PhD Thesis by Johanne Grant: Who are we now? Organizational scandal and identity work in the world of finance

The dissertation examines how employees and managers react during an organizational scandal - more specifically in Danske Bank - while the scandal unfolds.

Who are we now? Organizational scandal and identity work in the world of finance

by Johanne Grant

This dissertation investigates internal processes of organizational scandal from an identity perspective. Scandal is seen to associate negative social evaluation to an organization as well as a high level of disruptive publicity. This confrontation of sudden negative perception of the organization may threaten organizational members’ collective understandings of “who they are”, thus affecting organizational identity. This dissertation is interested in examining how and in what way this threat affects the identity processes of organizational members on an organizational level, asking: How does organizational scandal affect organizational members’ identity processes?

This is investigated through an organizational ethnography taking place in Denmark’s largest bank, Danske Bank. Danske Bank was involved in what is assumed to be the world’s largest case of money laundering. This developed into a scandal for the organization from 2018 to 2019, where I was already present in the organization as an industrial PhD student. The development of the events presented the opportunity to study internal, identity-related processes during scandal as the events unfolded. This was done throughout a 2-year-long data collection process that included the use of mixed methods such as interviews, observations, and organizational documents. The study was based on a pragmatic stance to organizational ethnography. The industrial PhD setup and research design gave me the opportunity to be present in the organization and be part of the organizational members’ daily organizational lives. This allowed me to study organizational identities through the ongoing discursive and interactional processes whilst they occurred.

This led to findings proving how negative social evaluation from scandal was experienced by organizational members as persistent and related to the core of organizational characteristics, thus becoming “sticky” for organizational members. At the same time, managers were shown to prescribe emotional displays from employees related to shame that contradicted the employees’ emotional experiences of scandal, leaving the employees in an emotional dissonance. Employees held on to their own emotional experiences as ways to work on their preferred social identities, in this way perpetuating the emotional dissonance. Furthermore, threat from scandal was shown to be a flexible, discursive construct that developed alongside identity work over the course of the scandal. As a whole, the dissertation demonstrates how the identity processes from scandal worked in interaction with discursive threat construction and in contradictory ways: Scandal is interpreted as deeply related to organizational identity and rejected as related to organizational identity at the same time. This left organizational members with opposing constructs of organizational identity—and in a perpetuated tension from this.

These findings advance the current understanding of identity work during threat, arguing how organizational members will endure—and prefer—more pain and tension from identity threat than anticipated in existing literature. The organizational members construct organizational identities alongside discursive 10 constructions of threat in contradictory ways, which perpetuates tension for them—but allows them to work on multiple preferred organizational identities. Furthermore, organizational members are shown to engage in affirming, restructuring, and ambivalent identity responses to scandal. This adds to existing theory on identity responses to threat, since affirming and restructuring identity responses are shown to not be separate processes but work simultaneously and develop with influence from the level of media attention from scandal.

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