Organizations and Institutions

Examples of organizations include the local supermarket, General Electric, the American Congress, the Catholic Church, the German Constitutional Court, France, and the United Nations. Examples of institutions include the family, constitutions, paper money, the market economy, and transitional justice. Organizations and institutions may be related as “token” and “type,” that is, as an instance of a concept and the concept itself. The stock exchange is an institution (a type), the New York Stock Exchange an organization (a token of that type). The nation-state is an institution, France is an organization. Some organizations, such as the United Nations, are not tokens of any institution, however. Conversely, some institutions, such as the market economy, have no organizational tokens. Special markets, though, such as the market for pollution permits, can be organizations. Although I shall mostly discuss organizations, they are best understood against the background of institutions.

Organizations are collective actors, defined by their capacity for centralized decision making. In some cases, their creation can be traced back to a specific moment in time, such as July 4, 1776, for the United States or October 24, 1945, for the United Nations. In other cases, such as France or the Catholic Church, it is more appropriate to say that the organizations evolved or emerged than that they were created. Although it may be hard to pin down the exact moment at which a loosely structured aggregation of individuals crystallizes into a collective actor with an enduring identity over time, there will be a moment when we can tell that it has happened.