How do organizations gain legitimacy by following accepted practices?

In neoinstitutionalism, organizations gain legitimacy by conforming to the established practices, structures, and social norms of their environments. Because these practices are widely shared, externally validated, and collectively expected, they become the natural model for organizations to follow.1

By adopting these institutionalized structures—such as formal hierarchies—organizations signal that they are operating in a socially acceptable manner. This conformity is essential because it enhances an organization's ability to secure valuable resources and improves its long-term survival prospects. Conversely, organizations that fail to align with these institutionalized expectations may face negative performance and a loss of legitimacy.1

It is important to note that this process is often driven by external pressures rather than internal efficiency; organizations may adopt certain structures simply because they are perceived as the "correct" way to function within their field. Ultimately, this drive for conformity leads organizations within the same field to become increasingly homogeneous as they seek to mirror the prevailing models of their environment.1