Incarnation and decay: reconciling the organizational decision-making and organizational institutional theory perspectives on budgetary research

Purpose The organizational decision-making perspective (ODM) has a legacy regarding its concern for budgeting as an essential organizational routine in decision-making. Budgeting has also become a direct concern to organizational institutional theory (OIT) because of its prominent role in institution building, where budgeting can build trust in inter-organizational relationships. This paper builds on these two perspectives to explore organizational budget processes' formation, disruption, and re-creation over time. Design/methodology/approach We conducted a comprehensive review and critical analysis of the ODM and OIT perspectives, focusing on a fundamental paradox between ODM's emphasis on stability through organizational routines and OIT's focus on organizational legitimacy through the decoupled expression of organizational values. We then expanded on these paradoxical concerns in the context of budgeting, formalizing them into specific research propositions for future studies. Findings Tensions around the stability, decay, and re-creation of budgets as organizational routines emerge as a pressing issue requiring further empirical investigation from the ODM perspective. A critical issue in the OIT perspective is the potential for organizational budgets to provide an opportunity to decouple from practice through routinized expressions of rationality and to facilitate loose coupling in practice. These findings offer a fresh perspective and open up new avenues for future research in this area. Originality/value This paper contributes to the accounting and organizational research literature by shedding light on how organizations respond to the potential decay of budget routines and the manifestation of organizational values in decoupling processes by further re-creating and elaborating budget processes.