Organizational Sectors and Institutionalization of Job Training ...

Organizational Sectors and the Institutionalization of Job Training Programs: Evidence from a Longitudinal National Organizations Survey

Song Yang, Ph.D. Department of Sociology and Criminal Justice 211 Old Main University of Arkansas Fayetteville, AR 72701

*Direct all correspondence to Song Yang by email at [email protected] or by writing to Department of Sociology and Criminal Justice, 211 Old Main, University of Arkansas, Fayetteville, AR 72701. I appreciate assistances from Erin Kelly, Don Barrett, Joseph Galaskiewicz, Kevin Fitzpatrick, and three Sociological Perspectives anonymous reviewers, whose cogent comments greatly improve the paper. I am particularly grateful for Erin Kelly, who, in addition to providing comments, provided and explained her dataset for this project.

Organizational Sectors and the Institutionalization of Job Training Programs: Evidence from a Longitudinal National Organizations Survey Abstract The proliferation of job training programs among work organizations has been explained with instrumental arguments. However, event history analysis of a retrospective dataset (1967-1997) of 301 American organizations indicates that having an external human resources attorney and facing a number of other organizations with training, two of the mimetic institutional impacts, are the driving factors behind the wide spread of job training programs. Furthermore, these mimetic institutional pressures exert a stronger impact on the training program adoption for governments than for-profit firms. Government agencies appear to be more responsive to institutional influences because compared with for-profit firms, government agencies are in greater need of external legitimacy of their procedures and operations, one of the crucial benefits for being an institutional conformist.

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Introduction The issue of job training has been a popular topic of research debate for decades (Taylor 1911; Becker 1964; Mincer 1962; Mincer 1994; Scott and Meyer 1991; Monahan, Meyer, and Scott 1994; Knoke and Kalleberg 1994; Osterman 1995; Knoke and Ishio 1998; Knoke and Yang 2003). Researchers explain the proliferation of job training programs with different theories. The instrumental explanation, premised on economists’ simplistic idea that choices involve only utility maximization, emphasizes job training as a way to augment workers’ human capital (Schultz 1961). Employers provide training and receive benefits from trained workers whose productivity increases because of the training (Becker 1964). Institutional theory, in contrast, explains the spreading of job training with an emphasis on organization operating environments. Irrespective of its efficacy, employers provide training because it is required by law, persuaded by professional associations, or compelled by their peers (Scott and Meyer 1991; Monahan et al. 1994). This paper strives to understand the adoption and diffusion of job training among U.S. organizations in light of institutional theory. It uses institutional theory to frame an examination of the adoption of job training programs, where the central argument is that to the extent the institutional pressures encourage organizations to provide training, governments and nonprofit organizations are more responsive to those pressures than for-profit firms. The early explanations of the emergence of job training in the workplace stress the instrumental purposes (Taylor 1991), which culminated in the 1960s when a collective effort emerged to study the human capital aspect of labor input (Schultz 1961; Becker 1964; Mincer 1962). Since then, the human capital theorists have offered compelling explanations as to why capital-intensive countries export more of labor-intensive merchandise (Schultz 1961), why

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employers choose to pay for specific training rather than general training (Becker 1964), and why individual workers should be interested in receiving job training (Mincer 1962). The sociological explanation of job training stems from institutional theory (Zucker 1977; Meyer and Rowan 1977; DiMaggio and Powell 1983), which takes a drastic turn away from “overly rationalized” instrumental explanations of organizational structures and programs. Institutional theorists maintain that organizations adopt certain programs and practices to comply with requirements or prevailing norms of operating environments. By conforming to those norms and requirements, organizations smooth transactions with other organizations with similar structures, attract talented personnel, and hence improve their survivability. Various empirical studies lend strong support to institutional arguments. For example, the funding and control structure of the American education system produce complex internal structures of schools and districts (Scott and Meyer 1994a; Meyer, Scott, and Strang 1994; Meyer, Scott, Strang, and Creighton 1994). Federal Equal Employment Opportunity was the driving force behind the proliferation of formal promotion mechanisms after 1964, which was an essential component in later construction of an internal labor market (Dobbin et al., 1993). More cogently, researchers found that organizations adopt training programs without producing preset goals and rarely rigorously evaluate their effectiveness (Monahan, Meyer, and Scott 1994; Saari et al., 1988). Those findings form stark contrasts to instrumental explanations of organization behaviors. Organizations adopt certain practices and work structures in response to legal requirements, prevailing practices, and norms rather than to economic calculation of investment and returns. Following the lead of institutional theory, this research investigates the adoption and the diffusion of job training programs in modern organizations, tracing the spread of the training programs during the last three decades. To the extent that different types of organization react to

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the institutional influences differently, this study examines how institutional pressures propel training diffusion differently across three organizational sectors: for-profit firms, nonprofit organizations, and government agencies.

