Institutions exist to reduce uncertainty. An institutional framework is made up of two types of systems. What are the systems? Choose two.

A firm represents a specific type of organization or business entity rather than a type of system within the institutional framework. While firms operate under both formal and informal systems, they do not independently constitute the two types of systems that shape institutions.

Cognitive systems refer to the mental frameworks and beliefs that individuals use to interpret and understand their environment. While they influence behavior within institutions, cognitive systems are not classified as formal or informal systems in the context of institutional frameworks.

Personal systems pertain to individual behaviors and preferences, which vary widely among people. These systems do not fall into the categories of formal or informal systems, as they are more subjective and do not represent the structural elements that institutions rely on to mitigate uncertainty.

Normative systems involve shared values and norms that guide behavior within a group. While they play a crucial role in shaping informal systems, normative systems are not synonymous with the broader classification of informal and formal systems that comprise the institutional framework.