Institutional rationality and practice variation: New directions in the institutional analysis of practice

https://doi.org/10.1016/j.aos.2007.04.001Get rights and content

Abstract

In this paper, I highlight how popular understandings of neoinstitutionalism as a theory of isomorphism need to be revised as institutionalists have shifted attention towards the study of organizational heterogeneity. As part of this shift, old emphases on arational mimicry and stability have been replaced with new emphases on institutional rationality and ongoing struggle and change. I discuss these new directions and the implications for the study of accounting practice. I argue that given recent efforts by institutionalists to account for actors and practice diversity, there is an important opportunity for dialogue with practice theorists, such as those drawing on Actor Network Theory, and the creation of a more comprehensive approach to the study of practice that attends to both institutional and micro-processual dynamics.

Section snippets

Institutional theory and rationality

While neoinstitutionalism established itself as a theoretical approach emphasizing the importance of broader meaning systems, the power of this perspective has been hindered by formative studies that emphasized how institutional processes were antithetical to more rationalistic accounts. In the study of diffusion, which became the beachhead empirical avenue for the development of institutional analysis, researchers of various stripes detailed how institutional pressures were distinct from

Institutional sources of practice variation

While the early statement by Meyer and Rowan (1977) signaled the study of both homogeneity and heterogeneity, research on the institutional sources of practice variation has only begun to be developed. This is mainly because isomorphic homogeneity was emphasized in subsequent writings such as in the seminal article by DiMaggio and Powell (1983) that focused scholarly attention on the convergence of practices and organizational symbolic structures across organizational fields. Even though the

Implications for the study of accounting practice

Given the popular understanding of institutional theory as a theory of isomorphism, researchers interested in the dynamics and flow of activity patterns have tended to eschew institutional approaches in favor of more grounded forms of intraorganizational research – much of which is drawing on emergent theories of practice (e.g., Chia and Holt, 2006, Gherardi and Nicolini, 2000, Jarzabkowski, 2005, Lave and Wenger, 1991, Nicolini et al., 2003, Orlikowski, 2000, Schatzki et al., 2001, Tsoukas,

Acknowledgements

This paper builds on and extends remarks and arguments made as part of a 2006 Keynote Address at the Interdisciplinary Perspectives on Accounting Conference held in Cardiff, UK.

References (102)

  • Timothy J. Fogarty

    The imagery and reality of peer review in the US: Insights from institutional theory

    Accounting, Organizations and Society

    (1996)
  • Timothy J. Fogarty et al.

    Financial analysts’ reports: An extended institutional theory evaluation

    Accounting, Organizations and Society

    (2005)
  • M. Gosselin

    The effect of strategy and organizational structure on the adoption and implementation of activity-based costing

    Accounting, Organizations and Society

    (1997)
  • Stephen J. Mezias

    Financial meltdown as normal accident: The case of the American savings and loan industry

    Accounting, Organizations and Society

    (1994)
  • Robson

    Transforming audit technologies: Business risk audit methodologies and the audit field

    Accounting Organizations and Society

    (2007)
  • Rikki Abzug et al.

    The fragmented state and due process protections in organizations: The case of comparable worth

    Organization Science

    (1993)
  • M.N. Ahmed et al.

    The evolution of cost-based pricing rules in Britain: An institutional perspective

    Review of Political Economy

    (2003)
  • Thomas Ahrens et al.

    Management accounting as practice

    Accounting, Organizations and Society

    (2007)
  • P. Bourdieu

    Outline of a theory of practice

    (1977)
  • P. Bourdieu et al.

    An invitation to reflexive sociology

    (1992)
  • J. Broadbent et al.

    Organisational resistance strategies to unwanted accounting and finance changes

    Accounting, Auditing and Accountability Journal

    (2001)
  • J. Burns et al.

    Conceptualizing management accounting change: An institutional framework

    Management Accounting Research

    (2000)
  • Chenhall, Robert H. & Euske, K. J. (in press). The role of management control systems in planned organizational change:...
  • R. Chia et al.

    Strategy as practical coping: A Heideggerian perspective

    Organization Studies

    (2006)
  • E.S. Clemens

    The people’s lobby: Organizational innovation and the rise of interest group politics in the United States, 1890–1925

    (1997)
  • Thomas. D’Aunno et al.

    Isomorphism and external support in conflicting institutional environments: A study of drug abuse treatment units

    Academy of Management Journal

    (1991)
  • Gerald F. Davis et al.

    Prospects for organization theory in the early twenty-first century: Institutional fields and mechanisms

    Organization Science

    (2005)
  • Gerald F. Davis et al.

    Corporations, classes, and social movements after managerialism

    Research in Organizational Behaviour

    (2000)
  • Paul J. DiMaggio

    Interest and agency in institutional theory

  • Paul J. DiMaggio et al.

    The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields

    American Sociological Review

    (1983)
  • Frank Dobbin

    Forging industrial policy: The United States, Britain, and France in the railway age

    (1994)
  • Martha S. Feldman

    A performative perspective on stability and change in organizational routines

    Industrial and Corporate Change

    (2003)
  • Martha S. Feldman et al.

    Reconceptualizing organizational routines as a source of flexibility and change

    Administrative Science Quarterly

    (2003)
  • P.C. Fiss et al.

    The diffusion of ideas over contested terrain: The (Non)adoption of a shareholder value orientation among German firms

    Administrative Science Quarterly

    (2004)
  • Neil Fligstein

    The transformation of corporate control

    (1990)
  • Neil Fligstein

    Markets as politics: A political–cultural approach to market institutions

    American Sociological Review

    (1996)
  • Roger Friedland

    Money, sex, and god: The erotic logic of religious nationalism

    Sociological Theory

    (2002)
  • Roger Friedland et al.

    Bringing society back

  • Yves Gendron et al.

    The construction of auditing expertise in measuring government performance

    Accounting, Organizations and Society:

    (2007)
  • S. Gherardi et al.

    The organizational learning of safety in communities of practice

    Journal of Management Inquiry

    (2000)
  • R. Greenwood et al.

    Understanding radical organizational change: Bringing together the old and the new institutionalism

    Academy of Management Review

    (1996)
  • Heather A. Haveman et al.

    Structuring a theory of moral sentiments: Institutional and organizational coevolution in the early thrift industry

    American Journal of Sociology

    (1997)
  • P.M. Hirsch et al.

    Ending the family quarrel: Towards a reconciliation of “Old” and “New” institutionalism

    American Behavioral Scientist

    (1997)
  • Paula. Jarzabkowski

    Strategy as practice: An activity-based approach

    (2005)
  • Matt S. Kraatz et al.

    Causes and consequences of illegitimate organizational change

    American Sociological Review

    (1996)
  • Bruno Latour

    Science in action: How to follow scientists and engineers through society

    (1987)
  • Bruno Latour

    The pasteurization of France

    (1988)
  • Jean Lave et al.

    Situated learning: Legitimate peripheral participation

    (1991)
  • M. Lounsbury

    Institutional sources of practice variation: Staffing college and university recycling programs

    Administrative Science Quarterly

    (2001)
  • Cited by (565)

    View all citing articles on Scopus
    View full text