The first embedded mode of reasoning to be examined is institutional rationality. Its significance lies in its critique of a universalistic concept of rationality. Interrogating the fiction of the disembedded individual, it recognizes that ‘the rational individual is, and must be, an organized and institutionalized individual’. An institutional rationality acknowledges that there are different spheres of society reflected in the major institutions that organize social life (government, law, the family, religion, etc.), and that of these each has its own inherent or immanent logic. The individual is thus embedded in different institutional modes of reasoning. This chapter outlines the extent to which this institutional rationality has been recognized in organization theory.
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