Masquerading in the US capital markets: the dark side of maintaining an institution

Clark, Cynthia E and Newell, Sue (2013) Masquerading in the US capital markets: the dark side of maintaining an institution. Business and Society Review, 118 (1). pp. 105-134. ISSN 00453609

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This article examines the work of professional service firms (PSFs) in their relationships with public corporations; work that is designed to ensure that investors and potential investors have information that will enable them to participate in the capital markets. Using an institutional theory lens, we view these efforts by PSFs as institutional maintenance work and specifically analyze their work related to policing (i.e., rating), enabling (i.e., tutoring), and embedding and routinizing (i.e., collaborating) that helps to support the capital market as a core institution in society. We illustrate how there is a “dark” side to each of these forms of institutional work that exists because of ongoing conflicts of interest within and between their work practices. This dark side has the unintended consequence of producing often biased information or information unavailable to many. When a crisis brings this bias to light, some repair is introduced but often not enough to alleviate the distortion. Our contribution is, therefore, to shed light on the dark side of institutional maintenance work and to explore why repair is increasingly necessary, but often only partially effective.

Item Type: Article
Schools and Departments: School of Business, Management and Economics > Business and Management
Subjects: H Social Sciences > HB Economic theory. Demography
Depositing User: Catrina Hey
Date Deposited: 03 Sep 2014 11:17
Last Modified: 03 Sep 2014 11:17
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