From Economic Gains to Social Losses

This paper analyzes how stories shaped treasurers’ expectations in municipal swap activities and contributes to the sociological debate on the mechanisms of expectation formation. Employing a deductive variant of process tracing, it synthesizes the literature on expectations in economic decision making with the literature on the diffusion of “ideas,” “myths,” and “fashions” in organization theory and management studies. The swap story has spread since the mid-1990s among German municipalities. At the heart of this story is the replacement of traditional borrowing with active portfolio optimization; financial instruments known as swaps play a leading role. This paper examines how stories shape expectations. Specifically, it delves into how the swap story, as a solution to the financial woes of local governments, shaped these governments’ expectations despite the uncertainty resulting from the instruments’ complexity. We argue that the effect of stories on expectations depends on timing. Expectations at an early stage are shaped by economic analyses to reduce uncertainty, while expectations at a later stage are primarily shaped by societal pressures and an established trend. These two distinct mechanisms produce expectations related to economic and social consequences, respectively. Selecting four typical cases, our analysis confirms that stories affected the formation of treasurers’ expectations regarding the use of swaps through these different mechanisms.     

Warum es kaum Pensionsfonds in Deutschland gibt. Kapitalmarktrisiken,Finanzindustrie und die Politik der Mindestverzinsung

Studies of the rise of private defined-contribution pension plans have traditionally focused on social policy concerns about the allocation of risks and costs for beneficiaries and employers. There is however another dimension of pension privatization, which situates it in the context of financial markets and—more broadly—the economic system. Here, regulations forcing private pension providers to guarantee a minimum rate of return on individuals’ pension assets make a crucial difference for financial markets because they incentivize fund managers to invest a greater chunk of plan portfolios in fixed-income securities and therefore away from equities. While different segments of the financial industry have divergent preferences over minimum return guarantees, politicians are caught in a dilemma: Should they prioritize predictable benefit levels or the development of equity markets? Using the case of the introduction of the German Riester Rente, we argue that, as politicians linked the introduction of private defined-contribution plans with cuts in statutory pensions, insurance firms in coalition with trade unions insisted on minimum guarantees, thereby restricting the expansion of equity markets in Germany.     

Die Legitimität von Finanzregimen

In this article we propose a financial regime typology that adds the role of cultural legitimacy to financial market regulation. Bridging Comparative Political Economy and Economic Sociology we refer to a German Weberian tradition of institutionalist research that has stressed the intermediate position of institutions between social values and concrete market action. Financial regimes do not only define formal rules and organizational patterns, they also install symbolic boundaries between legitimate and illegitimate finance, providing cultural acceptance to these morally and historically “problematic” markets. The article then explores four fields of institutional regulation of stock exchanges in Germany and UK since the 19th century: (1) the creation of an official arena, (2) rules of market access, (3) the legitimate trading goods and (4) rules for penalizing misconduct. We show that German financial regulation was integrative and wanted to protect the real economy by corporatively embedding finance and restrain harmful transactions. In contrast, British financial regulation was segmental and tried to protect the real economy by installing a socially exclusive club of traders governed by professional expertise and hierarchy. This new typification of financial regimes will help to understand the resilience of national financial regulatory patterns across crises and the obstacles to a transnational harmonization of rules. Political reform-making is tied to institutional principles of the past.     

Finanzialisierung,Demokratie und Gesellschaft – zehn Jahre nach Beginn der Finanzkrise

This introduction to the special issue—ten years after the collapse of the investment bank Lehman Brothers and the beginning of a worldwide financial, economic, and debt crisis—reflects on the extent to which the economic crisis affected a turning point in society overall. The current state of research into the relationship between financialization, democracy, and social conditions strongly suggests that while the processes of financialization that favored the emergence of a crisis were influenced by the financial crisis, they were not completely reversed. In fact, the financial market regulation, which was changed in response to the crisis, did not exert any modifying pressure in terms of a restructuring of the financial system. An epochal shift in financial market regulation therefore cannot be identified from the steps taken in the reform process. Elseways there is clear evidence that the financial crisis has had a lasting impact on the European integration process, confidence in democracy, and political culture. The financial crisis is therefore likely to be perceived as a historical watershed, mainly due to its impact on societal areas beyond the financial system itself.     

