291 ECONOMIC AND BUSINESS REVIEW | VOL. 17 | No. 3 | 2015 | 291-312 INSTITUTIONAL CHANGE AS A RESULT OF INTERNATIONAL ACCREDITATION: BUSINESS SCHOOLS OF LITHUANIA AFTER THE IRON CURTAIN YELENA ISTILEULOV A 1 Received: 28 November 2014 DARJA PELJHAN 2 Accepted: 23 June 2015 ABSTRACT: This paper studies the effects of gaining international accreditation in business schools (B-schools) in Lithuania. As in other CEE countries, in Lithuania international accreditation has recently become one of the key solutions to achieving legitimacy for B-schools. Due to the lack of research in this area, the aim of this paper is to explore and unveil the reasons for, and the consequences of the accreditation using an institutional theory framework. A multiple case study methodology is used to answer the research questions. The findings reveal that accreditation effects represent a case of institutional isomorphism, because B-schools seek accreditation to achieve legitimacy rather than improved performance. B-schools decide for accreditation and implement it mainly because of bandwagon effects and the reduction of information asymmetry – reasons which are accompanied by all three types of isomorphic change (coercive, mimetic, and normative). Based on the findings, the study concludes by suggesting propositions to be tested in future studies to further investigate this under-researched topic, especially in the CEE region. Keywords: institutional change, isomorphism, business schools, international accreditation, case studies JEL Classification: B15, I23, M16 DOI: 10.15458/85451.8 1. INTRODUCTION Since the 1990s, Central and Eastern Europe (CEE) has become the region of experiments to test the applicability of existing theories in management studies (Meyer & Peng, 2005). According to Koźmiński (2008, p. 8-9), CEE markets were integrating, competition was becoming global, and “corpocrats” were substituted by entrepreneurs. Among the coun- tries of the CEE, Lithuania has experienced a growth in tertiary education since the 1990s (Robert & Saar, 2012). It faced a shift from public to private higher education, with ques- tions about the legitimacy of this process (Suspitsin, 2007). International accreditation became a key solution toward the legitimacy of business schools (B-schools). However, as its effects on B-schools have been under-researched, we study this in our paper using the case of Lithuanian B-schools. 1 University of Ljubljana, Faculty of Economics, PhD student, Ljubljana, Slovenia,e-mail: yelena.istileulova@gmail.com 2 University of Ljubljana, Faculty of Economics, Ljubljana, Slovenia, e-mail: darja.peljhan@ef.uni-lj.si ECONOMIC AND BUSINESS REVIEW | VOL. 17 | No. 3 | 2015 292 Deans of B-schools ranked accreditation as the second most important event in the world for the last 20 years after the issue of globalisation (Thomas H. Thomas, L. & Wilson, 2013). In the quest for legitimacy, accreditation practices started spreading throughout CEE countries during the first decade of the new century, with a growing number of dis- cussions about accreditation influence on B-schools in CEE. Global distribution of ac- credited schools shows that the CEE region is still behind many other regions in terms of accredited schools (Bruner & Iannarelli, 2011). In the absence of adequate research in CEE, this practice has been both criticised and praised. It also raised related questions: Do international accreditation bodies from the W est change the B-schools in the East through their accreditation standards? Does the “quality label” which comes from the West have any value for B-schools in the East? What impact does it have on business education, and, therefore, on the transformation of the whole generation of future managers? International accreditation of business education is available from various organisations (AACSB, EFMD, AMBA, CEEMAN, etc.). Each agency is perceived by B-schools as a certain quality differentiator because of their individual standards. The strongest CEE B-schools usu- ally seek to gain a W estern-European “quality label” from the EFMD (European Foundation for Management Development) with its institutional EQUIS or programme EPAS accreditation. The leading European B-schools are engaged in promoting EQUIS as a means for providing a better comparison, and to defend European values by having a consistent system (Wedlin, 2010; Hedmo et al. 2006). The institutional accreditation of the Central and East European Management Development Association (CEEMAN) has become popular among the B-schools of CIS and Baltic countries. On one hand, CEEMAN recognises the different starting points of B-schools in transition economies; but on the other hand, this accreditation is based on the EQUIS scheme with funding through the EU (PHARE, TACIS) programmes (Lock, 1999). As Hommel (2009a) summarises, CEE B-schools have created a platform with CEEMAN to foster networking as an intermediate step toward AACSB and EQUIS accreditation. The purpose of our paper is to present and discuss findings from B-schools on their experi- ence of international accreditation in Lithuania based on the institutional theory frame- work. We conduct our study using a multiple case study methodology exploring the effects of EPAS, EQUIS, and CEEMAN accreditations. We argue that the benefits of using multiple cases are in enabling a broader exploration of research questions and theoretical elabora- tion, where cases are used to create propositions to be tested in future studies (Eisenhardt & Graebner, 2007). On a theoretical level, this study integrates the current knowledge of ac- creditation of how it is introduced and perceived with its specifics in CEE, and discusses the relationship between coercive, normative, and mimetic isomorphic forces within the insti- tutional theory’s framework. On an empirical level, the study shows accreditation effects on changes in B-schools, drawing on the evidence from field studies with an analysis based on the triangulation of methods (interviews, questionnaire, and archival data). We found that accreditation effects represent a case of institutional isomorphism because B-schools seek accreditation to achieve legitimacy rather than improved performance. B-schools decide for accreditation and implement it mainly because of bandwagon effects and also a reduction of information asymmetry reasons which are accompanied by all three types of isomorphic change (coercive, mimetic, and normative). Our results might help B-school Deans, top- Y. ISTILEULOVA, D. PELJHAN | INSTITUTIONAL CHANGE AS A RESULT OF INTERNATIONAL... 293 managers, and policy makers to enhance the legitimacy through accreditation of different quality differentiators. Moreover, providing a framework for research on accreditation, this paper contributes a template for studying accreditation effects in other regions of CEE by suggesting propositions to be tested in future studies. The remainder of the paper is structured as follows. A literature review with research questions is presented in the next section. Section 3 describes the research methodology. Section 4 shows and discusses the findings, indicating propositions for future research. The paper concludes with further research implications of our study. 