BEHAVIORAL RESEARCH IN ACCOUNTING American Accounting Association Vol. 24, No. 1 DOI: 10.2308/bria-10176 2012 pp. 181–201 Unleashing the Technical Core: Institutional Theory and the Aftermath of Arthur Andersen R. Drew Sellers Kent State University Timothy J. Fogarty Larry M. Parker Case Western Reserve University 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. Keywords: institutional theory; public accounting firms; entrepreneurial professionalism. INTRODUCTION T he rationale for the existence of organizations in the modern economy rests heavily upon the nexus of contracts metaphor provided by Williamson (1985). Put simply, organizations exist because they provide more efficient solutions to the problem of coordinated action than can be offered by the market or by the clan (Ouchi 1980). Although the relative economies offered by the formation of organizations can change over time, classic economic arguments provide little clarity about the trajectory of change. Other than to argue that new solutions will gravitate toward lower costs, this paradigm has offered a rather static view of the interconnection of economic actors. Joseph Schumpeter, a 20th century economist influenced by sociological traditions, provides a more vivid account. He argues that entrepreneurialism is a persistently disruptive force that brings innovation and technological progress. Old means of solving the coordination problem therefore are constantly under the threat of destruction and replacement. His term, creative destruction, asserts that this dynamic cannot be resisted and should not be stemmed by protective regulation (Schumpeter 1934). The authors thank the anonymous reviewers and the special edition editors for their guidance. Professor Fogarty acknowledges a quarter-century-old intellectual debt to Mark Dirsmith. Published Online: January 2012 181