for explaining how regulatory frameworks emerge around new technology. My local paper library has this paper. The argument is that the process of making rules about new technologies is not purely a government function. Dominant technology firms shape what regulation looks like by establishing technical facts on the ground before regulators can catch up. When a technology is already deployed at scale, the cost of enforcing a different design becomes prohibitive, and the incumbent architecture effectively becomes institutionalized. The institutional entrepreneur did not need to lobby for the rules. They built the infrastructure and let the rules form around it.

Gartner's analysis of platform ecosystems and hyperscaler market dynamics regularly describes this dynamic, even when it does not use the institutional entrepreneurship frame explicitly. The newsroom at https://www.gartner.com/en/newsroom covers how major cloud and platform vendors shape enterprise technology choices in ways that constrain what buyers can realistically consider. That constraint is not just market power in the standard economic sense. It is institutional power: the capacity to define what the legitimate options are, what good practice looks like, and what choices are simply not considered.

The uncomfortable thing about institutional entrepreneurship as a concept is that it makes visible something that institutional theory in its standard form leaves in the background. Most institutional theory research studies conformity. Organizations adopt something because others have adopted it, because regulators require it, or because professional norms dictate it. The agency in that story is diffuse, spread across the field. Institutional entrepreneurship puts a face on the mechanism. Someone with resources and leverage changed the rules. Other organizations had no choice but to follow. The question "who changed the rules?" is also the question "who has the power to change the rules?" and that is a harder question than most IS research about technology adoption is set up to ask.

When I read the isomorphism literature alongside what happens with AI policy, the institutional entrepreneurship frame adds something important. The organizations shaping AI norms right now, the major model vendors, the large cloud providers, the industry consortia they participate in, are not neutral actors responding to field-level pressures. Some of them are field-level forces, writing the rules that will eventually be called institutional context. Understanding that distinction is, I think, one of the more important things IS researchers can contribute to the AI governance conversation.