Management Seminars: Alexandra Dobra
Alexandra Dobra (Research student, University of Warwick)
G.15, 15-19 Tyndall's Park Road, BRISTOL BS8 1PQ
Title: Wall Street: Regulatory compliance risk never sleeps
Recent scandals within investment banks reveal a core weakness in the post-2008 regulatory compliance landscape: its failure to avoid breaches by aligning organisational practices with rules. We offer a group-level psychosocial analysis of regulatory compliance on two tiers. We argue that regulatory compliance generates tensions with the cultural attributes, uncertainty and smartness, of investment banks. At a conscious tier, we use social identity theory to explain why individuals identify with a group, provided that it can produce a status quo that decreases uncertainty and maintains, or increases, smartness. At an unconscious tier, we use defence mechanism theory to explain that regulatory compliance produces tensions with the status quo generated by the group, which lead to a social defence mechanism that affects regulatory compliance risk. In addition, we identify how emotional contagion and RegTech efficiency affect regulatory compliance risk.
Note: this paper won the 'Best Paper Award' at the Academy of Management 77th Annual Meeting.