Financial Regulation and Social Welfare: The Critical Contribution of Management Theory

Marti, Emilio; Scherer, Andreas Georg

doi:10.5465/amr.2013.0469

Cited by 77 publications

(26 citation statements)

References 163 publications

(163 reference statements)

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Further studies in this tradition examined, for example, how rational choice theory makes decision-making within organizations more rational (Cabantous & Gond, 2011) or how mainstream financial theories reinforce the currently widespread technocratic approach to financial regulation (Marti & Scherer, 2016).…”

Section: /53mentioning

confidence: 99%

“…Research on the performativity of theories originated in the social studies of science (Barnes, 1983(Barnes, , 1988Hacking, 1983) and came to flourish in the social studies of finance (Callon, 1998;MacKenzie, 2006;MacKenzie & Millo, 2003). Over the last ten years, management researchers have started to take up these ideas (Cabantous & Gond, 2011;Ferraro et al, 2005a;Marti & Scherer, 2016). The basic proposition in this research stream is that scientific knowledge does not merely describe an external reality, but also "intervenes" in that reality (Hacking, 1983: 31); in other words, theories can "make a difference" (MacKenzie, 2006: 18; italics omitted) in the world.…”

Section: A Process Model Of Self-fulfilling Theoriesmentioning

confidence: 99%

“…The first contribution of our paper is to the literature on performativity (Cabantous & Gond, 2011;Ferraro et al, 2005a;Marti & Scherer, 2016). Existing research distinguishes between three types of performativity (generic, effective, and Barnesian;see MacKenzie, 2006) and three outcomes that performativity can lead to (reshape language, social norms, and material devices; see Cabantous & Gond, 2011;Ferraro et al, 2005a).…”

Section: How Feedback Loops Create Self-fulfilling Theoriesmentioning

confidence: 99%

“…A well-known example thereof is the Black-Scholes theory, where using that theory pushed option prices toward the prices that the theory predicted (MacKenzie & Millo, 2003). In such cases, theories can become self-fulfilling by reshaping the language, social norms, and institutional designs of traders, managers, policy-makers, or other actors (Ferraro, Pfeffer, & Sutton, 2005a).Further studies in this tradition examined, for example, how rational choice theory makes decision-making within organizations more rational (Cabantous & Gond, 2011) or how mainstream financial theories reinforce the currently widespread technocratic approach to financial regulation (Marti & Scherer, 2016).Most studies on performativity to date focus on theories that have successfully transformed social reality. However, because of this "success bias," the literature lacks a clear understanding of the conditions that determine whether theories become performative or not.…”

mentioning

confidence: 99%

See 3 more Smart Citations

When Do Theories Become Self-Fulfilling? Exploring the Boundary Conditions of Performativity

Marti

Gond

2018

AMR

Self Cite

132

146

View full text Add to dashboard Cite

Management researchers increasingly realize that some theories do not merely describe, but also shape social reality; a phenomenon known as "performativity." However, when theories become performative or even self-fulfilling is still poorly understood. Taking this gap in current research as our starting point, we develop a process model to show that new theories will only become self-fulfilling (1) if they motivate experimentation, (2) if experimentation produces anomalies, and (3) if these anomalies lead to a practice shift. On that basis, we identify six boundary conditions that determine whether theories will come to shape social reality. To illustrate our argument, we explore the conditions under which theories that postulate a positive link between corporate social performance and corporate financial performance may become self-fulfilling. KEYWORDS:Anomalies, boundary conditions, corporate social performance (CSP), experimentation, performativity, socially responsible investing (SRI) 3/53In the course of the last decade, management scholars and other researchers in the social sciences increasingly realized that some theories do not merely describe, but also shape the patterns of social interaction that constitute social reality (Callon, 1998;. They dubbed this phenomenon "performativity." The most "intriguing" cases of performativity arise when theories become self-fulfilling; that is, when using theories increases the "conformity" between theories and social reality (MacKenzie, 2006: 18-19). A well-known example thereof is the Black-Scholes theory, where using that theory pushed option prices toward the prices that the theory predicted (MacKenzie & Millo, 2003). In such cases, theories can become self-fulfilling by reshaping the language, social norms, and institutional designs of traders, managers, policy-makers, or other actors (Ferraro, Pfeffer, & Sutton, 2005a).Further studies in this tradition examined, for example, how rational choice theory makes decision-making within organizations more rational (Cabantous & Gond, 2011) or how mainstream financial theories reinforce the currently widespread technocratic approach to financial regulation (Marti & Scherer, 2016).Most studies on performativity to date focus on theories that have successfully transformed social reality. However, because of this "success bias," the literature lacks a clear understanding of the conditions that determine whether theories become performative or not. This lack of understanding becomes particularly apparent where the "strongest" forms of performativity (MacKenzie, 2006: 19) are concerned; that is, when theories become self-fulfilling (Healy, 2015: 176). Current research thereby neglects the insight of Felin and Foss (2009b) that social reality is not invariably malleable. Keeping in mind these shortcomings of previous research on performativity, we set out to explore how boundary conditions determine whether a theory will become self-fulfilling or not. 4/53To analyze these boundary conditions, we start by developin...

