Under Pressure - Higher Education Performance Agreements as Strategic Responses to Institutional Pressures

When organizations are more different, they face less competition, and when they are more similar, they are perceived more legitimate. Studies show that strategically balancing being different and being similar help private organizations perform better (Deephouse, 1999). But what occurs when governments implement policies aimed at balancing difference and similarity among public organizations? This paper explores how public organizations respond to government policies introduced to address diversity and similarity, using performance agreements as a case. Performance agreements, introduced in many Western countries to diversify the higher education sector (de Boer et al., 2015), may paradoxically lead to both homogeneity and heterogeneity. Integrating Oliver's (1991) theory on strategic responses to institutional pressures with theories on homogenization and heterogenization (DiMaggio and Powell, 1983; Erlingsdottir and Lindberg, 2005), the study analyzes performance agreements across Norwegian higher education institutions. Norwegian higher education represents a highly structured organizational field, making it an ideal context for examining the processes that drive both homogenization and heterogenization (DiMaggio and Powell, 1983: 147). In Norway, performance agreements were introduced in the higher education domain, first for 5 organizations as pilots in 2016, followed by 5 more organizations in 2018 and then for the remaining 11 organizations in 2019. Renegotiated agreements were introduced for all organizations in 2022. Performance agreements can be viewed as responses to institutional pressures, as they resulted from negotiation processes between individual higher education organizations and the Ministry. The paper examines differences and similarities in these agreements and their underlying causes, aiming to extend institutional theory and contribute to the theoretical discourse on implementation of policy instruments and their unintended consequences.