How democratic internal law leads to low cost efficient processes : Practices as a medium of interaction between institution and organization

Purpose – Does democracy within the firm have a positive influence on its economical and managerial efficiency? What sort of democracy do we consider, for what sort of efficiency? Tracing back competitiveness to rights and statutes is particularly difficult because of the multiplicity of involved factors and looks like a multidisciplinary challenge. This paper attempts to address these issues. Design/methodology/approach – The paper presents an in the field research, conducted inside a French retailing bank, followed by an analysis of the findings using as well constitutional law theory, organizational routines theory and practice theory. Institutional features are here analyzed through Hauriou's institutionalism and Turpin's constitutional law theory, whereas organizational routines are described through a triadic model (ostensive aspect, performance and artifacts) proposed by Pentland and Feldman. Findings – The main result of the study is to show how interconnected practices taking place inside the firm play the role of a medium of interaction between the organizational and the institutional dimensions of the firm. Originality/value – This leads the authors to consider the possibility of building a “constitutional theory of the firm” according to which some political constitutional law inside the corporation may favor virtuous or noxious circles linking universes of virtues on one side and organizational practices on the other side.