In an organization, institutional barriers typically carry the blame for various types of discrimination, including racism, gender discrimination, age discrimination and other types of selection not based on performance. While outright actions that engage in such discrimination are illegal in a number of situations under U.S. labor law, institutional barriers represent organizational resistance to letting someone from a particular group or demographic move upward, usually through the promotion process. Since such issues often lie beneath the surface, possibly to avoid overt evidence, those negatively impacted by institutional barriers may use hiring and promotion statistics to make their cases in legal arenas.

Organizational Practice

An institutional barrier is an intentionally established rule or practice that repeatedly and regularly puts a specific group of people with a common feature or trait at a disadvantage versus others.

Employment Barriers

Institutional barriers to employment in the post-civil rights, movement era have moved past many of the traditional issues such as race, gender or religious background. Current institutional barriers tend to affect those who can’t perform at 100 percent. A common example involves employees who want to start families. Many young people put career first in their early years to get ahead. Once financially stable, they think about having children. However, promotion tracks award those who don’t take time off and always put in the extra effort, often making it impossible for young parents to get promoted.

Another example can be decision-making locations. For example, if some employees cannot perform well on the golf course or don't drink alcohol, they could be shut out of important discussions in corresponding environments.

Changing Business Practices

Change frequently evokes resistance, and business is no exception. Institutional barriers exist in organizations that challenge new ways of doing business. Despite the rationale of a promising new method, say, more efficiency or better benefits, organizations may resist such changes in favor of tried and true older ones. Sustainable construction is one such example in which new building methods may be shunned and traditional methods used instead.

Government Barriers

Government has typically been seen as an institutional barrier and an impediment to progress or movement, particularly in the form of regulatory oversight. Too much regulation and related bureaucracy can bog down processes in endless paperwork and delays. The balance of regulation for the purposes of community protection versus free market control is regularly adjusted through the political process.