JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org. This study develops a theoretical framework that integrates institutional and network perspectives on the form and consequences of administrative innovations. Hypotheses are tested with survey and archival data on the implementation of total quality management (TQM) programs and the consequences for organizational efficiency and legitimacy in a sample of over 2,700 U.S. hospitals. The results show that early adopters customize TQM practices for efficiency gains, while later adopters gain legitimacy from adopting the normative form of TQM programs. The findings suggest that institutional factors moderate the role of network membership in affecting the form of administrative innovations adopted and provide strong evidence for the importance of institutional factors in determining how innovations are defined and implemented. We discuss implications for theory and research on institutional processes and network effects and for the literatures on innovation adoption and total quality management.* This paper also contributes to the growing empirical literature on TQM. In one of the few large-sample, academic studies investigating the performance consequences of TQM, Powell (1995a) concluded that most organizational features commonly associated with TQM do not yield significant performance benefits. We offer a theoretical explanation for such findings: when TQM adoption is driven by conformity pressures rather than technical exigencies, firms may realize legitimacy benefits rather than technical performance benefits from adoption. To test this explanation, we simultaneously investigate both the performance consequences of innovation and the legitimacy benefits of conformity by considering whether a transition occurred from one kind of benefit to another as the form of TQM became institutionalized. Researchers in a variety of disciplines have long been interested in identifying conditions TQM As an Administrative Innovation in the Hospital EnvironmentAn innovation is defined as "any idea, practice or material artifact perceived to be new by the relevant unit of adoption" (Zaltman, Duncan, and Holbek, 1973: 158). The tendency for researchers to conceive of innovation as a discrete phenomenon may derive from an emphasis in this literature on technological rather than administrative innovations (Damanpour, 1987 Overall, the hypotheses suggest that conformity to normative TQM adoption should effectively mediate the relationship between time of adoption and the organizational consequences of adoption, such that the time of adoption should predict the degree of conformity, and conformity, in turn, should predict whether hospitals derive primarily efficiency or legitimacy benefits from adoption...

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This study examines how external network ties determine a board's ability to contribute to the strategic decision making process. Although the simple number of director appointments to other boards does not affect board monitoring or advice on strategy, appointments that can provide directors with relevant strategic knowledge and perspective do predict such involvement. In effect, the strategic context of social network ties, not simply the number of ties, is an important influence on corporate governance.

Empirical research has typically rested on the assumption that board independence from management enhances board effectiveness in administering firms. The present study shows how and when a lack of social independence can increase board involvement and firm performance by raising the frequency of advice and counsel interactions between CEOs and outside directors. Hypotheses were tested with original survey data from 243 GEOs and 564 outside directors on behavioral processes and dynamics in management-board relationships. In recent years, corporate stakeholders have expressed increased concern about the inflnence of boards of directors over corporate affairs. Large institutional investors, for instance, have strongly criticized the relationships that are thonght to exist between top managers and outside directors in many corporations. In particular, advocates of board reform have commonly suggested that boards lack independence from top management and tbat tbeir dependence fosters board passivity in the decisionmaking process. This perspective is reflected in the popular media, where it is frequently assumed that social ties between top managers and outside directors (e.g., friendships) diminish board effectiveness; such relationships are often described in pejorative terms as "chummy" or even "collusive" [Wall Street fournal, 1993: Bl; 1995, 1996). Academic research on boards has also devoted increased attention to how CEO-board relationships influence board effectiveness. Empirical researchers have often assumed that a lack of social independence from management can compromise This study was generously funded by the State Farm Gompanies Foundation. I am also indebted to Edward Zajac for providing financial support and assistance on this project. Thanks also to

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