Institutional Change

“Conceptual framework to understand how organisations try to shape current smart grid developments and legitimise some rules and norms over others”

“Smart grid developments call for a change of existing institutions and institutional arrangements (i.e. overarching rules and requirements such as regulations and standards) [23] within the electricity sector. Due to these changes, organisations have to undergo several adaptation processes, which could potentially hugely influence their day-to-day operations, collaborations with other actors and business models [e.g. 12,38]. However, organisations do not have to accept these changes without at least some resistance. They can actively attempt to shape negotiations and new role allocations within these developments [38]. To be able to examine these institutional changes, we draw on new institutionalism. At the centre of this conceptual approach are questions that examine the way organisations respond to institutional pressures [44], the varying institutions that structure an organisational field [21] and the ways in which different organisations influence (and are influenced by) institutional changes [22,45,46]. We make use of the following three concepts: a) organisational field [47], b) pillars of institutions [23] and c) institutional work [24] to analyse how institutionalised rules are challenged through current smart grid developments and how organisational actors attempt to influence efforts to advance smart grid developments.”

“Institutional change does not primarily occur through external shocks, such as economic crises [52]; it also derives from within the field. As Lawrence and Suddaby [24] point out and previous studies have shown [45], it makes sense to explain changes in organisational fields through the emergence of alternative practices that, over time, appear to actors to be more legitimate while the legitimacy of the previously institutionalised practice is eroded as part of the institutionali sation process [45]. By adopting a practice perspective on institutions, Lawrence and Suddaby argue that research can focus on ‘the knowl edgeable, creative and practical work of individual and collective actors aimed at creating, maintaining and disrupting institutions’ [24, p. 12]”

[Source: Rohde, Friederike, and Sabine Hielscher. ‘Smart Grids and Institutional Change: Emerging Contestations between Organisations over Smart Energy Transitions’. Energy Research & Social Science 74 (April 2021): 101974. https://doi.org/10.1016/j.erss.2021.101974.]

The paper concludes:

Country specific empirical findings - Germany “indicate that organisations’ activities linked to these contestations are grounded in five different forms of institutional work, namely pooling, playing up, standardising, advocating and gap filling.”

Generalized conclusions:

“The heterogeneity of organisations ’ aims, interests and belief systems, as highlighted by our examination of institutional work, are key to understandingwhy smart grid developments lag behind initial expectations. The rules (e.g. who gets access to the market) and roles (e.g. who should handle the data and/or who should manage grid flexibility) in future smart grids are not clearly defined and thus highly contested among the organisations. The struggle is much more about an individual organisation’s interests than about a wider governmental and/or public debate [66] as to what constitutes a smart grid, the main purpose it should serve and how it could be organised.”

“organisations involved act in a field with relatively high uncertainty [58]. These uncertainties are created, in part, from the lack of clear regulative developments that would allow organisations, for example, to create new rules to coordinate and manage grid bottlenecks. … To go beyond the pilot stage in smart grid developments, there seem to be a profound need for public policy [35] and a shared and institutionalised vision as to how a smart grid should look so that it can contribute to a low-carbon energy system.”

“developments related to smart grids have much to do with changing the taken-for-granted meaning systems within the energy system (e.g. by whom and how should it be organised and run). New entrance organisations attempt to change the accepted meaning systems (through, for instance, setting up energy exchange platforms), but the underlying cultural-cognitive aspects of the institutionalorder in the currentenergy system are much harder to reconfigure than the regulative and normative ones.”

[Source: Rohde, Friederike, and Sabine Hielscher. ‘Smart Grids and Institutional Change: Emerging Contestations between Organisations over Smart Energy Transitions’. Energy Research & Social Science 74 (April 2021): 101974. https://doi.org/10.1016/j.erss.2021.101974.]

“institutional work (i.e. as deliberate activities of individuals and/or organisations that aim to create, maintain and transform institutions).”

[Source: Rohde, Friederike, and Sabine Hielscher. ‘Smart Grids and Institutional Change: Emerging Contestations between Organisations over Smart Energy Transitions’. Energy Research & Social Science 74 (April 2021): 101974. https://doi.org/10.1016/j.erss.2021.101974.]

“Lawrence and Suddaby’s (2006:215) definition of institutional work rests on the “the purposive action of individuals and organizations aimed at creating, maintaining and disrupting institutions.””

“four practices of institutional work in the face of uncertainty”:

1. “bootstrapping (i.e., reaching conclusions without conclusive evidence),
2. roadmapping (i.e., defining future technological milestones),
3. leader-picking (i.e., using and reinforcing momentum), and
4. issue-bracketing (i.e., excluding or postponing topics).”

[Source: Möllering, Guido, and Gordon Müller-Seitz. ‘Direction, Not Destination: Institutional Work Practices in the Face of Field-Level Uncertainty’. European Management Journal 36, no. 1 (February 2018): 28–37. https://doi.org/10.1016/j.emj.2017.10.004.]