Manager-Derailment

The topic of this article in the journal “Gruppe. Interaktion. Organisation (GIO)”, failure of managers, used to be a taboo issue that currently receives more and more attention in the daily press as well as in research. In times of globalization and the resulting world-wide competition, organizations bear the responsibility of counteracting failures of their top managers as they encompass not only financial damage for the company but also personal consequences for the respective individual. The derailment of a manager describes the sudden break-down of a so far successful executive. But how does a derailment occur and are there possibilities to prevent it? The following contribution reports empirical evidence for both risk and resilience factors and gives advice for personnel selection and development.     

Desynchronisation und Populismus

This contribution takes its starting point from the assumption held by a theory of differentiation that the political shaping of society is challenged by an increasing desynchronization of distinct social sub-areas. Drawing upon the example of financial market regulation, we demonstrate how this political shaping capability is to a great extent successfully sustained or retrieved through the employment of hybrid organizations such as the German Federal Financial Supervisory Authority (BaFin), of which we undertake an in-depth analysis in this paper. However, this comes at the prize of another (vertical) desynchronization at the intersection of well-established political institutions and the elementary processes of the formation of a democratic will. As a consequence, we develop an interpretation of post-democratic tendencies that exceeds common diagnoses of post-democracy and populism by offering a structural-temporal explanation of the perception that the formation of a democratic will and the political establishment are drifting apart.     

Verteilungseffekte von Finanzialisierung

Financialisation is often associated with rising income inequality. The article describes the major aspects of financialisation in the foreign, financial, business and household sector, and identifies several hypotheses how financialisation affects functional income distribution. We discuss enhanced exit options of firms, rising financial overhead costs for businesses, increased competition in capital markets, and weakened bargaining power of workers due to indebtedness. The different hypotheses are operationalised through empirical measures and their effect on the wage share is tested econometrically by means of a panel data set of 14 OECD countries over the period 1992–2014. We find statistically significant negative effects of financial payments of firms and financial openness on the wage share.     

WE WANT MORE – WE ARE MORE

Impressed with the current migration in Europe and the connected socio-political and civil-societal challenges, we examine the question which contribution group-dynamic learning forms and its paradigms can raise awareness for a shared created future. Group dynamics understands itself as a place of practical philosophy, as intervention per se, where collectives can emancipate and participation should become alive. The origin of this idea is the examination with the unknown, the differences and the linked questioning of subjective truths, feelings and convictions. The connection between individual as well as collective self-enlightenment processes and the competence extension dealing with personal, cultural, moral, social etc. boundaries.We focus on the emotional effects (uncertainty and fear as a side effect of migration) as well as the theoretical background of the unknown and discuss the sense and the possibilities of participative-designed intervention forms of knowledge creation. Taking into account that several issues of collaboration for a shared future cannot be solved without the people concerned, we examine why we are “more”, why we want “more” and from what we will need “more”.     

HOW TRADING INSTITUTIONS AFFECT FINANCIAL MARKET PERFORMANCE: SOME LABORATORY EVIDENCE

The effects of trading institutions on market efficiency and trading volume are examined. The trading institutions are computerized versions of continuous double auction and "clearinghouse" markets. Traders are experienced, profit-motivated undergraduates. The traded good is a financial asset whose monetary value is state- and trader type-contingent. Traders possess asymmetric private information on asset value. The results show that clearinghouse markets are as informationally efficient as double auction markets and almost as allocationally efficient; the double auction encourages greater trading volume but the clearinghouse provides greater depth; public orderflow information enhances double auction performance but impairs clearinghouse performance.     

“These Aren’t Very Good Times”: Financial Uncertainty Experienced by Romantic Partners in the Wake of an Economic Downturn

In the wake of the economic downturn, economic uncertainty is roughly double that of the past 23 years. Research indicates married couples are uncertain about finances and financial uncertainty can adversely affect individual and relational outcomes, yet little is known about the nature of financial uncertainty and how it is manifested. Thus, this investigation relied on face-to-face interviews to uncover the financial uncertainty experienced by 40 individuals in married or cohabiting relationships. The study found financial uncertainty was largely universal regardless of participant age, marital or socioeconomic status, sex, or family background. Five types of financial uncertainty emerged from the interviews: (1) economic uncertainty; (2) management uncertainty; (3) personal uncertainty; (4) communication uncertainty; and (5) chronic uncertainty, underscoring the importance of financial communication.     