2. LITERATURE REVIEW The focus of our paper is on the legitimacy of accreditation practices in CEE B-schools using an institutional theory framework to explore the changes surrounding accredita- tion implementation. We start from the point that there is a visible absence of research on CEE B-school changes as a result of external accreditation. The pilot study research by Istileulova and Peljhan (2013) shows how the process of business accreditation is gradu- ally spreading in Commonwealth of Independent States (CIS) countries with certain preferences. The Graduate School of Management SPbU (St. Petersburg University) is the only school with EQUIS accreditation for all of Russia and the CIS, which had a resident population of 276 million people in 2014. Due to the missing academic studies in this field, many authors urge for more research. For example, Suspitsin (2007) recommends more comparative research on private education in post-Soviet countries. Hodge (2010) proposed replicating case study analysis on international accreditation using the institu- tional theory. Baker (2011) advocates study of other schools which “provide a more holistic understanding of how educators perceive accreditation. ” Williams (2011) recommends un- dertaking “a research opportunity that studies the perceptions” of accreditation in Higher Education Institutions (HEIs). Beard (2006) and Cooper et al. (2014) suggest exploring accreditation’s related changes with qualitative methodologies, especially case studies. Spinoza (1883) gave a classical definition of knowledge stating that we can say we know something when we understand it through its causes: what causes it, why and how they came to be. Bearing that in mind, the main focus of our study is drawn from the following research questions: · Why do B-schools introduce international accreditation? · What are the changes taking place in B-schools as a result of accreditation processes? · How do B-schools perceive accreditation in terms of benefits versus costs? In the paper, we use the institutional theory framework to explore the forces that influence B-schools to enhance their legitimacy by accreditation. Institutional theorists suggest that organisations (i.e. formal social units, in our case B-schools 3 ) become more similar over 3 From here on the word ‘organisation’ (B-school) refers to organisation as a formal social unit (FSU), i.e. an economic organisation, a firm. When we are talking about organisational changes that happen in processes and structures we are in fact addressing the internal organisation of a B-school. For more on the distinction between FSU and its internal organisation see Mihelčič (2012). ECONOMIC AND BUSINESS REVIEW | VOL. 17 | No. 3 | 2015 294 time because of a normative process that rewards similarity (Newman, 2000). Organisa- tions that adapt to institutional pressures are more likely to obtain scarce resources and have higher survival chances by gaining legitimacy (DiMaggio & Powell, 1991; Newman, 2000). Institutional theorists view change as a continuous process in which the drivers of change are strong extra organisational norms (such as accreditation standards) about what constitutes appropriate organisational goals and structures (Newman, 2000). Here the ob- jective of change is greater legitimacy (B-schools seeks approval from others), not a better performance (Ashworth et al. 2009). There are two types of changes, organisational and institutional (Newman, 2000). In this context, institutional change has a broader mean- ing: it transcends organisational change to focus on entire classes of organisations serv- ing different societal functions (business, education, government) (Halal, 2005). In order to understand institutional change in B-schools with ongoing accreditation in Lithuania, we have to study organisational changes on the level of each B-school. Organisational changes refer to the changes of processes and structures that happen because of accredita- tion ‘pressure. ’ Arroyo (2012) argues that practice is considered as institutionalised at: (1) the organisational level (the level of each B-school), when the new practice is taken-for- granted; and (2) the field level (the level of all accredited B-schools), when diffused by other organisations or highly accepted with a normative quality. DiMaggio and Powell (1983) address three isomorphic forces driving institutional change: (1) coercive isomorphism as a result of political influence and the need for legitimacy; (2) mimetic isomorphism as a standard response to uncertainty by imitation; and (3) norma- tive isomorphism as a result of professionalisation. While the three isomorphic effects can be distinguished conceptually, in reality they are difficult to untangle (Guler et al. 2002). We describe isomorphic forces as follows. First, ‘coercion’ means that organisations adjust their structures and procedures to or- ganisations on which they are dependent (Dobbins & Knill, 2009). In the HEIs, coercive mechanisms include the influence of accreditation agencies, legislation, and the influence of research funds or partners (Decramer et al. 2012). In other words, coercive isomor- phism is the result of formal and informal pressures exerted on B-schools by accrediting agencies, and in B-schools substantial legitimacy is achieved through ‘triple accreditation’ (Wilson & McKiernan, 2011). Some governments in CEE (the Czech Republic, Serbia, Macedonia) have linked school rankings with accreditation, to decide whether a particu- lar HEI should be formally recognised (Hazelkorn, 2014). Second, the concept of mimetic isomorphism means that organisations copy others that seem to be successful (McGurk, 2012). Mimetic isomorphism refers to the imitation of structures and practices of other organisations to manage uncertainty (Jen-Jen & Ping- Hung, 2011). Mimetic change means that schools are becoming similar because of the content, frequency, and depth of assessments by accreditation agencies (Wilson & Thom- as, 2012). Mimetic isomorphism is very close to bandwagon effects – when B-schools seek accreditation because of the social and economic pressures, not because of its efficiency (Hodge, 2010). Bandwagon theories are grounded in institutional theory, managerial pro- cess, and agency theory, where they argue that firms tend to imitate their rivals regardless Y. ISTILEULOVA, D. PELJHAN | INSTITUTIONAL CHANGE AS A RESULT OF INTERNATIONAL... 