Institutional disruption and technology platforms: the Uber case.
| Autor | Ferreira, Wilquer Silvano de Souza |
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Introduction
New technologies have triggered over the past years several disturbances in the socioeconomic environment with significant impacts on the institutional sphere, modifying the way people relate, allocate available resources, perform daily activities and formulate "rules and requirements to which individual organizations must conform if they are to receive support and legitimacy" (Scott, 1995, p. 132).
Such institutional disruption can be perceived in different dimensions of social and economic life, especially considering the urban mobility segment-in which Uber is to be found-with the emergence of technology platforms and collaborative consumption. The quick proliferation of hitchhiking and mobility applications has been affecting not only the organizational environment, but also the way through which individuals relate to each other and the nature of social preferences, which is a process still poorly known and mapped.
To understand the capitalist economic institutions and their changes has become a challenge in the fields of economics, law studies, organizations, sociology, among others.
The institutional theories assume that institutions have a central logic (Friedland & Alford, 1991) or rationality (DiMaggio & Powell, 1983; Scott, 1995; Townley, 2002), endowed with a set of material and symbolical practices in addition to organizational principles that provide action logics for individuals and organizations (Glynn & Lounsbury, 2005; Suddaby & Greenwood, 2005). However, institutions are dynamic and evolve over time according to certain conditions or circumstances.
Some studies examine how an institutional logic could be replaced by a new logic (e.g. Cooper, Hinings, Greenwood & Brown, 1996; Zilber, 2006), resulting in a suppressed and a dominant logic (e.g. Reay & Hinings, 2005; Townley, 2002), which could refer to technologies disconnected from moral assumptions or particular norms with weaker consolidated assumptions.
In the context of technology platforms, such disruption and change process is in full swing. By analyzing the disruptive impact of Uber, Laurell & Sandstrom (2016) observed that the application would be distorting established institutions, changing "the rules of the game" (Laurell & Sandstrom, 2016, p. 4). In fact, by directly connecting providers and consumers, peer-to-peer platforms provide an alternative to traditional mobility models and generate significant changes in the entire urban mobility segment. The impacts, however, go beyond this market and reach out to the transportation supply chain and even other production chains; thus, such impacts also affect the institutional environment by modifying rules, mental models and the perception of individuals.
Despite the relevance of such phenomenon, little is known about the real impacts of technology platforms on social, economic and institutional life. Institutional disruption alongside its mechanisms and consequences has been neglected by organizational theorists. A search in international databases using a search criterion (restricted to words in the title and keywords), the combination "institutional disruption" or just "disruption", "rupture", "change", and/or "institutional," yielded a total of 56 articles that approached institutional disruption; none of them, however, directly addressed the issue of disruption in technology or sharing platforms, such as Uber. In the databases, only one article was identified in Wiley Online Library; no article was found in the databases Web of Science, SCOPUS, SPELL, SCIELO and Sage Journals; two articles were identified in the database Emerald Publishing; and 53 in JSTOR. Most of the published articles approach institutional disruption from a public policy perspective (23); some of them address historical cultural changes (8), issues related to social causes and ethics (5), environmental issues (6), limitations that hamper economic development (5), changes in religious paradigms (1), conflicts and power relations between groups (6), philanthropy (1) and gender issues (1).
Recently, Zvolska, Palgan & Mont (2019) pointed out that sharing platforms in general are more prone to modify institutional structures. Laurell & Sandstrom (2016) also raised the hypothesis that Uber, in particular, would be distorting established institutions. However, these studies did not deeply investigate the phenomenon and did not present concrete and measurable evidence on it.
In Brazil, the lack of information and analysis in this field is even greater. A search carried out in some of the main Brazilian periodicals (e.g. Revista de Administragao de Empresas, Revista de Administragao Contemporanea, Revista de Administragao da USP, Revista de Administragao e Inovagao, Revista Brasileira de Inovagao, Revista Brasileira de Gestao e Inovagao, Revista Tecnologia e Sociedade, and Organizagoes & Sociedade) yielded no identification of articles using the same search criterion as previously mentioned.
