Institutional complexity and paradox theory: complementarities of competing demands

Abstract

Organizational success increasingly depends on leaders’ abilities to address competing demands simultaneously. Scholars have applied both institutional theory and paradox theory to better understand the nature and responses to these competing demands. These two lenses diverge in their understanding and responses to tensions. Institutional theory depicts competing demands emerging from divergent field-level pressures and stresses their contradictory and oppositional nature. Organizational responses vary from making tradeoffs and choosing pressures with which to conform to seeking strategies for engaging both and managing conflict. Paradox theory locates competing demands as inherent with organizational systems, surfaced through environmental conditions, individual sensemaking, or relational dialogue. According to these scholars, paradoxes are contradictory, interdependent, and persist over time, demanding strategies for engaging and accommodating tensions but not resolving them. In this essay, we highlight these distinctions and argue that drawing from both of these lenses will results in rich, generative theorizing to better address key challenges in the world. We identify specific areas where future research can benefit from such integration.