295 of value-enhancing (Pangarkar, 2000). The bandwagon gets rolling due to the number of other organisations (e.g. B-schools) that are doing the same thing. Abrahamson and Rosenkopf (1993) differentiate between “institutional bandwagon,” when non-adopters fear appearing different from many adopters and “competitive bandwagon,” when non- adopters fear below-average performance if many competitors profit from adopting. Third, the force of normative isomorphism considers the influence of the state, regulatory bodies, or professional organisations on B-schools via expectations or standards, admis- sion requirements, programme contents, international orientation, and when organisa- tions (B-schools) in CEE use similar logics with “guidelines provided by professional or- ganisations” (Bandelj & Purg, 2005, p. 6; Wilson & McKiernan, 2011). As Suspitsin (2007, p. 23) suggests, accreditation “may be considered a normative mechanism” because it is not defined by laws. A normative mechanism’s function is a filter of the certified personnel: professionalisation and socialisation effects are significant (Horii, 2012). It is derived from shared obligations and codes of conduct (Jen-Jen & Ping-Hung, 2011). In addition, there is an issue of asymmetric information: the relationship between the future student and the school (where accreditation is a signal for students to “buy” the degree) and between the B-school and employee (with incomplete information and merits for each) (Hodge, 2010). In this case, accreditation reduces information asymmetry to at- tract more local and international students (Ba & Pavlou, 2002). In our paper, we investigate the changes that occur as a result of accreditation processes in B-schools. As changes are compliant with isomorphic pressures (Ashworth et al. 2009), we assume that B-schools are implementing changes as a result of accreditation processes. For example, EQUIS accreditation is often seen as an instrument of organisational strategic development and the way to force schools to change and improve. Although DiMaggio and Powell (1991) emphasise the explanatory potential of institutional theory in its “silent area” of organisational change’s analysis, little attention has been paid to the details of or- ganisational change when it happens in response to isomorphic pressures (Ashworth et al. 2009). In Table 1, we present some views on changes as a result of accreditation. Table 1. Literature review on changes as a result of accreditation based on institutional theory Author(s) / Study/ country Type of change Results 1. Ashworth et al. 2009. Conceptual & empirical paper, UK MI forces: copy activities, structures. CO forces: political influence on changes. NO norms describe effect of standards. A. impact is visible in structures, culture, strategy, content. There is evidence of convergence due to isomorphic forces. The biggest effect on strategy, culture. 2. Ba & Pavlou, 2002. Research, U.S.A. IA with a trust-building mechanism A. reduces IA, costly policy brings higher prices ECONOMIC AND BUSINESS REVIEW | VOL. 17 | No. 3 | 2015 296 3. Barman & MacIndoe, 2012. Empirical paper, U.S.A. NO: adoption of measurement is influenced by networks, accreditation. CO by resource provider: the greater change, the more organisations are salient to its adoption. CO: organisations in a field share characteristics over time. 4. Casile & Davis-Blake, 2002. Empirical paper, U.S.A. The impact of NO change has generally not been studied. Private schools are more sensitive than public schools due to dependency on students’ revenues. Institutional factors had a greater effect on public organisations; technical factors (economic gains from A.) had a greater effect on the private organisations’ responsiveness. 5. Cret, 2011. Three cases of English, French B-schools: UK, France Strategic changes; change of academicians; Quality assurance has to be considered within the institutional frame of CO, MI, NO pressures. There is a link b/n A. and organisational change in B-schools. A. is as a case of institutional isomorphism, and a delegation of power. 6. Fernández-Alles & Llamas-Sánchez, 2008. Theoretical paper, Spain Jump on the BAs of innovation that have been implemented in other countries – the direct motivation for reforms. NO: change as a result of professional associations’standards. BA takes advantage of reform models previously legitimised in other services, countries. NO attempts to protect members’ interests. 7. Horii, 2012. Refugee Survey, The European Union NO force has effects of socialisation, professionalisation, where professional community creates a mechanism of A. Socialisation is associated with networking. Creation of A. is a normative support. 8. Cooper et al. 2014. Illustrative case study, UK A. is identified as a key NO mechanism (formal education, professionalisation) to initiate change. The move to internationalisation is MI pressure. Changes are the result of exogenous institutional pressures from A. There is a need for case studies. Y. ISTILEULOVA, D. PELJHAN | INSTITUTIONAL CHANGE AS A RESULT OF INTERNATIONAL... 297 9. Masrani, Williams, & McKiernan, 2011. The case study, UK CO and NO strategies work to reinforce impact, legitimacy. It is established with CO lobbying, turns to professionalisation in a NO fashion. Isomorphic convergence to homogeneity is evident through MI, NO, and CO (social obligation). 10. McKee et al. 2005. AACSB. Theoretical paper, Canada Uncertainty creates climate for MI. NO forces is important for faculty, deans. Substantive change involves CO, PE role. Key staff hiring from a defined population leads to NO. CO alters resource dependencies and social practice. 11. Paccioni et al. 2008. A multiple-case longitudinal study with mixed approach, Canada Changing mission is a way to change the culture. A. is conceptualized as an ideological control more than CO. The effects of A. on quality, has little impact on employees not involved in process. The A. dynamic is limited to the administrators, while professionals, showed a mixed perception in terms of quality. 12. Teodoro & Hughes, 2012. Models, descriptive statistics paper, U.S.A. Professionalising an agency requires “deep change, ” with new ways of thinking in mission. Advocates of A. claim that the process improves performance (PE). A. may affect organisational culture by socialising employees, by signalling them priorities. Abbreviations used: A – accreditation, NO – normative isomorphism, CO – coercive isomorphism, MI – mi- metic isomorphism, BA– Bandwagon, IA – information asymmetry, PE – performance related issues (reasons, changes). ECONOMIC AND BUSINESS REVIEW | VOL. 17 | No. 3 | 2015 298 The proponents of accreditation explain that, it is “a formal authorising power” (Lejeune, 2011). B-school leaders must decide which accreditation provides value to the school in terms of context, mission, student body, and its aspirations (Trapnell, 2007). EQUIS, for example, focuses on strategic and accountability considerations (Lejeune & Vas, 2009), input factors (infrastructure and qualifications of staff/students, etc.) connected to “qual- ity, ” activities (R&D, executive education), and outcomes (contribution to the community, personal development) (Lejeune, 2011). Benefits promised by accreditation are the fol- lowing: (1) differentiation from the competition; (2) criteria for self-assessment, peer re- view; (3) the ripple effect, where school competitors seek to improve themselves through accreditation (Cornuel & Urgel, 2009; Urgel, 2007). Benefits of accreditation are under- stood “in the context of the pressures of institutional isomorphism and contingent strategies” (McKee et al. 2005). In Table 2, we present advantages and disadvantages of accreditations that are present in the studied Lithuanian B-schools. Table 2. Perceptions of B-schools about EQUIS, CEEMAN, and EPAS accreditation value (as discussed by the referred authors) Accreditation Body Advantages Disadvantages Institutional EQUIS Capabilities: strategizing, changing, branding; quality assessment, contribution to improvement, and brand recognition (Urgel, 2007). Quality of the faculty, com- munity interaction, pro- grammes development, so- cial openness, and ability to acquire resources (Lejeune & Vas, 2009). Quality does not always lead to effectiveness gains, but to legitimacy (Lejeune & Vas, 2009). The cost of accredi- tation is high (Helmig et al. 2010) CEEMAN It has development pro- grammes, adapts interna- tional standards to each school’s mission, environ- ment; it is less costly than EQUIS or AACSB (Mirvis, 2014). It explains how qual- ity can be improved (Mya- soedov, 2013). It is interest- ed in schools with the learn- ing process (Abell, 2012). There are no requirements on activity results (like KPIs) and personnel satis- faction (like “research on satisfaction of personnel needs” required by EFQM or ISO 9001 (Serafinas & Alber, 2007). Y. ISTILEULOVA, D. PELJHAN | INSTITUTIONAL CHANGE AS A RESULT OF INTERNATIONAL... 