The Effect of Institutional Isomorphism in Social Enterprises on Organizational Performance - Focused on the Mediating Role of Mimetic Isomorphism -

The objective of this study is to examine the effects of institutional isomorphism in social enterprises on organizational performance. Institutional theorists argue that institutionalized practices and procedures come to take on a rule-like status and function as powerful myths. Organizations are driven to incorporate the institutionalized practices and procedures and become to their institutional environment increase their legitimacy that makes acquisition of indispensable resource easier. This analyses tested a mediation model consisting of organizational performance as the dependent variable, coercive isomorphism and normative isomorphism as the independent variable, and mimetic isomorphism as the mediator. Since organizational performance cannot be improved without the acquisition of resources, it is hypothesized that coercive, normative and mimetic isomorphism is positively related to organizational performance. The data are gathered from social enterprises in the City of Seoul and Gyunggi-Do and were analyzed using correlation analysis and structural equation modeling with AMOS 20.0. Results of a structural equation modeling show three major findings. First, coercive and mimetic isomorphism is positively related to organizational performance. Second, normative isomorphism is not related to organizational performance. Finally, mimetic isomorphism mediates the relationship between organizational performance and coercive isomorphism. The results partially support the positive effects of institutional isomorphism on organizational performance.