New Institutional Theory and AI: Algorithms as a Driving Force of Organizational Isomorphism

Artificial intelligence has firmly entered the collective imagination through books, films, and, more recently, news segments about mass surveillance, job replacement, complete automation, and technological singularity. In a way, the “mythology” around artificial intelligence significantly outgrows the already impressive advancements in the field. Therefore, it is not surprising that such ethos may shape and orient managerial perceptions of the future workplace, organizational design, culture, and norms. Although a mature research program, new institutional theory represents an appropriate lens through which the influence of AI on organizations and organizing can be studied. Conversely, the amount of neo-institutional literature on the topic is extremely scarce. In this paper, we first briefly present the research program, trace its historical development, and introduce the two fundamental concepts: institutional legitimization and isomorphism. Then, we critically review the available scholarly literature on AI and institutionalization. Finally, we discuss potential research questions and methodological challenges of applying neo-institutional insights to the study of artificial intelligence in organizations.