299 Programme EPAS Help for EQUIS, student re- cruitment, and international mix (Rees, 2009). Catalyst for institutional change, bench- mark, internationalisation, networking, and reputation effects (Hommel, 2009a). Change: curricular design & delivery; obligatory semester abroad; programme inter- nationalisation, corporate interactions (Katkalo, 2009; Hommel, 2009a; Rees, 2009); brand (Hommel, 2009b); quality; and peer-review (Greensted, 2009). EPAS is “a chicken and egg situation”: it will promote an internationalisation of the programme, but to be accredited it has to have al- ready an international per- spective (Greensted, 2009). If EPAS is seen as a distrac- tion from normal activities, EQUIS is a complete takeover (Rees, 2009). To explore our research questions, we conducted a multiple case study on the top-three Lithuanian B-schools in the process of gaining international accreditation. The methodol- ogy is presented as follows. 3. METHODOLOGY Our study is based on the analysis of three cases of private Lithuanian B-schools with three different international accreditation practices, the recent phenomena in CEE. Actually, we cover the whole population of B-schools with international accreditation in Lithuania. Lithuania is the largest country of the three Baltic States with an estimated population of 3 million, the first of the iron-curtain states to declare independence in 1990. In Lithuania, there were a lot of changes in higher education after Lithuania’s independence from USSR in 1990. There were 63,000 students in 13 HEIs in 1990/91, and this number dropped to 54,000 students in 1995/96 (Mockienė, 2004). In the late 1990, Lithuania was the country that had been viewed as lagging behind the other Baltic countries (Jongsma, 2002). The private higher education sector emerged more slowly than in the rest of the CEE region: the first two private institutions were established in 1999, and the higher education sys- tem was diversified with 19 university-type (academies, colleges, seminaries, universities) and 24 non-university-type’ colleges (kolegijos) in 2002 (Mockienė, 2004). Lithuania has moved to a mass higher education with 14 state and 9 private universities over the last 15 years (Mitchel, 2013). The top B-schools were founded 15-25 years ago, right after the “Iron Curtain, ” the sym- bolic, ideological, and physical boundary dividing Europe into two different areas from the end of World War II. Three cases of B-schools are summarised in Table 3. ECONOMIC AND BUSINESS REVIEW | VOL. 17 | No. 3 | 2015 300 Table 3. Three cases of B-schools in Lithuania B-SCHOOLS BMI (BALTIC MANAGEMENT INSTITUTE) ISM UNIVERSITY OF MANAGEMENT AND ECONOMICS IBS (INTERNATIONAL BUSINESS SCHOOL AT VILNIUS UNIVERSITY) YEAR OF FOUNDATION 1999 1999 1989 OWNERSHIP PR I VAT E PR I VAT E PR I VAT E EDUNIVERSAL RANKING 3 PALMS 4 PALMS 3 PALMS ACCREDITATION PROCESS EPAS (2006/2010/2015) EQUIS (IN PROCESS), IQA GRANTED BY CEEMAN (2006/2013) CEEMAN (IN PROCESS) CASE OF PROGRAMME EPAS INSTITUTIONAL EQUIS (IN PROCESS) INSTITUTIONAL CEEMAN (IN PROCESS) PARTICIPANTS OF INTERVIEWS 3 PARTICIPANTS: DIRECTOR GENERAL, COMMUNICATION DIRECTOR, PROGRAMME DIRECTOR 1 PARTICIPANT: SENIOR QUALITY MANAGER DATA FROM INTERVIEWS WITH RECTOR AND QUALITY DIRECTOR (SOURCE: BMDA) 2 PARTICIPANTS: DEPUTY DIRECTOR FOR ACCREDITATION, QUALITY REPRESENTATIVE In our study, we apply an exploratory multiple-case study methodology. Research questions “how” and “why” favour the use of case studies (Yin, 2003, p. 3), with the substantial benefits from using multiple-case studies. The purpose of case study research in business and manage- ment is to use empirical evidence from real people in real organisations (i.e. formal social units) to make an original contribution to knowledge (Myers, 2013). We argue that the benefits of us- ing multiple cases in our study are in enabling a broader exploration of research questions and theoretical elaboration, where cases are used to create propositions to be tested in future studies (Eisenhardt & Graebner, 2007, p. 27; Tellis, 1997). The units of our analysis are represented by the private business schools that go through the processes of international accreditation. Our case study is characterised by the triangulation of multiple data sources, consisting of different data collections techniques (Farquhar, 2012). It is based on the semi-structured in- terviews, the questionnaire 4 , and study of the archival data (external documents and articles 4 Interview protocol and questionnaire can be provided upon request. The questionnaire was pre-tested ear- lier on the B-schools with international accreditation in CEE countries. Y. ISTILEULOVA, D. PELJHAN | INSTITUTIONAL CHANGE AS A RESULT OF INTERNATIONAL... 301 from the B-schools’ web sites). Interviews with B-school representatives were conducted by Istileulova in Lithuania after her participation in the Tempus conference “Putting Bucha- rest’s Conclusions on Track: An Experts’ Role” in June 2012 in Vilnius. The meetings were preliminarily set up and conducted with the participation of the representatives from six B-schools (see Table 3) at their locations. An initial interview protocol was developed to ensure that evidence would be collected on participants’ views related to their experiences and opinions on the accreditation effects. The semi-structured interviews lasted 50 minutes and were recorded and transcribed to ensure accuracy. In addition to interviews, we used the questionnaire to get the standardised data. The questionnaire was distributed and filled in after these interviews. Its purpose was to gather the general data about each school, their familiarity with different types of accreditation, who decided for the accreditation, reasons for its adoption, advantages and disadvantages, the effects of accreditation (on programmes, faculty, strategy), and ongoing changes. We see the value added of this process in gathering complementary information to make our analysis more comprehensive. Eisenhardt (1989) also argues that structured questionnaires and semi-structured interviews are often used together in case studies, where different data collection methods are combined (such as ar- chives, interviews, questionnaires, and observations). Once the data had been collected, collated, and transcribed, interview and questionnaire responses were (manually) coded using the key theoretical constructs, patterns, and excep- tions in the coded data were identified (Miles & Huberman, 1994; Ahrens & Dent, 1998). Patterns that emerged from the data were then compared to the institutional theory frame- work of our study. The results were documented once this process was complete. A similar process of pattern identification was undertaken for questionnaire and archival data. The quality of our research is established using construct validity, external validity, and reliability (Kidder & Judd, 1986). 