Institutions are "supra-individual", in the sense that they establish a context of identity and mental-framework formation for all individuals, and they create the environment of choice for the current actions of individuals. Further, they exercise an influence that is beyond the control of any particular individual or group of individuals. But at the same time, institutions are constituted at a given time by individuals and their mental frameworks, actions, and interactions with other individuals. This is the thrust of the idea of ontological individualism. This raises an important question for sociological theory: what are the chief mechanisms through which institutions preserve their properties over time and personnel change, and what mechanisms lead to change in institutions over time?
Consider first the ways that institutions influence individuals. Institutions establish the foundations and context of action for individuals as they conduct their daily lives. Individuals at a particular moment have acquired specific mental frameworks through which they envision the environment of action that confronts them, and this mental formation is the result of various concrete institutions: family, mosque, school, military, workplace, media. Each of these institutional settings has the effect of inculcating cognitive and affective frameworks for the individual through which he or she understands the world around him and interacts with it. Likewise, individuals occupy "roles" within diverse sets of social relationships (families, kin systems, bureaucracies). They are to some degree influenced by ambient cultural and normative assumptions that have identifiable effects on their choices and practices. Further, they are located in social networks of various kinds -- professional networks, expertise and educational networks, friendships, kinship networks, political affinity networks, and so on. And it is plausible to think that these "social location" features are sufficient to account for the continuity and persistence of institutions and organizations -- even postulating the assumptions of ontological individualism. It is a fundamental premise of ontological individualism, however, that the behavioral influence of institutions is conveyed by individuals; institutions are not free-standing entities with their own independent ontological status.
Take the idea of a "role" within an organization. When Alice occupies the role of assistant director of purchasing in a mid-sized business, she has specific responsibilities that were conveyed to her at the time of appointment, and reinforced through continuing supervision. She has been trained in the appropriate behaviors and skills of various parts of this role -- through a university program or through the organization's training programs. She has acquired a "practice" of good business management through her education in a business school. She has a normative system that leads her to want to act efficiently and ethically within the definition of her role. At the same time, Alice is not a robot; her desires, plans, and intentions are not wholly defined by her business role and the scheme of business behavior she has internalized. So Alice's actions within the business environment are influenced by expectations, role definition, and supervision -- but they are also influenced by her own goals, desires, and commitments. Alice is not an algorithm, and her conduct is not fully subordinated to the demands of the organization or the features of her role. And knowing that, the creators of the organization have also created mechanisms to enhance conformance -- active supervision, audits, separation of duties to prevent theft, continuing training, team-building exercises, etc.
These constraints and incentives surrounding Alice's behavior as "assistant director of purchasing" are all embodied in the actions and dispositions of other individuals in the organization. Their behavior too is loosely linked to the organization's expectations of them; but taken together, the conduct of supervisors, auditors, fellow workers, higher-level executives, and other participants create a web of interaction and feedback that creates a degree of stability for Alice's behavior. Alice's conduct within the company demonstrates greater consistency than it might otherwise have. It is a "house of cards", in James Coleman's metaphor (link), in which the stability of the structure derives from the confluence of influences of the actions of actors surrounding each individual within the organization or institution. And this in turn accounts for the relative durability and resilience of the organization through perturbance and change of personnel: as new individuals are trained and acclimated into the roles and culture of the organization, the field of action for any particular agent remains relatively unchanged.
This is the thrust of the idea of "methodological localism" -- the idea that the social world is constituted by social actors who are socially constituted and socially situated. By "socially constituted" I mean to refer to the processes of mental and emotional formation through which an infant comes to be a socialized young person and adult. And by "socially situated" I refer to the set of incentives, opportunities, and constraints within the context of which the actor chooses his or her plan of action. Schools, mosques, and families provide an example of the first kind of influence, and the rules and practices of the Congress provide an example of the second kind of influence (for elected members of Congress).
This isn't a sharp distinction, because individuals are purposive at all stages of life, and they continue to develop habits of character and behavior long into adulthood. This means that schools both shape individual children and create an environment in which they pursue their goals; and the Congress both sets pathways of incentive and constraint through which individual members act, and also continues to shape the normative and practical mentalities of the individuals who live and work within its rules. But analytically, it is important to recognize that social arrangements influence individuals at two levels: by contributing to the formation of the cognitive, emotional, and normative frameworks within the context of which they deliberate and act, and by establishing a set of rules, opportunities, and constraints that determine the likely outcomes of the various choices they may consider at particular times.
Here are a few formulations of aspects of this conception of the socially situated individual and the stability of supra-level social structures from earlier posts.
Social actorsAccording to methodological localism, the "molecule" of the social world is the socially constituted, socially situated actor in ongoing relationships with other social actors. (link)
Formation and constitution of individual actors
How are individuals formed and constituted? Methodological localism gives great importance to learning more about how individuals are formed and constituted—the concrete study of the social process of the development of the self. Here we need better accounts of social development, the acquisition of worldview, preferences, and moral frameworks, among the many other determinants of individual agency and action. What are the social institutions and influences through which individuals acquire norms, preferences, and ways of thinking? How do individuals develop cognitively, affectively, and socially? (link)
An institution, we might say, is an embodied set of rules, incentives, and opportunities that have the potential of influencing agents’ choices and behavior. An institution is a complex of socially embodied powers, limitations, and opportunities within which individuals pursue their lives and goals. A property system, a legal system, and a professional baseball league all represent examples of institutions. Institutions have effects that are in varying degrees independent from the individual or “larger” than the individual. Each of these social entities is embodied in the social states of a number of actors—their beliefs, intentions, reasoning, dispositions, and histories. Actors perform their actions within the context of social frameworks represented as rules, institutions, and organizations, and their actions and dispositions embody the causal effectiveness of those frameworks. And institutions influence individuals by offering incentives and constraints on their actions, by framing the knowledge and information on the basis of which they choose, and by conveying sets of normative commitments (ethical, religious, interpersonal) that influence individual action. (link)
Social action takes place within spaces that are themselves socially structured by the actions and purposes of others—by property, by prejudice, by law and custom, and by systems of knowledge. So our account needs to identify the local social environments through which action is structured and projected: the inter-personal networks, the systems of rules, the social institutions. The social thus has to do with the behaviorally, cognitively, and materially embodied reality of social institutions. An institution is a complex of socially embodied powers, limitations, and opportunities within which individuals pursue their lives and goals. A property system, a legal system, and a professional baseball league all represent examples of institutions. (link)
The reality of institutionsIt is important to emphasize that ML affirms the existence of social constructs beyond the purview of the individual actor or group. Political institutions exist—and they are embodied in the actions and states of officials, citizens, criminals, and opportunistic others. These institutions have real effects on individual behavior and on social processes and outcomes—but always mediated through the structured circumstances of agency of the myriad participants in these institutions and the affected society. This perspective emphasizes the contingency of social processes, the mutability of social structures over space and time, and the variability of human social systems (norms, urban arrangements, social practices, and so on). (link)