Human Capital Explanation of Job Training Programs There are many explanations for training proliferation in modern organizations. The economic explanation is a technical or instrumental one. Employers provide training because they provide employees with necessary skills to enhance their job performance. The leading theory in the line of work is human capital theory (Becker 1964; Schultz 1961). Employers decide whether and how much to pay for the training cost, depending on the nature of the training. Employers will not pay for general training that increases workers’ productivity inside and outside the firms because generally trained workers are likely to be poached by other employers. In contrast, employers will incur some costs for specific training that increases the trainees’ productivity only inside the firm. This is because employers can extract some benefits in the form of enhanced productivity from specifically trained workers who have no choice but to stay in the firm. Despite the parsimony and elegance of human capital theory, empirical studies show that employers often will pay for a significant portion of the provision of general skills (Loewenstein and Spletzer 1998). Using a national organizations survey, one study reports that the large majority of employers provided training that was either “to a great deal” or “to some extent” useful to other employers (Knoke and Yang 2003). Those studies have fueled some skepticism about human capital theory and shifted the research focus away from technicality considerations of job training provisions. A new wave of research ensued to investigate the

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factors other than profit maximization that induce employers to provide training. One of the prominent arguments is found in institutional theory, which asserts that modern organizations operate in an increasingly complex environment and have to comply with instructions from different regulatory bodies, abide by persuasions from professional associations, or respond to peer pressures from their partner organizations.

Institutionalization of Job Training Programs Competing with human capital theory, institutional theorists focus on the factors other than profit maximization that induce employers to provide training. Earlier, Meyer and Rowan (1977) stated that organizations adopt certain practices to conform to institutional pressures. Organizations incorporate certain rules to gain legitimacy and resources and to enhance survival prospects. Later, DiMaggio and Powell (1983) discussed three mechanisms that contextual environments affect organizational in-practices. Coercive pressures are from regulatory agencies and law enforcements that impose various regulations with which organizations have to comply. Normative pressures are professional norms that persuade organizations to adopt practices encouraged by professional organizations. Mimetic pressures are prevailing practices adopted by other organizations. Because of the three institutional pressures, organizations in the same field experience structural isomorphism: their in-practice becomes increasingly similar. Some recent work by institutional theorists explains how the diffusion of job training shows the institutional impact at work (Scott and Meyer 1991 and Monahan et al., 1994). Researchers cited various examples to illustrate how coercive, normative, and mimetic institutional pressures fueled a spread of job training programs (Scott and Meyer 1991). In this vein, the Occupational Safety and Health Administration (OSHA) requires that organizations

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provide safety training on a regular basis. The Comprehensive Education and Training Act (CETA) and the current U.S. Job Training Partnership Act provide various financial incentives (e.g., reimbursement and tax break) to induce employers to provide basic training and retraining to unemployed workers. Professional associations and networks have been working to promulgate training practices among their members. In the U.S., the most influential professional body to underwrite training is the American Society for Training and Development (ASTD), which has a large number of local chapters and hosts conferences and workshops to stimulate training provisions. Less clear is how institutional mimicry affects organization adoption of job training programs. Researchers have shown that organizations, when facing uncertainties, are also likely to imitate practices adopted in other workplaces (Galaskiewicz and Wasserman 1989). For example, the quick diffusion of some innovative work practices such as quality of work life and quality circles reflects some of the mimetic effects. Regardless of the efficacy of those work practices, organizations adopt them to enhance legitimacy, to show their willingness to improve work quality, to gain motivation from their workforce, and to achieve a “nice fit” with their environment (DiMaggio and Powell 1983). However, mimicry per se does not necessarily stimulate a company to adopt a training program. An organization operating in an industry with dense peer pressures that do not encourage job training may be apathetic to providing workers with training. To measure this multiplex effect of mimetic institutional pressure, I use three proxy indicators: the number of organizations adopting training each year, the hiring of external human resource (HR) consultants, and the hiring of external HR attorneys. The number of organizations with training programs in the field indicates the amount of peer pressure from other organizations in the operating environment to stimulate training provision. Hiring of an

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external HR consultant or attorney indicates whether an organization stays tuned to changes and initiatives from their peers in the field, as those HR consultants and attorneys are likely to consult and advise many other organizations, thus serving as messengers among organizations. H1: The more the three kinds of institutional forces of coercive, normative, and mimetic pressure that are present, the more likely the organizations will adopt job training programs.

Differentials in Job Training Institutionalization: the Importance of the Organizational Sector Institutional theorists convincingly documented the environmental factors conducive to the adoption and diffusion of training programs (Scott and Meyer 1991). Since 1960s, legal rules backed with sanctions, material incentives, moral suasion and persuasion from professional bodies all fueled the dissemination of training programs. However, organizations across different sectors or industries are responding quite differently to the institutional pressures (Frumkin and Galaskiewicz 2004). Some enthusiastic responders race to adopt the training programs to maintain compliance with the laws and to ensure consistency with their peers, while other apathetic organizations may resist the permeation and withstand the adoption of such programs. However, despite years of studies of job training programs in work organizations, one critical question remains unanswered: how modern organizations respond differently to the institutional pressures in their adoption of job training programs. To address this question, one important issue confronting scholars is how to distinguish meaningfully different organizations and to compare them regarding the impact of institutional pressures on organizational adoption of certain practices. In this vein, a recent work that discusses organizational differences across different sectors is highly relevant (Frumkin and Galaskiewicz, 2004). A crucial standard for placing organizations into different sectors is the

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measurement of organizational outputs. For-profit firms operate on profit maximization and are measured with a whole array of clear-cut indices such as profits, share price, earnings, market share, and growth. Owners and shareholders for business firms aggressively assert control, demand returns to their investment, and squarely dismiss executives whose performances fall below certain thresholds. Generally speaking, there is little ambiguity when it comes to measuring how firms are performing, given the whole set of largely quantified and easily interpreted measurement data. In contrast, nonprofit organizations and governmental agencies operate on a different system. Because nonprofits and governmental agencies do not have owners who have material interest in the performance, they are operating under so-called nondistribution constraint (Hansmann 1980). That is, unlike business firms that can distribute their profits among stockholders, nonprofits and governmental agencies are not allowed to make such distributions but must retain any earnings. Furthermore, nonprofits and governmental agencies produce outputs that are considerably difficult to measure and to interpret. Several factors contribute to such difficulty. Compared with business firms, nonprofits and governmental agencies are more likely to embrace a broad range of goals, many of which are ambiguous and not entirely consistent with each other. The lack of consistent and clear standards makes it very difficult to measure goal accomplishments for nonprofits and governments. Also, because of the nature of the goods and services produced by nonprofits and governmental agencies, their outputs are indivisible (Moore 1995). Little funding and institutional demand exists for serious assessment of their performances. Especially for governmental agencies, their outputs are not measurable until far in the future, and detailed information on how they process task is not under the same kind of scrutiny as business firms.

