Settle down or the struggle within?: Exploring character and corporate responsibility in two financial enterprises

Based on in-depth, qualitative case studies of two Dutch financial enterprises, we explain how character develops as organizations adopt and diffuse corporate responsibility commitments within their boundaries. We found that commitments become articulated as a result of the organization’s problematic past, envisioned future, and as a result of pressure from internal subgroups. Because these commitments were made salient to managers, tensions became salient, leading to various forms of struggle. Three interrelated dynamics underlie this state of struggle, which we termed emerging dilemmas, experiencing identity ambiguity, and perceiving commitments as superficial. The enactment of three stabilizing practices, specifically, substantive integrative work, routinizing a collective conscience and leaders’ modelling behaviors, contributed to commitment affirmation or commitment violation, providing the opportunity for further anchoring these commitments in organizational character. As we build theory around these actions, we contribute to the scholarly understanding of how organizations may improve in embedding contradictory commitments within their boundaries and rejuvenate the study of organizations as distinct social actors through the concept of character

It takes two to tango: How persistent misconduct induces escalating contestation in the financial industry, 2005–2020

Based on three in-depth, qualitative case studies on persistent noncompliance with anti-money laundering regulations by major European financial firms over a 15-year period (2005-2020), we investigate why organizations continue to engage in misconduct despite being repeatedly scrutinized by regulatory authorities. We develop a grounded process model that explains the escalating contestation between offending firms and regulatory authorities. Our social-control agent perspective explains this process in detail by clarifying the shifts in regulators’ attitudes towards misconduct over time. We elucidate three episodes of contested interaction between firms and regulatory authorities: regulatory framing, confronting complacency, and coercing acquiescence. We found that within these episodes, learning in response to regulatory enforcement was respectively perverse, myopic and involuntary. More specifically, we find that noncompliance becomes normalized as a result of regulatory restraint, purposefully maintained through symbolic and isolated remediation, and eventually resolved following salient critical events