Is the failure caused by the loss of logic of appropriateness?

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Abstract

It is a puzzle that the institutionalization of institutions has not yet been well explained. The present study gives an answer by explaining why the accrual accounting (AA) practices introduced to public entities (PEs) in Sri Lanka failed through an empirical explanation of the loss of logic of appropriateness of the institution (i.e., AA practices) and the institutionalization (i.e., implementation process). Accordingly, institutional theory becomes the theoretical scope of this study. Engaging the longitudinal study for 26 years (1999–2025), the study espoused the interpretive stance, case study strategy, and theoretical deductive thematic analysis method. The data collection was carried out among the purposive sample cases. The sample cases selected are from the initiating agency, the implementing agency, the divergent voice, and the controlling agency. The study is significant since it explores that the logic of appropriateness has been lost at all the rostrum of institutionalization, causing an overall insignificant pressure to the PEs, and hence the AA reform failed in Sri Lanka. The study concludes that the failure of AA reforms is due to the loss of logic of appropriateness of the institution and the institutionalization.

Keywords: Institution, Institutionalization, AA Reform

Authors’ individual contribution: Conceptualization — N.N. and N.S.J.; Methodology — N.N.; Software — N.S.J.; Validation — N.N.; Formal Analysis — N.N. and N.S.J.; Investigation — N.N.; Resources — N.S.J.; Data Curation — N.N. and N.S.J.; Writing — Original Draft —N.N.; Writing — Review & Editing — N.N. and N.S.J.; Project Administration — N.N.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: H83, M41, Z18

Received: 09.10.2025
Revised: 07.01.2026; 21.01.2026
Accepted: 23.02.2026
Published online: 25.02.2026

How to cite this paper: Nagendrakumar, N., & Jayasundara, N. S. (2026). Is the failure caused by the loss of logic of appropriateness? Corporate Ownership & Control, 23(1), 65–71. https://doi.org/10.22495/cocv23i1art6