5 Construct validity refers to establishing correct opera- tional measures for the concepts being studied. The major threats to construct validity are those created by bias either through the process of observing itself or bias introduced by the observation method. The questionnaire used and the semi-structured interviews were carefully constructed and contained questions to elicit information required to investigate research questions and as such, it is assumed that the construct validity is high. When undertaking our multiple case studies, multiple sources of evidence were used, establish- ing a chain of evidence. Also, the draft case study report was reviewed by key inform- ants to increase the construct validity (Yin, 2003). The use of multiple sources enabled verification through triangulation, the strength of case research (Noda & Bower, 1996). An interview protocol ensured that the same themes were covered. Interview data were continually cross-checked with other data sources to enhance the reliability of the case study material. The notion of external validity for case methodology relates to the gener- alisability of the results to the underlying theory. Therefore, this paper’s goal is to expand and generalise theories (i.e. analytical generalization) and not to enumerate frequencies (i.e. statistical generalisation). The generalisation in this study is to the underlying insti- tutional theory. External validity is addressed by using replication logic in multiple case studies (Yin, 2003). Reliability of this study is ensured by using a case study protocol and 5 Internal validity is a concern for explanatory case studies, and is not applied to exploratory case studies such as ours (Baškarada, 2014; Yin, 2003). ECONOMIC AND BUSINESS REVIEW | VOL. 17 | No. 3 | 2015 302 by carefully documenting the procedures (Yin, 2003). This implies that the data collection procedures can be repeated with the same results. 4. RESULTS AND DISCUSSION The results of our study are organised around our three research questions: “Why do B- schools introduce international accreditation?”; “What are the changes taking place in B- schools as a result of accreditation processes?”; and “How do B-schools perceive accredita- tion in terms of benefits versus costs?” We provide the answers from interviews that were conducted with each school’s representatives. Moreover, as we also have the standardised answers from the questionnaire, we are summarising all sources of our results in Table 4. This allows us to comprehensively analyse how the three isomorphic forces (i.e. coercive, mimetic, and normative) combined with bandwagon, information asymmetry, and per- formance implications act in particular cases. After discussing the findings related to a particular research question, we propose propositions that we believe can be a good start- ing point for future studies that are going to be performed in other CEE countries. 4.1 Reasons for introducing international accreditation We investigated what were the reasons for introducing international accreditation and who made the decision about it. In Case 1 (BMI), there were two main reasons for gaining EPAS accreditation. The Direc- tor General explained that the first reason was to focus on the international students and programmes: “Since B- schools have been globalised, we are trying to fight for the interna- tional students. ” The other reason was that the school became “the academic institution, be- ing in a consortium of the leading European partners-schools: Copenhagen Business School, HEC School of Management, the Norwegian School of Economics, and Business Administra- tion Louvain School of Management. Because of that we also try to attract international faculty . . . The market is international, prestigious, and we need to have some knowledge and standard of accreditation. The decision has been made by our partners – the presidents of partners’ schools and the local partners.” In Case 2, the ISM Rector says: “The EQUIS accreditation is our strategic goal; it is the highest quality label for business schools, a demonstration of international recognition. The path to the accreditation is long and will require continuous effort and much investment” (Source: BMDA). According to ISM Quality Director, universities are refocusing their programmes on the competences’ development, integrating the results into quality which is “impossible without a quality-driven culture fostering the University’s values, and the abil- ity to change and excel” (Source: BMDA). At ISM, the detailed interview was provided by the Senior Quality Manager who explained how the decision was made: “According to our strategic plan we had to change our mission by 2015, but it has already been reviewed. The decision about accreditation came from our institutional strategic document, from the top management, by the Board of Directors, and the Y. ISTILEULOVA, D. PELJHAN | INSTITUTIONAL CHANGE AS A RESULT OF INTERNATIONAL... 303 Rectorate. Those who were initiating this process had a very strong strategic view. It will raise our possibilities to attract more students. It is also a sign that the institution is trying to reach the international level, showing that we can also be more flexible.” In Case 3 (IBS), when asked why his B-school decided to follow with the institutional CEE- MAN accreditation, the Deputy Director for Accreditation answered: “The decision at school about international accreditation was made in the strategic plan for 2006-2013 years. CEE- MAN was not even mentioned in that time. In fact, the B-school had proposals to start from AACSB, not from CEEMAN. We checked ISO 9001 requirements with the Bologna process, CEEMAN, and EFMD. The reason we decided to start from CEEMAN is because IBS did not have any active research activities for the last two years. For EFMD and AACSB, the B-school should be much more active in research activities. Top management with lecturers made this decision. We had only part-time lecturers, and this is quite different from other schools. The lecturers are motivated with rewards for every activity – lectures, publications, presentations for TV programme, and we have a very good result.” The reasons to get accreditation were com- mented: “If you want to have a good partnership, you should be accredited for the big partner- ship. Now it is created according to the requirements. The students do not understand the idea of accreditation. The main purpose was to cooperate