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“What Good is Wall Street?” Institutional Contradiction and the Diffusion of the Stigma over the Finance Industry

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Abstract

The concept of organizational stigma has received significant attention in recent years. The theoretical literature suggests that for a stigma to emerge over a category of organizations, a “critical mass” of actors sharing the same beliefs should be reached. Scholars have yet to empirically examine the techniques used to diffuse this negative judgment. This study is aimed at bridging this gap by investigating Goffman’s notion of “stigma-theory”: how do stigmatizing actors rationalize and emotionalize their beliefs to convince their audience? We answer this question by studying the stigma over the finance industry since 2007. After the subprime crisis, a succession of events put the industry under greater scrutiny, and the behaviors and values observed within this field began to be publicly questioned. As an empirical strategy, we collected opinion articles and editorials that specifically targeted the finance industry. Building on rhetorical analysis and other mixed methods of media content analysis, we explain how the stigmatizing rhetoric targets the origins of deviant organizational behaviors in the finance industry, that is, the shareholder value maximization logic. We bridge the gap between rhetorical strategies applied to discredit organizations and ones used to delegitimize institutional logics by drawing a parallel between these two literatures. Taking an abductive approach, we argue that institutional contradiction between field and societal-level logics is sufficient, but not necessary to generate organizational stigma.

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Notes

  1. For example, for the Washington Post: (investment banks or bank or hedge funds or investment funds or finance industry) and (editorial or opinion or op-ed or pg = A16) and sn = Washington post.

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Acknowledgments

I would like to thank the members of my dissertation committee for their input on this paper: Kristina Dahlin, Bernard Garrette, Marc Ventresca, Bernard Leca, Rodolphe Durand, Jean-Pierre Helfer & Eric Abrahamson. I am also thankful to Patricia Thornton, Ian Sutherland, Jean-Philippe Vergne and the participants of the session “Shifts in Institutional Logics” at the Academy of Management 2012 Meeting in Boston, for their valuable insights.

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  1. Saïd Business School, University of Oxford, Park End St, Oxford, OX1 1HP, UK

    Thomas Roulet

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Roulet, T. “What Good is Wall Street?” Institutional Contradiction and the Diffusion of the Stigma over the Finance Industry. J Bus Ethics 130, 389–402 (2015). https://doi.org/10.1007/s10551-014-2237-1

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