show abstract

Section: /53mentioning

confidence: 99%

Section: A Process Model Of Self-fulfilling Theoriesmentioning

confidence: 99%

Section: How Feedback Loops Create Self-fulfilling Theoriesmentioning

confidence: 99%

mentioning

confidence: 99%

See 2 more Smart Citations

When Do Theories Become Self-Fulfilling? Exploring the Boundary Conditions of Performativity

Marti

Gond

2018

AMR

Self Cite

132

146

View full text Add to dashboard Cite

show abstract

“…196–198; Mesny and Mailhot ); this would benefit from a more thorough engagement with ANT and STS work that challenges representational theories of knowledge (Hacking ) and analyses knowledge as a set of sociomaterial practices (Latour ; Pickering ). Future studies could also document further ‘performative struggles’ (Callon ) in organizations, as it is likely that various theories, embedded in tools or routines, strive to be enacted in organizations (D'Adderio and Pollock ) and in financial marketplaces (Marti and Scherer ). Arguably, multiple theories coexist and compete to shape actors’ praxis, but how these competing representations are dynamically instantiated remains largely overlooked.…”

Section: Towards a Research Agenda On Performativity For Organizationmentioning

confidence: 99%

What Do We Mean by Performativity in Organizational and Management Theory? The Uses and Abuses of Performativity

Gond

Cabantous

Harding

et al. 2015

Int J Management Reviews

286

262

View full text Add to dashboard Cite

introduced the formulation 'performative utterance' in his 1962 book How to Do Things with Words. This term and the related concept of performativity have subsequently been interpreted in numerous ways by social scientists and philosophers such as Lyotard, Butler, Callon and Barad, leading to the coexistence of several foundational perspectives on performativity. This paper reviews and evaluates critically how organization and management theory (OMT) scholars have used these perspectives, and how the power of performativity has, or has not, stimulated new theory-building. In performing a historical and critical review of performativity in OMT, the authors' analysis reveals the uses, abuses and under-uses of the concept by OMT scholars. It also reveals the lack of both organizational conceptualizations of performativity and analysis of how performativity is organized. Ultimately, the authors' aim is to provoke a 'performative turn' in OMT by unleashing the power of the performativity concept to generate new and stronger organizational theories.

show abstract

Private action in public interest: The comparative governance of social issues

Luo

Kaul

2018

Strategic Management Journal

View full text Add to dashboard Cite

Research Summary We develop a theoretical framework to define the comparatively efficient organizational form for dealing with a social issue, based on the market frictions associated with it. Specifically, we argue that for‐profits have an advantage in undertaking innovation and coordinating production economies, nonprofits in playing a fiduciary role given ex post information asymmetry, self‐governing collectives in dealing with bounded externalities through private ordering, and state bureaucracies in governing general externalities. We build on these arguments to develop a mapping between combinations of these market frictions and the comparatively efficient arrangements to govern them, including a variety of hybrid arrangements such as private‐public partnerships, social enterprises, corporate social responsibility, and so on. Our framework thus contributes to research in strategy, organizations, and public policy. Managerial Summary What is the best way to deal with a social problem? While some believe such problems are best left to the state, others argue that business should take the lead in solving them, or favor nonprofit solutions. In this article, we move beyond such one‐size‐fits‐all approaches, highlighting the different strengths of different organizational forms. We argue that for‐profits' strong incentives make them more innovative; nonprofits are more trustworthy in representing the best interests of others; collectives enable actors to self‐organize around a common interest; and the state is best for issues that impact the entire population. We thus develop a mapping between the nature of the social problem and the organizational form—or combination of organizational forms—that may deal with it most efficiently.

show abstract

Financial Regulation and Social Welfare: The Critical Contribution of Management Theory

Cited by 77 publications

References 163 publications

When Do Theories Become Self-Fulfilling? Exploring the Boundary Conditions of Performativity

When Do Theories Become Self-Fulfilling? Exploring the Boundary Conditions of Performativity

What Do We Mean by Performativity in Organizational and Management Theory? The Uses and Abuses of Performativity

Private action in public interest: The comparative governance of social issues

Contact Info

Product

Resources

About