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Compared with for-profit firms, the relative shortage of unambiguous measures of performance and much sporadic monitoring for governments and nonprofits do not necessarily produce more freedom in their operation. Delays or malfunctions of governments and nonprofits are frequent headlines in major news media. The recent response by the commissioner of USCIS (US Citizenship and Immigration Services) regarding backlog reduction vividly illustrates that governments can be particularly vulnerable to outside criticism. For governments and nonprofits, a lack of performance measures and their ambiguous goals only means they are facing a more difficult task to justify the way they operate than for-profit firms. Often, governments and nonprofits turn to external referents to legitimize their acts (Frumkin and Galaskiewicz 2004). Therefore, to the extent that organizations respond to institutional pressures, governments and nonprofits are much more vulnerable to institutional pressures than are for-profit firms. To organization job training programs in particular, the legal requirement by OSHA, the norms promulgated by ASTD, and the effect of imitation exert different levels of impact on the training programs for governments, nonprofits, and for-profits. As previously noted, because of goal ambiguity and performance-measure difficulty, governments and nonprofits are more eager than for-profits to obtain outside endorsement to legitimize their procedures and operations. Benefits such as reputation, legitimacy, and eligibility for grants (DiMaggio and Powell 1983), which are associated with being an institutional conformist, matter more to governments and nonprofits than they do to for-profits. Thus, to the extent that institutional pressures may instigate organizations to provide job training, governments and nonprofits are more attuned to those influences than are for-profit firms. H2: The Institutional impact on organization training provisions is stronger for governmental agencies and nonprofit organizations than it is for for-profit firms.

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Data To investigate the diffusion and determination of company job training programs, I use the 1997 National Organizations Survey of Human Resources Policies. The principal investigators for this survey are Frank Dobbin and Erin Kelly (for detailed documentation of this dataset, see Kelly 2003). The University of Maryland Survey Research Center conducted interviews with selected organizations. The sampling frame was from the well-known Dun and Bradstreet Market Identifier dataset. Dun and Bradstreet initially provided 1,714 organizations, among which 1,478 establishments with at least 50 employees were declared eligible for the study. This list of 1,478 establishments was stratified by size and industry prior to random sampling selection, which later produced a randomly selected 695 establishments. Interviewers first sent letters out to the 695 establishments, followed by telephone interviews. A total of 389 establishments completed the telephone interviews, yielding a response rate of 56 percent (389/695 = 56%). The research is designed to study the diffusion of various human resources programs, particularly work-family practices, of U.S. organizations over the past 30 to 40 years. Interviewers spoke with establishments’ human resources managers or functionally equivalent personnel who were knowledgeable of the history of the human resources policies. To analyze and compare across sectors, researchers over-sampled public, nonprofit, or large organizations. Researchers used a minimum of 50 employees as a threshold to select establishments because those with fewer than 50 workers are less likely to have written documents of various human resource practices. Consequently, the sample contains employers more likely to keep formalized human resources policies than the general population of employers.

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To trace the diffusion of various human resource practices, the interviewers asked organizational respondents to supply retrospective, over-time data on key variables. For those variables, interviewers asked if the work establishment had ever provided or offered that program. If answered yes, they continued to ask when the program was initiated and when, if ever, it was discontinued. Those responses were used to establish a training timeline, in which organizations received 0 if they had never adopted job training programs till 1997, or 1 for the year when the organization first adopted the program. Other independent variables in the regression analysis are either time-constant (their values do not change with time) or time-variant (their values change with time). For example, organization sectors and organization core occupations are time-constant variables in the model as the survey measured them as such, with a reasonable assumption that established workplaces rarely change their sectors or core occupations. Other variables such as institutionalization, organization age, size, and unionization are time-variant variables that are measured in the survey on the annual (institutionalization measures, age, and unionization) or decade basis (size).

Method The statistical method used in this analysis of company adoption-of-job-training programs is the discrete-time event-history method. The event-history method is concerned with the patterns and correlates of the occurrences of events such as marriages, divorces, crimes, arrests, deaths, or mergers of organizations, and, of course, organizational adoption of training programs. Compared with cross-sectional data analysis, the event-history method produces much compelling evidence of how various casual factors lead to certain events (e.g., organizational adoption of job training program) (for detailed introduction to event-history analysis, see Allison

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1984, 1995; and Yamaguchi 1991). Event-history analyses encompass two types of models: the discrete-time model and the continuous time model. The difference between the two is that the discrete-time model assumes that time can be disaggregated into discrete units such as weeks, months, and years, whereas the continuous-time model assumes that time is measured continuously (Allison 1984). Because the survey measured the first adoption of a training program based on years, I used logistic regression of discrete-time event-history analysis to analyze the determinants of company job training programs. In particular, the model follows

log (Pit /(1- Pit)) = αt + β1 Xit1 + β2 Xit2 + …… βk Xitk where Pit denotes the conditional probability that the unit (individuals, organizations, nations, etc.) i has an event at time t, given that an event has not already occurred to the unit. And t denotes discrete points in time (year in this study) that ranges from 1 to N.

