Purpose: This study aims to examine the philosophical and methodological evolution of the traditional grounded theory and analyze the theoretical framework of situational analysis that incorporates constructivist and poststructuralist perspectives by focusing on its applicability to qualitative nursing research. Methods: A narrative literature review was conducted using predefined inclusion and exclusion criteria, targeting peer-reviewed qualitative studies utilizing situational analysis from 2015 to 2025, retrieved through databases such as PubMed, CINAHL, and RISS. Major theoretical texts were also included. Results: Situational analysis enabled a comprehensive understanding of complex nursing contexts by incorporating non-human actants, social structures, discourses, and power relations into the analysis. The method was effectively applied across various domains, including emergency care, community-based nursing, professional identity development, and psychiatric nursing. The use of mapping tools—situational maps, social worlds/arenas maps, and positional maps—proved especially useful in visualizing structural dynamics and generating practical implications. Conclusion: Situational analysis represents an advanced constructivist qualitative methodology that expands the grounded theory’s analytic scope in nursing research. Further context-sensitive qualitative studies in Korean nursing contexts, integration with mixed designs, and development of researcher training systems are warranted.