Drift and Adjustment in Organizational Rule Compliance: Explaining the Regulatory Pendulum in Financial Markets

• 成果类型: Article
• 署名作者: Martinez-Moyano, Ignacio J.; McCaffrey, David P.; Oliva, Rogelio
• 署名单位: United States Department of Energy (DOE); Argonne National Laboratory; University of Chicago; State University of New York (SUNY) System; University at Albany, SUNY; Texas A&M University System; Texas A&M University College Station; Mays Business School
• 刊物名称: ORGANIZATION SCIENCE
• ISSN/ISSBN: 1047-7039
• DOI: 10.1287/orsc.2013.0847
• 发表日期: 2014
• 页码: 321-338
• 关键词: rule change; rule compliance; internal and external regulation; standards erosion; complex systems analysis; qualitative analysis; organizational processes; financial markets; system dynamics

摘要

This article integrates research on rule development, compliance, and organizational change to model rule development and compliance in organizations, using causal-loop modeling from system dynamics to articulate explicitly a few key underlying processes. We focus on financial markets as a case area, suggesting that recurring regulatory problems in financial markets in the United States over the past 60 years, although differing in specifics, are structurally similar. At the heart of the model is the tension between production goals that focus on short-term, certain, salient benefits and required adherence to production-constraining rules that attempt to mitigate long-term, uncertain, nonsalient risks. It describes systemically how organizations attend to rules depending on the nature of the benefits of production compared with those of rule compliance. The model captures the operative mechanisms responsible for the development of pressures for production and for rule compliance in organizations, providing a structural explanation both for problem-prone organizations characterized by erosion of standards and increased violations and for organizations following rules more reliably. Drawing on studies of institutional work, we conclude by suggesting research on how agency, through strategic and tactical choice, potentially modifies structure in rule compliance.