Unleashing the Technical Core: Institutional Theory and the Aftermath of Arthur Andersen

ABSTRACT:  This paper uses the template of institutional theory to explore the impact of organizational de-legitimation on its technical core. To operationalize this, social network theory is used to guide an exploratory study of the diaspora of Andersen employees. The results suggest an unusually high degree of entrepreneurial activity is unleashed once the confining legitimacy of the organizational structure is dissolved. It also shows that the value of social capital possessed by Andersen professionals changed in character and possibly increased in value. The paper offers contributions to institutional theory and the practice of modern accounting.