The rotten apple in the barrel has a bug in it: how the analogy of parasitic infection may shed light on the causes of & solutions to recent financial scandals

Hills, M. and Logendran, G. (2014) The rotten apple in the barrel has a bug in it: how the analogy of parasitic infection may shed light on the causes of & solutions to recent financial scandals. Invited Presentation presented to: British Accounting and Finance Association (BAFA) Annual Conference 2014, London School of Economics, 14-16 April 2014. (Unpublished)

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Item Type:	Conference or Workshop Item (Invited Presentation)
Abstract:	Time and time again, corporate scandals (lately in the banking sector) remind us of the frailty of human standards and values: ethical conduct is unreliable. The authors have personal experience, drawn from consultancy and research, of the troubling ease with which groups of employees can subvert and expose to existential risk otherwise sound organisations. Daily, occasional and actions under stress may each and all demonstrate forms of behaviour at substantial odds from what individuals would tolerate, enable or support. These individuals are not necessarily behaving irrationally, nor motivated solely by personal gain: and yet their actions are greedy. They put at risk the stability of the overall organisation for the promise of an easier (but unregulated, unsafe or unpalatable) workload, reward or task list. In this sense, then, a biological analogy would be of a parasitical infection that drains energy from a host, reducing its ability to remain healthy or, as some real-world parasites do, changing the behaviour of the host such that it is persuaded that unconventional actions are natural, intuitive. The very conditions of work may have a profound influence here: “This dysfunctional perspective is reinforced by contemporary corporate monoculture where employees live in a bubble, log obscene hours, and vacation with their co-workers. As a consequence giant corporations are dogmatically insular with their own warped code of ethics and worldview” (Burnett 2011). This paper will seek to shed light on the mechanisms by which teams in organisations come to undertake behaviours which out at risk the sustainability and security of the whole. Here, then, for example, the socially-responsible aspirations and benchmarks of financial institutions are compromised. Supposed to build long-term shareholder value by taking into strategic account the need for engagement and transparency about the company, how it creates value for its stakeholders, how it manages risk and contributes to society – all of these can be undermined by rogue traders (Cf. Nick Leeson, Enron, Parmalat ,NorthernRock, Madoff, LIBOR, the London Whale, RBS, Co-op, RBS GRG). As an American author helpfully puts it: “parasitic accountants […] have subverted America's entrepreneurial spirit and jeopardized the common good” (Burnett 2011).
Uncontrolled Keywords:	Corporate risk, financial scandals, personnel security, insider threat, ethics, corporate governance
Subjects:	H Social Sciences > HF Commerce > HF5387 Business ethics H Social Sciences > HD Industries. Land use. Labor > HD2709 Corporations > HD2741 Corporate governance H Social Sciences > HF Commerce > HF5548 Industrial psychology
Creators:	Hills, Mils and Logendran, Girija
Faculties, Divisions and Institutes:	?? CELS ?? University Faculties, Divisions and Research Centres - OLD > Faculty of Business & Law > Business University Faculties, Divisions and Research Centres - OLD > Research Centre > Institute for Logistics, Infrastructure, Supply, Travel and Transport Research Institutes > Institute of Logistics, Infrastructure, Supply & Transport Faculties > Faculty of Business & Law > International Strategy & Business
Date:	14 April 2014
Date Type:	Presentation
Event Title:	British Accounting and Finance Association (BAFA) Annual Conference 2014
Event Dates:	14-16 April 2014
Event Location:	London School of Economics
Event Type:	Conference
Language:	English
Status:	Unpublished
Related URLs:	Organisation
URI:	http://nectar.northampton.ac.uk/id/eprint/7545

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