Objective: Objective: The purpose of this study is to answer the question of how people can change an institution whose rationality and actions are bound to the same institution.
Methods: In this review article, using the keywords, institutional system, human action, institutional changes, innovation, knowledge creation, institutional environment, institutional changes, institutional hysteresis and searching in domestic and foreign academic sources, articles and books related to the subject were collected and studied. Then, the collected data has been analyzed and concluded in the "narrative review" method, in line with the purpose of the research.
Results: Economic action is not atomistic but relational. Individual preferences, norms, values, ethics, tastes, styles, needs, and objectives emerge from and are co-constituted through the social embedding of economic interaction. Economic actors are not isolated beings who carry out atomistic behavioral scripts; rather, they are embedded in a social environment that constitutes meaning through repeated interaction. Such a concept of relational action has three implications:
(a) Conceptuality, related to situated practice and reflexive, transformative action,
(b) Path dependence, which is a matter of institutionalization and imprinting, and
(c) Contingency, associated with serendipity, historical points of inflection, and purposive action toward institutional change.
Conclusions: The conflict between the formation clause and the rationality of the actions of actors from institutions, and institutional changes by actors, can be through Social action, which is fundamentally reactive and contextual in nature, should be resolved. Social action cannot be understood as the implementation of institutional prescriptions
, but is revealed as reflective interaction in specific spatial-temporal contexts. When actors see specific interests and individual benefits associated with potential new institutions, they act to support their development and adoption.