In order to fill some of these gaps and open paths for the creation of new ways to observe and analyze the phenomenon, which is extremely relevant in the contemporary world, we elaborated this article, whose aim is to dive into the institutional approach from a practice perspective, associating it with technology platforms. From there, we elaborate and apply an analysis model constituted by a set of totally original indicators capable of mapping and measuring the extension of the ongoing phenomenon, i.e. the Uber platform.
In this context, we hypothesize that the use of the platform Uber is associated with different types of changes in the institutional logic, whether in assumptions and believes, reward and remuneration systems, organizational structure and governance, social relations or individual preferences.
The article is organized as follows. First, we present the literature review approaching institutional disruption and technology platforms considering the changes in course, and conclude the section presenting a conceptual model for analysis. Then, we present the methodological procedures, including hypothesis testing. The subsequent section presents and analyzes the results found and, finally, the last section presents the final considerations of this article.
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Institutional changes and technology platforms
2.1 Disruption and institutional change
According to North (1990), an institution is defined by its hard-core elements, which are to be understood as the rules of the game, where moderate components sustain hard-core components (Clemens & Cook, 1999); there is an interdependency between institutions and the systems in which they are inserted (Hira & Hira, 2000; Peters, 2005; Pierson, 2004). Still in line with North (2006), institutions are the rules of the game-formal and informal-being also what originates them-positive or nonpositive norms-such as moral values, beliefs, habits and world perspective.
Institutions would condition the actions of individuals (Friel, 2017) as they define preferences and power in society (Powell & DiMaggio, 1991; Thelen & Steinmo, 1992) and provide shared meanings and cognitive frameworks that shape how humans interpret each other's behavior (Fligstein, 2001; Hall & Taylor, 2003).
Institutional theory has evolved over the years under the dual framework offunctionalism and normal science (Clegg & Hardy, 2006, p. 30), being approached by scholars from different knowledge fields, like sociology (DiMaggio & Powell, 1983; Roy, 1997), organizational theory (Meyer & Rowan, 1977), political sciences (Bonchek & Shepsle, 1996) and economics. The New Institutional Economics (NIE) considers efficient the institution that generates social welfare; being credible, reverberating and taking root in society is fundamental to the institution. Otherwise, rules and norms would be nothing but formal constructions that add no social nor economic benefits; they would generate waste and create uncertainties while hindering the establishment of a trusting environment for the creation of businesses (Coase, 1937; Simon, 1947; Williamson, 1985; North, 1990, 2006). Thus, institutional theory may be approached from different perspectives, including sociology.
The social perspective of institutional theory confirms in its neo-institutional ramifications the institutional practice approach, which examines how actors interact with constructs and resort to social and physical tools in their daily activities, which constitute the studies of practice (Lawrence & Suddaby, 2006). Practice theorists (ex. Bourdieu, 1990; Giddens, 1984; Sztompka, 1991; Turner, 1994) acknowledge the duality between institutions and practice. Within this context, institutions are created by and-at the same time-create the action (Jarzabkowski, Matthiesen & Van de Ven, 2009). While neo-institutionalists focus on institutional changes by attributing greater importance to agency and routine as a unit of analysis (e.g. Nelson & Winter, 1982; Powell & DiMaggio, 1991; Oliver, 1991; Seo & Creed, 2002), new institutionalists concentrate their studies on transaction costs and consequences from the norms, practice theorists attach greater weight to actions, interactions and negotiations between multiple actors (Jarzabkowski et al., 2007). In such actions and interactions, actors initiate, reproduce and modify institutionalized practices through habits, tacit knowledge, culture, routines, motivations and emotions (Reckwitz, 2002).
The practice approach focuses on actions and interactions among actors to create, maintain and disrupt institutions (Jarzabkowski et al, 2009). In other words, the daily practices of actors produce pluralist institutions, and the interactions are full of institutional tension instead of being an exceptional or isolated phenomenon. For such flow of interactions that occur within the institutional structure, Sztompka (1991, p. 96) proposes the concept of praxis, consisting in a social process of constant...
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