HOW DEMOCRATIC INTERNAL LAW LEADS TO LOW COST EFFICIENT PROCESSES : PRACTICES AS A MEDIUM OF INTERACTION BETWEEN INSTITUTION AND ORGANIZATION

Overview & Synopsis

According to Sewell's principle of the multiplicity and the intersection of the structures, we consider here a retailing bank as an organization and as an institution. As an institution, the studied bank appears to be a constitutional democracy, whereas, as an organization, it proves to be a very efficient low cost company. Organizational and institutional features of this firm look correlated and this correlation is interpreted as an interaction between institution and organization, which takes place through the medium of interconnected practices inside the firm. Institutional features are analyzed through Hauriou's institutionalism and Turpin's Constitutional laws theory, whereas organizational routines are described through a triadic model (Ostensive aspect, performance and artifacts) proposed by Pentland and Feldman. Through the study of induction practice and interactions between this practice and other ones inside the firm, we map systematically induction's practising in the sense of Pesqueux and establish a dual influence of institution on organization. Firstly, there is a mainstream influence from constitutional law to organizational routines, through interconnection with an intermediate step called “institutional routines”. Secondly, there is a “coherence” effect, by which some peculiarities of several organizational routines reinforce each other in the day-to-day life of the firm. Finally, we discuss the possibility of building a constitutional theory of the firm. We emphasize the structuring role of law and the specific influence of political constitutional law on the empowerment of employees, through the dialectic tension between law and other components of the institution.