Measures Training provided to core workers (core training) is the dependent variable, measured by a series of questionnaire items: “Apart from on-the-job training, has your organization ever provided core workers with formal training?” If yes, “In what year was this training first provided?” “Is the training still provided?” If no, “In what year was the training program discontinued?” This paper measures training as a one-time event: the year that organizations first provided job training indicates the occurrence of the event. Researchers have defined core workers as those workers with the job title that has the most employees at the establishment (Dobbin and Kelly 1997). Using the responses to those items, I constructed a timeline that describes when organizations first started their job training programs. In the logistic discrete-

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time model of event-history analyses, I arbitrarily established a time frame from 1967 to 1997, mainly because that is when most events are recorded in the survey. For example, the survey traced some key variables, such as organization size, as early as 1967. Organizations are entered into the sample if they first adopted job training in 1967 or after, regardless of when the organizations were founded. Concerning the adoption of core training, the total sample of 389 organizations contains 50 missing cases, 73 never adopted, and 266 reported the year that they first adopted the training. Of the 266 organizations, 228 provided core training on or after 1967. Thus, altogether 301 organizations were entered into the logistic discrete-time regression model, which included 73 organizations that did not adopt the training program till 1997 (right censored), and 228 organizations that adopted training programs during the span from 1967 to 1997. Six organizations out of the 228 cases discontinued their training programs during 1990s. Because the utilized statistic model is discrete-time, event-history analysis, the unit of analysis is organization-year: organizations stayed in the sample until they adopted the job training program during 1967 to 1997. Thus, the total number of cases for job training adoption is 6,522 organization-years, including the 2,263 organization-years from the 73 organizations that had never provided training till 1997 (73 * 31 = 2,263) and 4,259 organization-years from the 228 organizations that adopted job training at any year from 1967 to 1997. The logistic regressions of job training adoption have fewer cases than 6,522 because of the missing cases from other independent variables in the model. In particular, the size variable, measured by asking respondents to report the total number of workers in a given year, contributes to most of the missing cases. For example, out of 301 organizations, 177 did not report their size for 1967, possibly because the informants have not worked at their organizations that long. These 177

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missing organizations are translated into 3,886 missing cases in the final logistic regression based on organization-year. The following paragraphs describe construction of our independent variables. Organizational institutionalization is one of the key independent variables. It encompasses three dimensions: coercive, mimetic, and normative institutionalization. All the questionnaire items asking about these institutionalization measures follow the same routine: first asking whether organizations have received certain programs/practices; if yes, when organizations first received such programs/practices/ and were they still continuing? If no, when were they discontinued? In particular, coercive institutionalization was captured with a question asking, “Has the organization ever had a compliance review by the Office of Federal Contract Compliance Programs?” Mimetic institutionalization was measured with three items: “Has the organization ever used outside human resources consultants?” and “Has the organization ever consulted an attorney for its human resources matters?” and “the number of organizations that adopted job training during any given year between 1967 and 1997.” Here, it should be noted that many studies use cumulative numbers of organizations adopting certain programs (excluding the focal organization) to be measure of mimetic institutional force. Normative institutionalization was indicated by “Is your human resources executive a member of any professional association?” Using those responses, I produced a chronology that documents the spread of various institutional pressures from 1967 to 1997. Organizational sector is another key independent variable, measured with their SIC (Standardized Industrial Classification) codes (http://www.osha.gov/pls/imis/sic_manual.html). Based on their industries, I re-categorize them into three groups: Group 1 (SIC code from 2011 to 8069) has 184 organizations that include manufacturers, business services, and general

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hospitals. These are for-profit firms facing stiff financial constraints and rigorous outcome assessments from internal agents and external investors and corporate communities. Group 2 (SIC code from 8322 to 8399) contains 48 organizations such as social services, vocational rehabilitation services, and residential care. Although these nonprofit organizations do not face the same financial constraints as the for-profit firms, they commonly have tight budgets. Group 3 (SIC code from 9111 to 9199) includes 69 governmental agencies, which are not only the objects of, but also, occasionally, the catalyst to institutional pressures. Organization age is measured by taking the natural log of the actual age of the organization, calculated by subtracting the year the establishment opened from the year the organization first adopted the training programs. Organization core workers are classified according to their occupations with the three-digit 1980 Census Occupational Category, established by the U.S. Bureau of the Census (http://webapp.icpsr.umich.edu/GSS/rnd1998/appendix/occu1980.htm). In particular, occupational codes from 001 to 037 are categorized as managerial occupations (managers and supervisors), 043 to 235 are grouped together as professional/technical occupations (engineers and teachers), 243 to 389 are classified as low white-collar occupations (sales and clericals), and the rest are categorized as manual labor occupations (craftsmen, operatives, laborers, services, and farm workers). Organization unionization was measured with the same routine as that for institutionalization, with a questionnaire item asking, “Are core workers covered by a collective bargaining agreement?” Organization size is measured by the total number of workers in a given year. Because the survey asked only the number of employees at several points -- the year the establishment was founded, 1967, 1977, 1987, and 1997 -- I interpolated the number of employees for other

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years with the available data. In particular, if an organization reported an increase in the number of workers from 100 workers in 1967 to 110 workers in 1977, I computed that, on the average, each year the organization gained one worker by dividing the net increase of 10 workers by the total interval of 10 years. I then estimated the workers number for a given year by adding the total worker increase with the workers number for 1967 (the base year). For example, the worker size for the organization in 1970 was estimated as 103 (3 workers increase + 100 workers in 1967). This computation assumes a linear increase/decrease in worker size during the time spans. In reality, workplaces may experience sudden changes in the size of their workforce. The survey actually accounted for those sudden changes by asking the organizations whether they have experienced a sudden increase or decrease in their workforce, and if so, when and how many workers increased or decreased. Those responses were used to adjust the interpolation of worker size. For example, if an organization reported a sudden decrease of 200 workers in 1995, the worker size for that organization in 1995 was its predicted size minus 200 workers.

