Complexity and Dual Institutionality: The Case of IFRS Adoption in Russia


  • Anna Alon

Address for correspondence: Anna Alon, Rollins College, 1000 Holt Ave-2723, Winter Park, FL, 32789-4499, FL, USA. E-mail:


Manuscript Type


Research Questions/Issue

The widespread adoption of International Financial Reporting Standards (IFRS) by many transition economies is expected to contribute to greater transparency in financial reporting. However, the business environment in many of these countries is associated with institutional voids and ongoing economic and institutional change. Organizations operating in this environment face considerable institutional complexity due to influences from incongruent institutional logics of local and global institutions. This study investigates how organizations manage institutional complexity created by the incompatible institutional logics which are linked to IFRS adoption.

Research Findings/Insights

In Russia, institutional change related to IFRS adoption was not revolutionary as IFRS did not replace Russian Accounting Standards (RAS) but both standards coexist. Based on a sample of 1,236 firms, organizational identity and the discretion in standard implementation were identified as factors that play a role in how organizations manage institutional complexity created by the coexistence of both standards.

Theoretical/Academic Implications

With organizations in transition economies increasingly managing global and local pressures, this study highlights conditions under which practices rooted in conflicting institutional logics coexist and create dual institutionality. Dual institutionality occurs when distinct but related practices that organizations are using have legitimacy but are rooted in diverse institutional logics and coexist due to different levels of discretion associated with their implementation. This concept is distinct from previously identified institutional duality, where competing institutional logics of subsidiary and the host country influence how a particular practice is implemented by organizations.

Practitioner/Policy Implications

While adoption of IFRS is expected to contribute to greater financial transparency and comparability, some countries choose to continue with the local standards while permitting or requiring IFRS. This type of parallel adoption may undermine the influence of IFRS. However, divergence between the logics and discretion in standard implementation makes it possible for both practices to exist.