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Institutional work and complicit decoupling across the US capital markets: the case of rating agencies

journal contribution
posted on 2023-06-08, 18:05 authored by Cynthia E Clark, Susan Newell
We focus on the core institution of the capital market and the institu­tional work of professional service firms that provide ratings on corporate issuers, initially in a bid to maintain this institution, which suffered when those involved relied solely on information from the issuers themselves. Through our analysis we identify a new type of decoupling—complicit decoupling. Complicit decoupling evolves over time, beginning with the creation of a new practice, here corporate ratings as a form of policing work, which emerges to help to maintain a core institution. This practice is then adopted, implemented and later becomes decoupled. Exposure does not undermine the legitimacy of the practice because external actors collude in the ‘window dressing’ and, because it has become normalized, only partial repairs are enacted. It is by nature field-level institutional work, benefiting the majority of the field and inherently involves a violation of promise keeping. We conclude with implications for managers and behavioral ethics researchers.

History

Publication status

  • Published

Journal

Business Ethics Quarterly

ISSN

1052-150X

Publisher

Philosophy Documentation Center

Issue

1

Volume

23

Page range

1-30

Department affiliated with

  • Business and Management Publications

Full text available

  • No

Peer reviewed?

  • Yes

Legacy Posted Date

2014-08-12

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