The making and remaking of organization context

TLDR

Institutional theory is a dominant perspective in organization theory and increasingly applied in accounting research, yet it has inadequately theorized the institutionalization process and the socio‑political context of institutional formations. The authors propose a social‑theory based framework to ground and expand institutional theory so as to more fully articulate institutionalization processes. The framework integrates institutional theory, structuration theory, and Max Weber’s insights to outline the context and processes involved in creating, adopting, and discarding institutional practices. The expanded framework better depicts socio‑economic and political contexts and directly addresses the dynamics of enacting, embedding, and changing organizational features and processes, thereby enabling a more comprehensive representation of accounting as an object of institutional practices and clarifying accounting’s role in institutionalization.

Abstract

Institutional theory is becoming one of the dominant theoretical perspectives in organization theory and is increasingly being applied in accounting research to study the practice of accounting in organizations. However, most institutional theory research has adequately theorized neither the institutionalization process through which change takes place nor the socio‐political context of the institutional formations. We propose a social theory based framework for grounding and expanding institutional theory to more fully articulate institutionalization processes. Specifically, we incorporate institutional theory and structuration theory and draw on the work of Max Weber in developing a framework of the context and the processes associated with creating, adopting and discarding institutional practices. We propose that the expanded framework depicts the socio‐economic and political context better and more directly addresses the dynamics of enacting, embedding and changing organizational features and processes. Expanding the focus of the institutional theory based accounting research can facilitate a more comprehensive representation of accounting as the object of institutional practices as well as provide a better articulation of the role of accounting in the institutionalization process.