Findings With a unique longitudinal dataset of national organizations survey, I investigate the proliferation of training programs and how organizations respond to institutionalizations differently. To document the process in which job training program spreads among different organizations, I compute the percentage of organizations providing job training during several historical periods, using the number of organizations with training programs divided by the total number of organizations existing during the time period. For example, prior to WWII, a total of 12 establishments had core-worker training programs among the 116 organizations that existed then, producing a rate of 10.34 percent. In contrast, by 1997, 266 organizations among the total 389 establishments reported their adoptions of training programs, producing an adoption rate of

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68.38 percent. I then disaggregate the sample into three types: for-profit firms, nonprofits, and governmental agencies. Figure 1 shows that, in general, American workplaces, regardless of their sectors, have increasingly adopted job training programs. More strikingly, some discernible disparities emerged among organizations in the speed of such proliferation. For-profit manufacturers and private firms, indicated by the line of “for-profit” in the graph, started almost at the same level as governmental agencies in the proportion of organizations with training programs before WWII. However, the rate of increase in the proportion of organizations with training since then is lower for for-profit firms than it is for governmental agencies. Such a gap has been expanding since the 1960s that by 1997, more than 78 percent of governmental agencies have adopted job training programs, in contrast to only 64 percent of for-profit firms. In contrast, the diffusion of job training programs among nonprofit organizations has taken a different route. Before WWII, none of the nonprofit organizations adopted training programs. However, the rate of adoption of training programs for nonprofits has been increasing drastically since the 1960s. By the 1980s, the percentage of nonprofit organizations with training programs exceeded that of for-profit firms. During the 1990s the rate of increase in the number of organizations with training programs in nonprofits declined slightly. By 1997, more than 69 percent of nonprofit organizations adopted job training programs, which is higher than for-profit firms (64 percent) but lower than governmental agencies (78 percent). The study of the proliferation of job training programs identifies the 1960s, 1970s, and 1980s as the turbulent time that the adoption rates for the three types of organizations underwent drastic changes. During those three decades, governmental agencies expanded their lead of training adoption rate over for-profit firms. Nonprofit organizations had been accelerating their adoption rate of training programs until the 1990s. By the 1980s, their rate was higher than that

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of for-profit firms. Correlated to those changes are some significant events in the institutional environment pertaining to job training. The ASTD, though founded in the 1940s, adopted its official name of the American Society for Training and Development in 1964 to reflect its expanded focus on raising the standards and prestige of the industrial training profession and furthering the professional’s education and development (Galagan 2004). In the 1970s, the Occupational Safety and Health Act created the OSHA to administer safety and health regulations and to monitor workplace code compliances (Dobbin and Sutton 1998). One of the central missions of OSHA is to encourage employers to provide sufficient training to workers, administered through its Office of Training and Education (OTE) division. The descriptive finding here suggests that to the extent the promulgations of those laws and regulations incited employers to adopt training programs, government agencies and nonprofit organizations responded to those requirements stronger than did for-profit firms. Figure 1 is about here

To explain the diffusion of job training programs among a diverse set of organizations from 1967 to 1997, I conducted logistic regression with the longitudinal dataset, which is one of the discrete-time, event-history analysis techniques (Allison 1984; Allison 1995). In a partial support of H1, the results show that institutional pressures instigate organizational job training programs. Table 1 shows that for the entire sample, two of the measures for the mimetic institutional effect exert significant impact on core training provision. In particular, organizations using an external human resources (HR) attorney have 108 percent (Exponential (0.733) – 1 = 1.08) higher odds to provide core-worker training than are organizations without an external HR attorney. Each increase in the number of organizations with training increases the odds of core

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training provision by 0.8% (Exponential (0.008) – 1 = 0.008). However, coercive or normative institutional pressures do not increase the odds of core training provision. To investigate how institutional impact on organization core-worker training varies across different organizational sectors, I disaggregate the sample into three sub-samples: governments, nonprofits, and for-profits, and conduct regression analyses separately for each sample. Table 1 shows striking results that support H2. The use of external HR attorneys exerts the strongest impact on the training programs of governments but insignificant impact on nonprofit organizations or for-profit firms. Compared with government agencies without external HR attorneys, governments using external HR attorneys are more than seven times more likely (Exponential (1.969) – 1 = 7.16) to provide core-worker training than governments without external HR attorneys. Furthermore, in stimulating organizations to provide core training, the number of other organizations with training exerts the strongest impact on governmental agencies but weakest impact on for-profit firms. The impact on nonprofits falls in the middle. Each increase in the number of other organizations with training increases the odds of training provision by 1.5% (Exponential (0.015) – 1 = 0.015) for government agencies, by 0.9% (Exponential (0.009) – 1 = 0.009) for nonprofits, and by 0.4% (Exponential (0.004) – 1 = 0.004) for for-profit firms. Table 1 is about here.

