Think (not so) straight, talk (not so) straight

Timothy J. Fogarty

Journal of Accounting & Organizational Change, 2015, vol. 11, issue 1, 73-95

Abstract: Purpose - This paper aims to provide an analysis of the choices Arthur Andersen faced in dealing with the crisis that ultimately let to its downfall in 2001-2002. Design/methodology/approach - The paper is built around institutional theory. Specifically, it applies the propositions provided by Oliver (1990, 1991) to the historical record. Findings - The failure to develop a coherent response, combined with a failure to anticipate the specific role of the state led to Andersen’s inability to navigate the institutional field. Research limitations/implications - The usual limitations of institutional theory are acknowledged. These pertain to the lack of a micro-level analysis, the additional impact of pure economic rationality and the chance that every crisis of faith is unique. Practical implications - The article adds to our appreciation of what not to do in the face of crisis by the government and those in charge of large accounting organizations. Social implications - The article adds to the recently in the news “too big to fail” problem with successful economic agents. Originality/value - The article adds to institutional theory by providing a different story than the usual, where everything is cleverly managed and the crisis is overcome.

Keywords: Organizational change; Professionalization; Accounting regulation; Institutional theory; Accounting and politics (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jaocpp:jaoc-01-2012-0006

DOI: 10.1108/JAOC-01-2012-0006

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