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

journal contribution
posted on 2023-06-08, 18:10 authored by Cynthia E Clark, Susan Newell
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.

History

Publication status

  • Published

Journal

Business and Society Review

ISSN

00453609

Publisher

Wiley

Issue

1

Volume

118

Page range

105-134

Department affiliated with

  • Business and Management Publications

Full text available

  • No

Peer reviewed?

  • Yes

Legacy Posted Date

2014-09-03

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