JOMO KENYATTA UNIVERSITY OF AGRICULTURE AND TECHNOLOGY
COLLEGE OF HUMAN RESOURCE DEVELOPMENT (CHRD)
BACHELOR OF PURCHASING AND SUPPLIES MANAGEMENT
Neo-institutionalism is also referred to as New-institutionalism. New institutionalism or neo-institutionalism is a theory that focuses on developing a sociological (directed towards social needs and problems) view of institutions the way they interact and the way they affect society. New institutionalism recognizes that institutions operate in an environment consisting of other institutions, called the institutional environment. Every institution is influenced by the broader environment (or in simpler terms institutional peer pressure). In this environment, the main goal of organizations is to survive. In order to do so, they need to do more than succeed economically; they need to establish legitimacy within the world of institutions.
Neo-Institutionalism is an extension of pluralist thinking about the role of ‘rule-making’ in the employment relationship. It sees that the employment relationship is governed by two types of rules:
I. Formal/Informal rules- like an award, contract or agreement.
II. Substantial/ procedural rules- such as custom and practice. Each with their own means of determination and implementation.
These rules are made in a broader context as a result of the forces and imperatives of capitalist social relations in security in the workplace. Neo-Institutionalism understands the present in terms of the past. It understands that today’s activity is the result of previous actions, as affected by more recent events. It seeks to understand the real world; why current situations and behaviors exsist. Real world situations...