To ascertain whether the differences in regression coefficients are significant across the three organization sectors, I applied the statistical analyses of Comparisons Across Populations (Knoke et al., 2002: 278-281). The diagonal values in Table 2 are the regression coefficients of external HR attorneys (the upper numbers) and the number of other organizations with training

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(the lower numbers) for each sub-sample in Table 1. The numbers in cell entries that coordinate two sectors are the differences of their coefficients. Table 2 shows that among those comparisons, the differences between governments and for-profits on both variables are significant. The impacts of external HR attorneys and of the number of other organizations with training programs on core-worker training provision are significantly stronger for governments than for for-profit firms. Those results indicate that to the extent that mimetic pressures induce organizations to adopt formal training for their core workers, governmental agencies are much more responsive to the effect than for-profit firms. Table 2 is about here.

Discussion Modern organizations operate in a complex environment that defies easy explanation. Institutional theorists, by emphasizing legitimacy (DiMaggio and Powell 1983; Scott and Meyer 1994b; Scott 2001), structural decoupling, ceremonial myth, and symbols (Meyer and Rowan 1977), have redirected the focus of organization studies. Representing a major departure from competing theories, such as transaction costs economics (Williamson 1981) and resource dependence theory (Pfeffer and Salancik 1978), institutional theorists insist that organizations often act without conducting a simple cost-benefit analysis. The apparent deviant behaviors, however, are perfectly rational if one considers the operating environments that constantly impose various norms, sanctions, regulations, and persuasions on organizational internal practices (Scott and Meyer 1994b). By complying with those norms and regulations, conformist organizations achieve a better fit with their environment, gain reputations, smooth transactions, and attract talented individuals (DiMaggio and Powell 1983).

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Using a national longitudinal dataset of a diverse set of American workplaces, this study established that organizations yield to institutional pressures by adopting training programs to their core workers. This study demonstrates that, in terms of training provisions, employers respond well to mimetic pressures but poorly to coercive and normative pressures. The absence of effects of legal requirements and governmental regulations on organization adoption of job training may reflect the lack of strict enforcement or severe punishment for non-conforming organizations. Researchers have documented that cuts in enforcement led employers to evade the law (Dobbin and Sutton 1998). The spotty enforcement of laws and regulations, plus the nonuniversal coverage of those laws often produce compromises and inadequacies in code compliance and legal abidance. Studies vividly illustrate that in response to weakened enforcement of ERISA and OFCCP, employers cutback pension funds (Achenbaum 1986) or eliminate their affirmative action programs (Bureau of National Affairs 1986). For the lack of normative effect on training, being a member of professional associations (normative measure) exposes HR managers to a whole range of topics and challenges. Training may not be the focus among those topics, and the broad scope and encompassing contents may dilute managerial attentions. This study finds that organizations respond to mimetic pressures to different degrees. Governmental agencies are the most vulnerable to the mimetic influences, compared with nonprofits and for-profit firms. This finding remarkably concurs with other theoretical discussions (Scott 1994) and empirical results (Frumkin and Galaskiewicz 2004) that institutional effects do not affect organizations identically. Although it remains to be seen whether the patterns shown here are also applicable to other organizational in-practices, this research alerts institutional scholars to reassess the roles institutionalization can play. To various

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organizations, the benefits of gaining legitimacy and a reputation for being an institutional conformist are evaluated very differently. For-profit firms, with clearly preset goals and highly measurable outcomes, weigh heavily on the efficacy but pay less attention to institutional influences when it comes to establishing a program. In contrast, governmental agencies, with ambiguous goals and less measurable products, tend to be more responsive to institutional pressures to obtain their much-needed benefits of legitimacy and reputation. Institutional theorists open a new phase in organizational analyses by drawing attention away from the traditional explanation of organizational behaviors based on atomic (seeing organizations as stand-alone entities) and economic rational models. Modern organizations are embedded in an increasingly complex environment that fundamentally changes many taken-forgranted organizational practices. Moreover, institutional effects are variable in affecting organization’s in-practice; they are potent in some organization sectors but attenuate in others. This study uses institutional theory to understand the permeation of training programs in modern organizations. It strikingly demonstrates that in adopting training programs, governmental agencies are not only the makers and advocators of institutional regulations but also the most enthusiastic responders to the institutional forces. Researchers now achieve great understanding of how organizations make decisions on training, thanks to decades of studies drawn from the early economics human-capital model to more recent sociological institutional theory. However, institutional environments, expressed as the legal requirement, normative pressures, and prevalent practices in the field, are constantly changing. This study should evoke a critical awareness of the differences between for-profit firms and government agencies in their responses to their changing institutional environments; findings of how business firms react to their environment are not readily generalizable to

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government agencies. Furthermore, the differentiation in worker training can occur at a deeper level of program implementation than the superficial presence or absence of a program. One study reported that organizations created specialty departments or programs to signal code compliance not because the institutional environments dictated that they do so but because they did not tell them what to do (Dobbin and Sutton 1998). This finding suggests that organizations may embrace great variations in their actual implementations of their training programs. For example, organizations may ceremonially adopt the training program without a forceful implementation of it to all workers. One way to measure organizational implementations of their training programs is by examining their training investment levels. As the institutional pressures compel more and more organizations to adopt the training programs, examining the actual implementations of the programs should be the next important research topic. For example, this research should inspire more studies on how the institutional influences on organization training investment are significantly different between for-profit firms, nonprofits, and government organizations. Admittedly, the issues being investigated here are complex ones. One of the key findings indicative of mimetic institutional impact is that organizations conform to modal practice: the more the other organizations with training program, the more likely the organization adopt such program. However, the finding can also reflect that organizations are responding to a common factor in the environment such as restricted supply of labor, rapid technological change, and an economic downturn. In addition, the finding that using an external HR attorney affects training adoption, whereas using an external HR consultant does not, suggests that organizations may use training as a legitimate means to resolve labor problems. Unfortunately, the lack of economic and environmental control variables that reflect those allegations prevents this study from

