A multimethod approach to identifying norms and normative expectations within a corporate hierarchy: Evidence from the financial services industry

Stephen V. Burks, Erin L. Krupka

Research output: Contribution to journalArticlepeer-review

43 Scopus citations

Abstract

We use an incentive-compatible economic experiment and surveys in the field at a large financial services firm to identify the norms for on-the-job behavior among financial advisers and their leaders, and the normative expectations each group has of the other. We examine whistle-blowing on a peer, an incentive clash between serving the client and earning commissions, and a dilemma about fiduciary responsibility to a client. We find patterns of agreement among advisers, among leaders, and between the two groups, that are consistent with company guidelines identified ex ante. However, we also find measurable differences between what leaders expect and the actual norms of advisers. When there is such a mismatch we are able to distinguish miscommunication from ethical disagreement between leaders and advisers. Finally, we show that when advisers' personal ethical opinions do not match group norms, this mismatch is correlated with job dissatisfaction and lying for money in a second experiment.

Original languageEnglish (US)
Pages (from-to)203-217
Number of pages15
JournalManagement Science
Volume58
Issue number1
DOIs
StatePublished - Jan 2012

Keywords

  • Coordination game
  • Ethics
  • Fiduciary responsibility
  • Financial adviser
  • Financial services
  • Incentive compatible
  • Norms
  • Organizational fit
  • Survey
  • Vignette
  • Whistle-blowing

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