At the boundaries of institutional theorizing: Individual entrepreneurship in episodes of regulatory change

We analyse the institutional dynamics surrounding the establishment of independent audit oversight in Germany from 1997 to 2016. Complementing prior works, which have focused on countries where the global demand for independent regulation coincides with the domestic erosion of public trust in professional self-regulation, we investigate regulatory change in a context featuring strong trust in the accounting profession. To analyse the accounting establishment’s response to expanding global standards of accounting regulation and the escalating resistance of small accounting firms, as orchestrated by one individual, we mobilize a Bourdieusian field perspective and the literature on institutional entrepreneurship. By demonstrating how intra-professional conflict has increasingly eroded the establishment’s capital to reproduce its hegemonic field position and keep the regulator at distance, our case provides a counterpoint to prior research, which suggests that oversight is mainly the product of negotiations between a unified profession and the regulatory authority. Examining a rare instance of individual entrepreneurship also enables us to engage in a theory-testing process on the explanatory power of institutional ambiguities—the subjectively perceived ruptures and contradictions within established social arrangements—for agency. Our findings suggest that ongoing encounters with institutional ambiguities result in varying disposition to activism. In this way, while acknowledging agency as a cause of field reproduction and change, our analysis shifts attention towards the relational, temporal, and transformational institutional dynamics that constitute distinct modes of agency. By identifying empirical residuals that seem to escape theorization, we also reveal the limits of institutional theorizing.