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Think (not so) straight, talk (not so) straight: Andersen’s failure to navigate its institutional environment

Timothy J. Fogarty (Accountancy Department, Case Western Reserve University, Cleveland, Ohio, USA)

Journal of Accounting & Organizational Change

ISSN: 1832-5912

Article publication date: 2 March 2015




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.


The paper is built around institutional theory. Specifically, it applies the propositions provided by Oliver (1990, 1991) to the historical record.


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.


The article adds to institutional theory by providing a different story than the usual, where everything is cleverly managed and the crisis is overcome.



Fogarty, T.J. (2015), "Think (not so) straight, talk (not so) straight: Andersen’s failure to navigate its institutional environment", Journal of Accounting & Organizational Change, Vol. 11 No. 1, pp. 73-95.



Emerald Group Publishing Limited

Copyright © 2015, Emerald Group Publishing Limited

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