with the good international partners and improve the reputation on the local and international markets.” From the results (see above and Table 4) we can see that the prevailing effects for introduc- ing accreditation stem from bandwagon effects, coercive isomorphic forces, and reduction of information asymmetry (to attract more local and international students). This proves Hodge’s (2010) view that B-schools seek accreditation because of the social and economic pressures, not because of its efficiency. We can confirm Ashworth et al. (2009), Masrani et al. (2011) and Decramer et al. (2012) findings, that coercive mechanisms include the politi- cal influence of accreditation agencies and the influence of B-schools’ partners. We found out that decisions about accreditation were made at the level of partners (Case 1) and by the top-management (Cases 2 and 3), while the majority of reasons for introducing the ac- creditation stem from the bandwagon effects (e.g. peer and partner pressure). We can also support Cret’s (2011) idea that accreditation is a case of institutional isomorphism, because B-schools seek accreditation to achieve legitimacy rather than improved performance. The only type of isomorphism lacking in the Lithuanian case is normative isomorphism (based on professionalisation). However, that doesn’t necessary mean that it is not present in any other school from CEE. Therefore, we can translate the discussion on “why do B-schools seek international accreditation” in the institutional theory framework as the following propositions for further research, especially in CEE countries: Proposition 1: B-schools seek accreditation to achieve legitimacy rather than performance, efficiency, or quality benefits. Proposition 2: B-schools seek “quality labels” to achieve organisational legitimacy as a re- sult of bandwagon effects. Proposition 3: B-schools seek accreditation in order to achieve legitimacy to reduce infor- mation asymmetry. ECONOMIC AND BUSINESS REVIEW | VOL. 17 | No. 3 | 2015 304 4.2 Changes resulting from the accreditation We examined what changes are taking place in B-schools as a result of accreditation pro- cesses. In terms of the main results of accreditation the BMI (Case 1) wanted to achieve, the Di- rector General said: “It is both external value we want to generate and a quality. We are now in compliance with the best programmes that have been accredited. The brand has a certain value itself. Of course, it is a brand that affects the value, and accreditation means that we are one of the accredited schools.” The Communication Director (BMI) answered: “One of the expectations was to improve the marketing of our programmes, and EPAS also has facilitated the relations with other institutions. The Programme Director (BMI) added: “Our partners had already been accredited with EFMD, AACSB, and we have to compile this standard as well. The fully international content of programmes offered has more focus on the international market. The majority of our stu- dents are coming from the local market, because we are a national school. At the same time, now we are focusing more on the international market.” Regarding the changes that a school had to implement to gain accreditation, there was a com- ment of the Director General BMI): “We did not have anybody who would be responsible for ac- ademic staff and academic affairs, and we had to formalise it. ” The Programme Director added: “We didn’t need to change many things. We did not change our mission, we had to comply with our partners. W e had to introduce only two changes: to create the position “ Academic Affairs” and formalise our quality. We were a newcomer on the market and exceeded expectations.” In Case 2 (ISM), EQUIS accreditation has been perceived as a tool (Senior Quality manag- er): “The tool such as accreditation is a methodology how to organise your structure. It offers good possibilities to structure your institution and to review/study a process. First, we need to deconstruct, and then to organise the logical process. We have discussed which processes create values, which processes supply the value added, and how to manage it. The results are that by having EQUIS we sent a message outside to the international business community on marketing issues, quality, and trademark. We are also moving from national to the inter- national space: students from post-soviet countries, Asia, and from European countries are coming to our programmes.” Regarding the changes that ISM had to implement to gain accreditation the Senior Quality Manager commented: “A systematic process is a pretty new thing, and some programmes should be added, created. In general, we would like to have more students, but… the country is quite small, and the region has to face this problem. We have national indicators to make an improvement and connection with business community, networks, and international net- works. We are the school that wants to differentiate marketing issues, quality, trademarks, and to send a message outside to the business community and universities.” About the changes that IBS (Case 3) implemented, the Deputy Director for Accredita- tion commented: “We did a lot of changes in terms of the strategic process: now it is more Y. ISTILEULOVA, D. PELJHAN | INSTITUTIONAL CHANGE AS A RESULT OF INTERNATIONAL... 305 documented and formalised. We are working based on this scheme: every process is described – how the decision will be monitored, and which impact it makes for the society. The lectur- ers started to work in the groups. We plan to invite the international lecturers, and the busi- ness community should be involved into our research, in the study programmes, during the students’ defences, and to evaluate students. According to the Lithuanian system of higher education, we do not have MBA/EMBA programme, – it is not approved by the Ministry, and legally we do not have a degree programme. If we want to have a programme, we have to register this programme at the level of Ministry as a Master’s degree programme.” Data on changes were gathered also via the questionnaire. The summarised results are in Table 4. A school with the programme accreditation (Case 1) experienced less isomorphic changes compared to schools with institutional accreditation (Cases 2 and 3), where changes were broader in scale and scope. In the case of programme accreditation (Case 1) it was a minimum change, because the B-school was already in the consortium of Western schools, and coercive forces dominated from the very beginning. In the case of institutional accredi- tation (Cases 2 and 3) we found a greater change, with a range of all isomorphic forces. For institutional accreditations (EQUIS, CEEMAN), performance-related issues are also noticeable (more obvious in EQUIS case). The actual ongoing changes for B-schools re- sulting from each accreditation are different in scope and isomorphic forces, depending on the quality differentiator. In the programme accreditation, bandwagon forces are dominant, followed by coercive and mimetic isomorphic changes, and information asymmetry reduc- tion influence. In the cases of institutional accreditation, the total results show that informa- tion