Institutional rationality and practice variation:
New directions in the institutional analysis of practice
Michael Lounsbury
*
University of Alberta School of Business and National Institute for Nanotechnology, 4-30E Business Building, Edmonton,
Alberta, Canada T6G 2E7
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.
Ó 2007 Elsevier Ltd. All rights reserved.
Neoinstitutional theory is one of the most dom-
inant perspectives in organizational analysis (e.g.,
Davis & Marquis, 2005). The uniqueness of this
perspective is rooted in its emphasis on the pri-
macy of culture, highlighting how social structures
of resources and meanings are created and have
important consequences (Lounsbury & Ventresca,
2002). This perspective conceptualizes institutions
as generative of interests, identities and appropri-
ate practice models that take shape in wider
socio-cultural contexts (Dobbin, 1994). In turn,
these broader contexts facilitate cognitive, norma-
tive and regulative pressures that fundamentally
shape organizational behavior (Scott, 2001).
This conceptual approach to organizations and
organizing has provided an important focal point
for behavioral studies of accounting over the past
couple of decades (e.g., Carruthers, 1995; Cooper,
Greenwood, Hinings, & Brown, 1998; Covaleski &
Dirsmith, 1988; Dirsmith, Heian, & Covaleski,
1997; Fogarty, 1996; Fogarty & Rogers, 2005;
Mezias, 1994; Robson et al., 2007). Concentrat-
ing on the institutional dynamics that affect the
0361-3682/$ - see front matter Ó 2007 Elsevier Ltd. All rights reserved.
doi:10.1016/j.aos.2007.04.001
*
Tel.: +1 780 492 1684.
E-mail address: ml37@ualberta.ca
www.elsevier.com/locate/aos
Available online at www.sciencedirect.com
Accounting, Organizations and Society 33 (2008) 349–361