What makes organizations so similar? We contend that the engine of rationalization and bureaucratization has moved from the competitive marketplace to the state and the professions. Once a set of organizations emerges as a field, a paradox arises: rational actors make their organizations increasingly similar as they try to change them. We describe three isomorphic processes-coercive, mimetic, and normative—leading to this outcome. We then specify hypotheses about the impact of resource centralization and dependency, goal ambiguity and technical uncertainty, and professionalization and structuration on isomorphic change. Finally, we suggest implications for theories of organizations and social change.

The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields (Chinese Translation)

A series of financial scandals revealed a key weakness in the American business model: the failure of the U.S. auditing system to deliver true independence. We offer a two-tiered analysis of what went wrong. At the more micro tier, we advance moral seduction theory, explaining why professionals are often unaware of how morally compromised they have become by conflicts of interest. At the more macro tier, we offer issue-cycle theory, explaining why conflicts of interest of the sort that compromise major accounting firms are so pervasive.

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Conflicts Of Interest And The Case Of Auditor Independence: Moral Seduction And Strategic Issue Cycling

This paper explores how regulatory relationships in the global audit arena are being affected by the current financial crisis. Key policy initiatives and debates are analyzed, along with institutional interactions, in particular between the International Federation of Accountants (IFAC), international regulators and the large audit firms. The events are placed in the context of the new international financial architecture which has developed over the last decade. Using the illustrative lens of bank auditing, questions are asked of the nature and status of audit practice and the regulatory arrangements governing such practice. The paper shows the active nature of the regulatory responses to the crisis and the shifting and competing influences among key regulatory and professional participants in the global audit arena. Emphasis is placed on the need for audit researchers to be sensitive to the developing global financial architecture, and its potential implications for the study of audit practice in different national and international contexts.

The global audit profession and the international financial architecture: Understanding regulatory relationships at a time of financial crisis

Reviews the history of the early development of the accountancy profession in the UK and the USA and describes the organization of professional accountancy bodies in both countries, concentrating particularly on events in the post‐formation period. Identifies the persistent struggle of UK and US accountants with the conflicting phenomena of economic self‐interest and public duty. Shows how professional accountancy in the UK and the USA evolved from internalized disputes to externalized defences of the professional mission. This evolution caused the actions of UK and US accountants to be scrutinized increasingly in public. Researched evidence of recent institutional reaction to such scrutiny is consistent with earlier behaviour associated with formation events. The economic self‐interest of accounting professionals appears continuously to have motivated their actions to protect the public interest.

The professionalization of accountancy

Despite many challenges and highly visible failings, accountants in the U.S. continue to be a selfregulating profession. In large part, this can be attributed to the emergence and acceptance of peer review programs. This paper, using institutional theory as a template, addresses the discrepancies between what this technology promises and what it delivers. The discourse of peer review is reinterpreted to examine its societal consequences and its implications for the future of professional claims.

James B. Helan

Papers

The rationality of doing “nothing”: Auditors' responses to legal liability in an institutionalized environment