asymmetry effects are prevailing, followed by normative isomorphic changes. There are more normative and coercive influences in the CEEMAN case. All cases demonstrate that B-schools expect that accreditation reduces the information asymmetry both on the local market and for their international partners to attract international students. Changing the mission is the way to change the culture (Paccioni et al. 2008). This feature is observable for institutional accreditation in both cases with the difference that in Case 2 it had already been implemented, and in Case 3 – B-school still needs to do this. We as- sume that in Case 1, the culture was already in place due to its formation by the founders, the listed foreign partners located in W estern Europe. This fact also explains the minimum changes implemented due to the programme EPAS accreditation and time for accredita- tion implementation (one year). B-schools expect the accreditation to improve interna- tionalisation process, branding, quality, and reputation, thus confirming findings of other authors (Katkalo, 2009; Hommel, 2009a, 2009b; Lejeune & V as, 2009; Masrani et al. 2011). As Masrani et al. (2011) suggest, accreditation comes with coercive lobbying, but turns to professionalisation, thus increasing legitimacy with an overall institutional change in the Lithuanian market. We expect competitive B-schools to copy the practices of peer within their ‘industry, ’ causing a visible institutional change because of bandwagon effects. Thus, changes from accreditation pressures (normative, coercive, and mimetic) lead B-schools, as well as their environment, to change confirming Arroyo’s (2012) findings. Therefore, we propose the following for further research: Proposition 4: The effects from accreditation pressures (coercive, mimetic, normative) lead B-schools to institutional change. ECONOMIC AND BUSINESS REVIEW | VOL. 17 | No. 3 | 2015 306 4.3 Perception of accreditation in terms of benefits versus cost We explored how B-schools perceive accreditation in terms of benefits versus costs. Data on advantages and disadvantages regarding a particular accreditation were gathered main- ly via the questionnaire. The results are presented in Table 4. However, in Case 1 and Case 2, the school’s representatives added their own comments when conducting interviews. Director General (BMI - Case 1) discussed the pros and cons of EPAS accreditation as fol- lows: “One of the values and advantages is that standards we deliver are in compliance with the international standards. Second, it is a marketing potential and also a market reputation. EPAS brand itself is acknowledged by the clients, the business executives. For the programme being differentiated, the client should understand that BMI with the EPAS accreditation is what others do not have. To promote a brand is a specific requirement of our clients. The dis- advantages are a huge cost, a large amount of work, preparation for the meetings, and you do not have any idea about the process. It took our school one year since the time of application to gain this accreditation.” In Case 2 (ISM), two disadvantages have been marked in the Questionnaire: (1) The process requires considerable human resources to be involved, and (2) The process is long, and the outcome is uncertain. The Senior Quality Manager added: “In terms of disadvantages, it takes a lot of time: attendance of high-level top-management, by academia – they have to spend some extra time. W e started it at the beginning of 2011. W e identified our bottlenecks very clearly: the process was organised in the project way. The most difficult in EQUIS accreditation is to follow the guidelines. From one side, you need to act in a flexible way, from the other side, you should follow your strategy, and you cannot take it according to different methodologies. All method- ologies might be good as a checklist, and we need to understand which point we are in. It is the guidance, and a tool to measure your situation, your achievements. By the nature, we have to put a lot of effort into the connection with the business community. ” Table 4: Summary table from interviews and questionnaire with the codes of isomorphic forces Questions on BMI: EFMD (EP AS) ISM: EFMD (EQUIS) IBS: CEEMAN (IQA) REASONS (Why?) -in compliance with partners of consortium (CO) because they are accredited (MI); partners have AACSB, EQUIS, we have to compile with it (a peer pressure) (BA), other schools do not have it (in- novation) – BA; to attract international students (IA); to generate external value (BA); to facilitate relations with others (BA) - highest quality label, aware- ness of the value (BA) - international recognition (IA); - to attract international stu- dents (IA) - Quality driven culture (PE), - ability to change (PE) - this particular accredi- tation was not in strate- gy of 2006-13, there was another one (BA) - we could not apply for EFMD (CO), because we do not have research activity (but want to obtain accreditation) (BA) - resources (part-time lecturers) (PE) Y. ISTILEULOVA, D. PELJHAN | INSTITUTIONAL CHANGE AS A RESULT OF INTERNATIONAL... 307 DECISION (How?) By partners (internation- al and local) (CO) Top-management, Board of Directors (CO) Top-management (CO) with Faculty FORCES Reason+ Decision BA – 4; CO – 2; IA – 1, MI-1 IA – 2; PE – 2; CO – 1; BA - 1 BA – 2; CO – 2; PE - 1 Expected Results -to improve marketing of the programmes (IA); -EPAS facilitates relations with partners (CO); - being “one of ” accred- ited (NO) - newcomer on the mar- ket (IA), others do not have it (this innovation) (BA) - marketing (IA) - quality-driven culture (PE) - trademark (BA) -expectation for part- nership (NO) -improved reputation (NO) - international market (IA) CHANGES (What are the chang- es?) - create academic unit to meet formal require- ments (MI); - formalised quality in control of processes, poli- cies, procedures (MI) MI - 2 - systematic process (NO); - new academic programmes to be created/added (MI); - connections with business community, networks, interna- tional partners (NO); - increase in the quality of publications (PE); -message outside on quality (BA) - increase in full time employ- ees (NO); - internationalisation of stu- dents (IA); - internationalisation of faculty body (IA); - strengthening resources (fi- nancial) (PE) - increase in number of stu- dents (IA) IA – 3; NO – 3; PE-2; MI-1; BA - 1 - to improve reputation on local market (NO); - a lot of changes in stra- tegic process (CO); - involve faculty, busi- ness community in research (NO); - more formalised (MI); - to review mission (CO); - improve connections with the business com- munity (IA); - increase in the quality of publications (PE); - internationalisation of students (IA); - internationalisation of faculty body (IA) IA – 3; NO-2; CO-2; PE- 1, MI-1, TOTAL RESULTS BA – 5; CO – 3; MI -3, IA – 3; NO – 2; IA- 5; PE – 5; NO-3; BA – 3; MI -1; CO -1. IA – 4; NO – 4; CO – 4; BA – 3; MI – 1; PE - 2 Advantage (Pros) - standards are in compli- ance with international standards (MI) - marketing reputation (NO); - promotion of brand on international market (IA) - a move from national to international space (IA); - a methodology how to