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assessing empirically those confounding factors. With pertinent data, prospective studies can be much more assertive on the issues raised in this study (e.g., whether the relationships reported in this study still hold, net of the impacts from the alleged economic and environmental mediating factors). When the above suggestions are implemented, future research should be able to shed additional light on the fundamental issues about organization job training programs.

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References: Achenbaum, Andrew. 1986. Social Security: Visions and Revisions. Cambridge, New York: Cambridge University Press Allison, Paul. 1984. Event History Analysis: Regression for Longitudinal Event Data. Beverly Hills, Calif.: Sage Publications Allison, Paul. 1995. Survival Analysis Using the SAS System: A Practical Guide. Cary, NC : SAS Institute Becker, Gary. 1964. Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education. New York: National Bureau of Economic Research. Bell, Daniel. 1973. The Coming of Post-Industrial Society: a Venture in Social Forecasting. New York: Basic Books Brown, Charles. 1990. “Empirical Evidence on Private Training” Research in Labor Economics 11:97-113 Bureau of National Affairs. 1986. EEO Policies and Programs PFF Survey No. 141 Washington D.C.: Bureau of National Affairs Cohen, Bernard. 1989. Developing Sociological Knowledge: Theory and Method. Chicago, IL: Nelson-Hall DiMaggio, Paul and Walter Powell. 1983. “The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields” American Sociological Review 48/2:147-160 Dobbin, Frank and John Sutton. 1998. “The Strength of a Weak State: The Rights Revolution and the Rise of Human Resources Management Divisions” American Journal of Sociology 104/2:441-476 Dobbin, Frank and Erin Kelly. 1997. “Human Resource Policies Questionnaire” Unpublished Codebook Manuscript Dobbin, Frank, John Sutton, John Meyer and Richard Scott. 1993. “Equal Opportunity Law and the Construction of Internal Labor Markets” American Journal of Sociology 99/2:396427 Duncan, Greg and Saul Hoffman. 1979. “On-The-Job Training and Earnings Differences by Race and Sex” The Reviews of Economics and Statistics. 61/4: 594-603

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Frumkin, Peter and Joseph Galaskiewicz. 2004. “Institutional Isomorphism and Public Sector Organizations” The Journal of Public Administration Research and Theory 14: 283-307 Galagan, Pat. 2004. “The Past 50 Years” American Society of Training and Development (ASTD) online publications at http://www.astd.org/astd/About_ASTD/ASTD_history.htm Galaskiewicz, Joseph and Stanley Wasserman. 1989. “Mimetic Processes within an Interorganizational Field: An Empirical Test” Administrative Science Quarterly 34/3:454-479 Hansmann, Henry. 1980 “The Role of Nonprofit Enterprise” Yale Law Journal 89:835-901. Haveman, Heather. 2000. “The Future of Organizational Sociology: Forging Ties among Paradigms” Contemporary Sociology 29/3:476-486 Kelly, Erin. 2003. “The Strange History of Employer-Sponsored Child Care: Interested Actors, Uncertainty, and the Transformation of Law in Organizational Fields” American Journal of Sociology 109/3:606-649 Knoke, David, George Bohrnstedt, Alisa Potter Mee . 2002. Statistics for Social Data Analysis. Itasca, Ill.: F.E. Peacock Publishers Knoke, David and Song Yang. 2003. “Fattenin' Frogs for Snakes? Company Investments in Job Skills Training” Research in the Sociology of Work 12:3-30 Knoke, David and Yoshito Ishio. 1998. “The Gender Gap in Company Job Training.” Work and Occupation 25:141-67. Knoke, David, and Arne Kalleberg. 1994. “Job Training in U.S. Organizations.” American Sociological Review 59:537-46. Loewenstein, Mark and James Spletzer. 1998. “Dividing the Costs and Returns to General Training” Journal of Labor Economics 16/1:142-171. Meyer, John, Richard Scott and David Strang. 1994. “Centralization, Fragmentation, and School District Complexity” Pp 160-176 in Institutional Environments and Organizations : Structural Complexity and Individualism, edited by Scott, Richard and John Meyer Thousand Oaks, Calif.: Sage Publications. Meyer, John, Richard Scott and David Strang and Andrew Creighton. “Bureaucratization Without Centralization: Changes in the Organizational System of U.S. Public Education, 1940-1980” Pp 179-205 in Institutional Environments and Organizations : Structural Complexity and Individualism, edited by Scott, Richard and John Meyer Thousand Oaks, Calif.: Sage Publications.

