The rules of the game: the humanly devised constraints that structure human interaction. They are made up of formal constraints (such as rules, laws, constitutions), informal constraints (such as norms of behavior, conventions, self-imposed codes of conduct), and their enforcement characteristics.
The term "institution" refers to the rules of the game, whereas "organization" refers to players of the game.
In sociology it is almost an assumption that the relevant agents are ultimately embedded in their society - phenomena are described at the social level and their impact on individual behaviour is sometimes considered. Cognitive science has the opposite perspective - the individual's behaviour and processes are primitive and the social phenomena may emerge as a result of such individuals interacting.
Institutional Economics // American Economic Review, vol. 21 (1931), pp.648-657. By John R. Commons