Kulturwandel im Geldgeschäft? Potenziale einer ethischen Selbsterneuerung im Banken- und Finanzwesen

Following the financial crisis in 2008 a debate about the social benefit of the financial industry, which operates without considering its real-economic consequences, was initiated. The financial industry responded by offering strategies of cultural change (“Kulturwandel”) which foster a more socially responsible financial practice. At the same time the expansion of “ethical” banks aims to establish a banking business avoiding negative externalities of the banking sector. Following the conceptual assumptions of the sociology of critique we study the collectively shared interpretation of a “good” and legitimate financial practice beyond publicly communicated standards of practice. Against this backdrop we evaluate the potentials of normative self-regulation in banking and finance. Our results show that cultural or ethical change is only partly feasible if it exclusively focuses the motives, values and personalities of the individual subjects but neglects the structural as well as institutional conditions of a “good” financial practice.     

Can’t buy me laughter – Humour in organisational change

This article reflects upon the potential role of humour during an organisational change process. We focus on three facets that are of special importance during change: coping with the change, resisting the change, and leading the change. For each facet, we present relevant quantitative and qualitative studies; and in a final section, we derive implications for employees, leaders, and organisations.In regards to coping with change, we focus on the stress-buffering effects of humour. High-humour individuals maintain higher levels of positive affect in stressful situations and appraise a potentially stressful event as a positive challenge rather than a threat. In regards to resisting change, we show that aggressive humour can be an indicator of serious distress and a means to express resistance towards authority or aspects of the change process. In regards to leading change, we point out how effective leaders may utilise humour to manage followers’ emotions in order to increase positive affect and to reduce perceived threat associated with change.We conclude by suggesting how humour can be used as a diagnostic tool, to foster a humour-supportive climate, to improve communication strategies, and to support an error management culture.     

Finanzialisierung und die Entstehung der Eurokrise: Die Perspektive der Vergleichenden Kapitalismusforschung

The article provides an explanation of the Eurozone crisis by focusing on the process of financialization that interacts in different ways with diverging varieties of capitalism. By doing this it contributes to the emerging discussion on country-specific variations of financialization and their interactions. The strongly increasing importance of the financial system has led—together with the abolition of the exchange rate risk—to a strongly increasing private indebtedness in the Southern Eurozone economies and to the emergence of a consumption-driven growth regime. It has developed a symbiosis with the export-driven German growth regime, as far as parts of the demand created have benefitted the German export sectors and German banks have become important providers of credit in the Southern Eurozone. The reduction of credit provision after the global financial crisis has led to the stagnation of the Southern economies.     

„Neue Berater braucht das Land?“ – Eine empirische Analyse der Charakteristika potenzieller Nachwuchskräfte in der Finanzdienstleistungsbranche und Konsequenzen für das Employer Branding

Demographic change and associated shortage of skilled labor as well as changing values in future generations of employees are omnipresent. In addition, financial service providers are facing further challenges such as impacts caused by the financial crisis and the commission remuneration model in order to reach suitable employees, so that a target group oriented employer branding strategy plays an important role.Therefore, this paper investigated characteristics of potential employees who are interested in the financial services industry and also in salary models based on commission rather than fixed pay. To that end, we conducted an online survey with students as representatives of future employees. The questionnaire investigated expectations of potential applicants regarding their employers, their information seeking behavior (especially regarding online media), values, and personality characteristics. Results give insights into successful media use and corporate presentations of employers, but also illustrate the low attractiveness of the financial services industry and also commission remuneration models. Therefore, the importance of a successful employer branding strategy is emphasized.     

‘No one to trust’: the cultural embedding of atomism in financial markets

The paper ethnographically explores the cultural embedding of atomistic indifference in online, global financial markets: arenas that have been digitally designed according to economic ideals and that demand an extreme form of relational and social dissociation from the partners to exchange and from those affected by the transactions. Its case‐study is lay financial‐trading in Israel, a country undergoing extensive neoliberalization. The study shows that dissociation is embedded in an economic culture marked by constant, multi‐sited declarations that economic‐Others are cold, uncaring and manipulative. It takes shape as traders convert the distrust towards Others into distrust towards portions of the Self that represent links to these Others, namely their own social‐psychology and social concern. Acting atomistically and selfishly in the market thus entails considerable reflexive work. The paper contributes to an ongoing debate on the moral and cultural embeddedness of markets in general and of the expanding financial markets in particular.     

