→ Structural secrecy can lead to hidden or informal practices within an organization that may
undermine its goals or lead to failures.
→ Culture can encourage poor behavior or risk-taking and contribute to organizational
→ Process and tasks within an organization can be complex and imprecise, leading to poor
assessments and compounded errors.
→ It is important for organizations to be aware of these potential areas of failure and take steps
to mitigate risk and prevent failures from occurring.
Institutional isomorphism → Tendency for organizations to adopt structures and practices that
are seen as legitimate in their field, even if they are not necessarily efficient or effective. This
can lead to the adoption of structures that may not be well-suited to the organization's needs
Excessive formalization, or the use of strict rules and procedures, can also inhibit an
organization's ability to adapt and introduce unnecessary complexity.
Structural secrecy refers to the use of hidden or informal practices within an organization that
may undermine its goals or leads to failures.
Culture can also play a role in organizational failures. Employees may be socialized into a
company or occupational culture that may excuse poor behavior or encourage risk-taking.
Finally, failures can also arise from the process and tasks that are carried out within an
organization. These processes may be governed by tacit knowledge or rules that emerge only
a±er the fact, leading to uncertainty and imprecision. For example, in the medical field, the
process of diagnosing a patient can be complex and imprecise, leading to poor assessments
and compounded errors.
Overall, it is important for organizations to be aware of these potential areas of failure and
take steps to mitigate risk and prevent failures from occurring
Process & Tasks: In an organization, failures can also arise due to the processes and tasks that
are carried out. Informal practices that exist within the organization may undermine the
achievement of organizational goals. This is because these informal practices may be in
conflict with the formal organizational procedures or guidelines. Such practices are o±en
governed by tacit knowledge or rules that only emerge a±er the fact.
For instance, medical diagnosis relies on a series of tasks aimed at assessing the human body.
These tasks are uncertain and imprecise, which makes the diagnosis challenging. Poor
assessments or incorrect interpretations of test results can compound the error and lead to a
misdiagnosis, which can have severe consequences for the patient.
Another example is the manipulation of accounting practices to inflate the value of the
company. The use of creative accounting practices or hiding information from stakeholders
can lead to inflated valuations, which can eventually result in a major failure of the
organization. Similarly, excessive risk-taking encouraged by CEOs and higher management
can also result in organizational failure.