Organizational Effectiveness and the Institutional Environment

Despite similarities in technology and other aspects of their operation, the typical pharmaceutical manufacturing firm is far more profitable than the typical phonograph record company. These industries are compared in terms of their institutional environments, primarily from 1950 to 1965. Strong differences in organizational effectiveness, regarding their ability to control three aspects of the environment--pricing and distribution, patent and copyright law, and external opinion-leaders--are suggested to help account for the differential performance of these industries. The utility of comparing whole industries as units of analysis in organizational research is also discussed.