People Analytics: Datengestützte Mitarbeiterführung als Chance für die OrganisationspsychologiePeople Analytics: an organizational psychology perspective on data-oriented leadership

In times where change is a natural part of our daily corporate reality, global markets push international competition and demographic changes make it difficult to find qualified employees, the “human” as a major factor for organizational success receives raised attention. Companies have a great interest to know and to leverage the causal impact of emotions, needs and behaviors on strategic business areas (e.?g. employee recruiting, employee commitment, customer satisfaction, competitive advantage). With a growing volume and variety of data made available by IT-supported processes and new data sources such as mobile data or corporate social media data, a new field of practice emerges: people analytics. This growing area of data analyses on all kinds of different questions relating to employee issues and leadership in organizations overlaps in many ways with the empirical psychological research of the last decades. People analytics yields a unique chance for organizational psychologists to delve into corporate waters and contribute their expertise to corporate research projects.     

The use of risk in understanding financial decisions and institutional uncertainty

The idea that rationality and emotional factors are involved in financial decisions is well accepted in many economic approaches and in organisation theory. This paper compares specific relevant arguments in behavioural finance and sociology. The aim is to show the implications of these different analyses for the financial sector. The question is whether behavioural finance emphasises the concept of risk more than uncertainty. The paper suggests that cognitive and emotional factors are usefully examined in light of approaches from both behavioural finance and sociology. The first looks at individuals primarily, the second at structural (policy and market) factors. I argue that the latter influence organisational choices of different time orientations towards the future. In exploring the potential of this approach, the paper poses three organisational decision models, that take uncertainty and its relevant social institutions into account, while acknowledging that time preferences and discounting by individuals are well-explored in behavioural economic frameworks.     

Re-approaching interview data through qualitative secondary analysis: interviews with internet gamblers

ABSTRACT

This paper addresses two interrelated questions concerning what interview data are and how researchers might use them. The first considers the value of a shift from a predominant or exclusive focus upon how data are constructed and produced at interview, and towards how such data might be apprehended through different forms of engagement. The second question relates to how and what qualitative secondary analysis (QSA) might be used to tell about the social world. In exploring this, we advance a critique of the divide between primary and secondary analysis, recasting the debate in terms of different degrees and qualities of ‘proximity’ and ‘distance’ from the formative contexts of data generation, and the distinctive analytical affordances that relate to these. Using QSA of interview data from a study of problem internet gambling as an empirical crucible, we consider the kinds of participation that interviewees develop through reciprocal engagement with interviewers. We illustrate how participants reflexively negotiate the affordances and limits to the narratives through which they frame and recount their experiences. Finally, we show how interview data can be used both to speak of the temporal, relational, spatial, epistemic contexts of their production, and also to contexts and questions beyond these.     

Die europäische Schuldenkrise als Schub systemischer Vergesellschaftung: Von Partizipationsversprechen zu Partizipationszwang

The article presents a sociological conceptualization of the dealing with the recent sovereign debt crisis in the European Monetary Union (EMU), which is reconstructed as a push of “sociation” (vergesellschaftung in Simmel’s sense) that maneuvered populations of indebted states into de facto contractual obligations vis-à-vis their states’ creditors. Seen from this perspective, the sovereign debt crisis has led to an, if highly ambivalent, deepening of European “integration”. The article suggests a combination of Habermas’s distinction between system and life-world, which enables an interpretation of contract-like relationships as systemic mode of integration potentially harking back on the life-world, with David Graeber’s emphasis on the asymmetrical and hierarchical processes of sociation inherent in contractualized and marketized creditor-debtor relationships. Far from postulating an evolutionary development of processes of debt-related sociation that might be associated with the modernization-theoretical proclivities in Habermas’s theory, the article analyzes the role of financial market publics in creating a structure of legitimation that supported the political interpretation of the financial crisis as a sovereign debt crisis in the EMU, thus bestowing justification on the treatment of populations as “debtors of last resort”.