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We explore attention to Clinton's health care reform proposal, ongoing debates, and its political demise to develop theory that explains how events create opportunities for cognitive realignment and transformation in institutional logics. Our case analysis illustrates how a bottom-up process of environmental sensemaking led to the emergence and adoption of a logic of managed care, which provided new organizing principles in the hospitals' organizational field. In addition to theorization, highlighted by prior research, we propose a second mechanism of environmental sensemaking: representation of change through exemplars and environmental features. The interplay between theorization, representation, and ongoing event attention can lead to change in institutional logics over an event's life course. We found that the managed care logic did not emerge in a fully formed fashion, but that actors theorized individual dimensions of the logic consistent with changing representations of hospitals' relationships with other actors in the field. As the event unfolded, the individual dimensions came to be theorized as part of an overall managed care logic. The label “managed care,” previously understood as a specific organizational form, took on a new meaning to symbolize the organizing principles for hospitals' relationships with a variety of institutional actors as alternative models not congruent with the changing organizational field were abandoned.

organization science

Event Attention, Environmental Sensemaking, and Change in Institutional Logics: An Inductive Analysis of the Effects of Public Attention to Clinton's Health Care Reform Initiative