The paper raises theoretical insights against central premises underlying the policy of parental choice and educational market from the standpoint of the institutional theory of organization. It discusses how the institutional theory may explain the barriers to diversity, responsiveness, and improvement, all of which are assumed to be driven by the implementation of parental choice reform at the school level, and it looks at what this perspective says about rational decision-making. In general, institutional elements such as conformity to institutional rules, isomorphism, decoupling, and loose coupling argued to prevail in schools seem to be obstacles for many educational processes and outcomes 'promised' by advocates of parental choice and market in education. Implications for the study of parental choice and educational marketing are suggested.