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Meyer, John and Brian Rowan. 1977. “Institutionalized Organizations: Formal Structure as Myth and Ceremony” American Journal of Sociology 83/2:340-363 Mincer, Jacob. 1994. "Human Capital: A Review." Pp. 109-41 in Labor Economics and Industrial Relations: Markets and Institutions, edited by Clark Kerr and Paul D. Staudohar. Cambridge, MA: Harvard University Press. Mincer, Jacob. 1962. "On-the-Job Training: Costs, Returns, and Some Implications." Journal of Political Economy (Supplement) 70:50-79. Monahan, Susanne, John Meyer and Richard Scott. 1994. “Employee Training: the Expansion of Organizational Citizenship” Pp 255-269 in Institutional Environments and Organizations : Structural Complexity and Individualism, edited by Scott, Richard and John Meyer Thousand Oaks, Calif.: Sage Publications. Moore, Mark. 1995. Creating Public Value. Cambridge: Harvard University Press. Osterman, Paul. 1995. “Skill, Training, and Work Organization in American Establishments.” Industrial Relations 34:125-46. Pfeffer, Jeffrey and Gerald Salancik. 1978. The External Control of Organizations: a Resource Dependence Perspective. New York, NY: Harper & Row Rumberger, Russell. 1984. “The Incidence and Wage Effects of Occupational Training among Young Men” Social Science Quarterly 65/3:775-788 Saari, Lise, Terry Johnson, Steven McLaughlin and Denise Zimmerle. 1988. “A Survey of Management Training and Education Practices in U.S. Companies” Personnel Psychology 41/4:731-743 Schultz, Theodore. 1961. “Investment in Human Capital.” American Economic Review 52:1-17 Scott, Richard. 2001. Institutions and Organizations. Thousand Oaks, Calif.: Sage Publications Scott, Richard. 1994. “Institutional Analysis: Variance and Process Theory Approaches.” Pp 81100 in Institutional Environments and Organizations: Structural Complexity and Individualism, edited by Scott, Richard and John Meyer Thousand Oaks, Calif.: Sage Publications Scott, Richard and John Meyer. 1991. “The Rise of Training Programs in Firms and Agencies: An Institutional Perspective” Research in Organizational Behavior 13:297-326

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Scott, Richard and John Meyer. 1994a. “Environmental Linkages and Organizational Complexity: Public and Private Schools” Pp 137-160 in Institutional Environments and Organizations: Structural Complexity and Individualism, edited by Scott, Richard and John Meyer Thousand Oaks, Calif.: Sage Publications Scott, Richard and John Meyer. 1994b. “Development in Institutional Theory” Pp 1-8 in Institutional Environments and Organizations: Structural Complexity and Individualism, edited by Scott, Richard and John Meyer Thousand Oaks, Calif.: Sage Publications Taylor, Frederick. 1911. The Principles of Scientific Management. New York: Harper. U.S. Department of Labor, Occupational Safety & Health Administration. 1987. Standard Industrial Classification. Washington, DC: U.S. Government Printing Office. (http://www.osha.gov/pls/imis/sic_manual.html) U.S. Bureau of the Census. 1981. 1980 Occupational Classification Washington, DC: U.S. Government Printing Office. (http://webapp.icpsr.umich.edu/GSS/rnd1998/appendix/occu1980.htm) Williamson, Oliver. 1981. “The Economics of Organization: The Transaction Cost Approach” American Journal of Sociology 87/3:548-577 Yamaguchi, Kazuo. 1991. Event History Analysis Newbury Park, Calif.: Sage Publications Zucker, Lynne. 1977. “The Role of Institutionalization in Cultural Persistence” American Sociological Review 42/5:726-743

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Figure 1: Proliferation of Job Training Programs Among U.S. Organizations

P e rc e n ta g e o f O rg s w ith T ra in in g

100 90 80 70 60 50 40 All orgs

30 For-profit

20

Nonprofit

10 0

Government

Before 1945

1960-1969 1945-1959

1980-1989 1970-1979

YEAR

29

1990-1997

Table 1: Unstandardized Coefficients of Logistic Regression of Organization Core Training Provision 1967-1997: Discrete-Time Model of Event-History Analysis All -3.538*** (.483)

Constant Organization Sectors Government Agencies (tc) Nonprofit (tc) For-profit (tc and REF.) Institutionalization Federal Compliance (coercive, tv) Professional Association (normative, tv) External HR Consultant (Mimetic, tv) External HR Attorney (Mimetic, tv) # of orgs with training ( Mimetic, tv) Independent Controls Organization Age (tv) Organization Size (tv) Unionization (tv) Core Occupation (managerial, tc) Core Occupation (professional/technical, tc) Core Occupation (low white-collar, tc) Core Occupation (REF.: manual labor, tc) χ2 (df) Valid Cases (year-establishment)

Governments Nonprofits -3.489** -3.738** (1.210) (1.361)

.421 (.240) .723** (.258) ---

For-profits -3.569*** (.668)

---

---

---

---

---

---

---

---

---

.202 (.220) .223 (.236) .290 (.216) .733** (.268) .008** (.003)

.122 (.443) .093 (.576) .773 (.441) 1.969* (.684) .015** (.005)

.850 (.664) .546 (.688) .909 (.582) .332 (.648) .009* (.004)

.500 (.297) .341 (.328) .583 (.396) .319 (.401) .004* (.002)

-.270 (.184) -.026 (.084) -.323 (.243) .552 (.308) .014 (.264) .042 (.287) --56***(13) 2600

-.236 (.188) .019 (.132) -.130 (.481) .498 (.617) -.339 (.691) -.369 (.518) --23*(11) 665

.138 (.245) -.140 (.263) .445 (.682) .455 (.824) -.899 (.552) -.082 (.994) --13(11) 340

-.401*** (.113) -.026 (.146) -.559 (.668) .855 (.453) .335 (.398) .110 (.415) --39***(11) 1595

*p < .05, **P < .01 *** p