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


  • Thomas Roulet



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. Copyright Springer Science+Business Media Dordrecht 2015

Suggested Citation

  • Thomas Roulet, 2015. "“What Good is Wall Street?” Institutional Contradiction and the Diffusion of the Stigma over the Finance Industry," Journal of Business Ethics, Springer, vol. 130(2), pages 389-402, August.
  • Handle: RePEc:kap:jbuset:v:130:y:2015:i:2:p:389-402
    DOI: 10.1007/s10551-014-2237-1

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    References listed on IDEAS

    1. Rodolphe Durand & Lionel Paolella, 2013. "Category Stretching: Reorienting Research on Categories in Strategy, Entrepreneurship, and Organization Theory," Journal of Management Studies, Wiley Blackwell, vol. 50(6), pages 1100-1123, September.
    2. Irene Herremans & M. Herschovis & Stephanie Bertels, 2009. "Leaders and Laggards: The Influence of Competing Logics on Corporate Environmental Action," Journal of Business Ethics, Springer, vol. 89(3), pages 449-472, October.
    3. Durand , Rodolphe & Paolella , Lionel, 2013. "Category Stretching: Reorienting Research on Categories in Strategy, Entrepreneurship, and Organization Theory," HEC Research Papers Series 996, HEC Paris.
    4. Rodolphe Durand & Lionel Paolella, 2013. "Category Stretching: Reorienting Research on Categories in Strategy, Entrepreneurship, and Organization Theory," Post-Print hal-01026129, HAL.
    5. Durand , Rodolphe & Vergne , Jean-Philippe, 2014. "Asset Divestment as a Response to Media Attacks in Stigmatized Industries," HEC Research Papers Series 1041, HEC Paris.
    6. Tim Groseclose & Jeffrey Milyo, 2005. "A Measure of Media Bias," The Quarterly Journal of Economics, Oxford University Press, vol. 120(4), pages 1191-1237.
    7. Jo-Ellen Pozner, 2008. "Stigma and Settling Up: An Integrated Approach to the Consequences of Organizational Misconduct for Organizational Elites," Journal of Business Ethics, Springer, vol. 80(1), pages 141-150, June.
    8. Thoroughgood, Christian N. & Padilla, Art, 2013. "Destructive Leadership and the Penn State Scandal: A Toxic Triangle Perspective," Industrial and Organizational Psychology, Cambridge University Press, vol. 6(2), pages 144-149, June.
    9. Dubois, Anna & Gadde, Lars-Erik, 2002. "Systematic combining: an abductive approach to case research," Journal of Business Research, Elsevier, vol. 55(7), pages 553-560, July.
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    Cited by:

    1. Leaver, Meghan & Reader, Tom W., 2017. "Safety culture in financial trading: an analysis of trading misconduct investigations," LSE Research Online Documents on Economics 69210, London School of Economics and Political Science, LSE Library.
    2. repec:kap:jbuset:v:146:y:2017:i:2:d:10.1007_s10551-015-2932-6 is not listed on IDEAS
    3. repec:kap:jbuset:v:154:y:2019:i:2:d:10.1007_s10551-017-3463-0 is not listed on IDEAS
    4. repec:kap:jbuset:v:147:y:2018:i:2:d:10.1007_s10551-015-2965-x is not listed on IDEAS
    5. Roulet, Thomas, 2015. "Qu’il est bon d’être méchant! Paradoxe de l’illégitimité organisationnelle dans le contexte des banques d’investissement
      [It feels so good to be bad! Paradox of organizational illegitimacy in the c
      ," MPRA Paper 61811, University Library of Munich, Germany.
    6. Clemente, Marco & Roulet, Thomas, 2015. "Public Opinion as a Source of Deinstitutionalization: A 'Spiral of Silence' Approach," MPRA Paper 60130, University Library of Munich, Germany.
    7. van Hoorn, Andre, 2015. "Organizational Culture in the Financial Sector: Evidence from a Cross-Industry Analysis of Employee Personal Values and Career," MPRA Paper 67222, University Library of Munich, Germany.
    8. repec:kap:jbuset:v:158:y:2019:i:3:d:10.1007_s10551-017-3752-7 is not listed on IDEAS
    9. Thomas Roulet, 2019. "Les Evaluations Sociales en Stratégie : Légitimité, Réputation, Statut, Stigmate et Cie," Post-Print hal-01970557, HAL.


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