organise your own structure (MI); -to structure institution (MI) -to review process from the value-added point (BA) - improved reputation (NO) ECONOMIC AND BUSINESS REVIEW | VOL. 17 | No. 3 | 2015 308 Disadvan- tage (Cons) - high cost; - a lot of work; - we have no idea wheth- er we will gain A. or not - considerable human resourc- es; a lot of time - difficult to follow the guide- lines; - long process, uncertain results - the preparation stage slows down the pursuit of other schools’ goals Benefits MI+NO+IA MI+IA MI+BA+NO Abbreviations: The same as used in Table 1. We found out that the perception of accreditation benefits to enhance legitimacy from “quality labels” is higher than the perception of accreditation cost. The perception of ac- creditation value is mainly associated with the mimetic benefits listed in all three cases, confirming Dobbins and Knill’s (2009) finding that organisations adjust their structures and procedures to organisations on which they are dependent. The perceived benefits of mimetic isomorphic change in the B-school’s structure are accompanied with the reduc- tion of information asymmetry (in the cases of EFMD differentiator) and normative iso- morphism (improved reputation), confirming Hommel (2009a) arguments. Based on our results, we propose the following proposition to be tested in future studies: Proposition 5: Perception of accreditation benefits to enhance the legitimacy from “quality labels” is higher than the perception of the accreditation cost. 5. CONCLUSION This paper explores the effects of implementing international accreditations in B-schools in Lithuania using the institutional theory framework and multiple case study methodol- ogy. Our findings reveal that B-schools decide for accreditation and implement it mainly because of bandwagon effects and reduction of information asymmetry reasons – which are accompanied by all three types of isomorphic change (coercive, mimetic, and norma- tive). The total effects from isomorphic pressures observed in the market are the follow- ing: in programme accreditation bandwagon forces are dominant, followed by coercive and mimetic isomorphic changes, and also an information asymmetry reduction influ- ence. In the cases of institutional accreditation, the total results show that information asymmetry effects are prevailing, followed by normative isomorphic changes. The only case where performance-related issues are observed equally with information asymmetry is the case of EQUIS accreditation. In the case of CEEMAN, there are more normative and coercive influences present. All cases demonstrate that B-schools expect that the acquired accreditation reduces the information asymmetry. They want to reduce it both on the lo- cal market and for their international partners to attract international students. As regards the effects of accreditation on the institutional environment, we argue that competing B-schools follow the behaviour of the closest rivals: if a B-school has already gained ac- creditation, its closest rival will follow the same pattern. We expect rival B-schools to copy the practices of peer within their ‘industry, ’ causing a visible institutional change because of bandwagon effects. Moreover, accreditation is a tool for decreasing information asym- metry – which is proved by our findings. Y. ISTILEULOVA, D. PELJHAN | INSTITUTIONAL CHANGE AS A RESULT OF INTERNATIONAL... 309 The findings from this study with the specifics of the CEE region fit well into the frame- work of institutional theory. While the international accreditation shows the trend of cre- ating isomorphic pressures on B-schools in practice, the cases also illustrate differences within the field. B-schools with institutional accreditation follow the path of changes that is much broader compared to programme accreditation. At the same time, the influence of EFMD is higher compared to CEEMAN. There are three contributions of our study. First, the analysis was implemented in B- schools for three quality differentiators (EPAS, EQUIS, CEEMAN) accreditations, which was not the case in previous studies (Bandelj and Purg, 2005; Beard, 2006; Baker, 2011; Bruner and Iannarelli, 2011; Cornuel and Urgel, 2009; Greensted, 2009; Hedmo et al. 2006; Lejeune and Vas, 2009; Lejeune, 2011). Second, the criteria of institutional theory were applied for international accreditation practices of B-schools, providing a frame- work for future research (Ashworth et al. 2009; Ba and Pavlou, 2002; Casile and Davis- Blake, 2002; Cooper et al. 2014; Cret, 2011; Decramer et al. 2012; DiMaggio and Powell, 1983; 1991; Dobbins and Knill, 2009; Fernández-Alles and Llamas-Sánchez, 2008; Hodge, 2010; Newman, 2000; Paccioni et al. 2008). By suggesting propositions, we set the bases especially for further research in CEE countries, where accreditation practices have just recently appeared in discussion, but lack comprehensive academic analyses (Abell, 2012; Hommel, 2009a, 2009b; Katkalo, 2009; Lock, 1999; Myasoedov, 2013). As this field is still in early stages of research and there is relatively small number of accredited B-schools in CEE, we suggest future studies to start with a qualitative methodology. This will enable more comparative multiple case analysis to further improve the suggested propositions. Third, with the suggested propositions, future studies can focus broader and also study the effects of accreditation in business firms’ related practices as well as further differentiate and untangle the isomorphic effects in practice (Guler et al. 2002). Our study is subject to the following limitations. First, we involved only top-management teams working on accreditation, and omitted other groups. Therefore, we suggest that in further studies on international accreditation, authors include various groups of stake- holders to get more balanced analysis. Second, it is not always clear how to separate (and if this is even necessary) accreditation effects with regard to isomorphic pressures on one hand, and bandwagon and information asymmetry effects on the other. Third, we didn’t cover AMBA and AACSB accreditations, as they haven’t been introduced to Lithuanian B-schools yet. Fourth, we compared B-schools with different types of accreditations (from different accreditation bodies, institutional and programme). Hence, we suggest that fur- ther studies focus on comparison among B-schools with the same type of accreditation. Fifth, we interviewed the informers about the events and intentions in the past. Therefore, we have to mention the possibility of a retrospective bias as a limitation. The main conclusion is that institutional theory is an appropriate framework for studying the effects of accreditation on B-school’s institutional change in various regions of CEE. Therefore, we suggest that further case studies are performed exploring and explaining the institutional change of CEE B-schools with different accreditation quality differentiators based on institutional theory. ECONOMIC AND BUSINESS REVIEW | VOL. 17 | No. 3 | 2015 310 ACKNOWLEDGEMENTS We gratefully acknowledge the comments and guidance we got from the EBR action edi- tor Dr Matej Černe. 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