extended q & a with daniel beunza about taking the floor: models, morals, and management in a wall st. trading room

Following 9/11, Wall St. firms struggled to re-establish routines in temporary offices.  Many financial firms subsequently made contingency plans by building or renting disaster recovery sites.   As we see now,  these contingency plans relied upon certain assumptions that did not anticipate current pandemic conditions:

The coronavirus outbreak threw a wrench into the continuity planning that many Wall Street companies had put in place since at least the Sept. 11 terrorist attacks. Those plans were largely built around the idea that if trading at a bank headquarters was knocked off-line, groups of traders would decamp to satellite trading floors outside the radius of whatever disaster had befallen New York. But those plans quickly became unworkable, given the dangers of infections from coronavirus for virtually all office work that puts people close to one another.

“This is really not the disaster that they had planned for,” said Daniel Beunza, a business professor at the City University of London, who has studied and recently written a book on bank trading floor culture.

 

Just in time for us to understand the importance of face-to-face proximity in the workplace, Beunza has a new book Taking the Floor: Models, Morals, and Management in a Wall Street Trading Room (2019, Princeton University Press) based on years of ethnographic observation. Beunza kindly agreed to an extended Q&A about his research.

Q: “Chapter 1 of your book describes how you were able to gain access to an organization, after two failed attempts.  Quinn, a classmate, offers to introduce you to a former co-worker of his from finance: Bob, now the head of a derivatives trading floor at International Securities.  You meet with Bob and observe activities, where you realize that the trading floor no longer looks or sounds like prior literature’s depictions.  After this first meeting, you send over “sanitized” field notes about your first visit (p. 32), and you meet again with Bob, who has even read and reflected on these field notes. This second meeting to go over your initial impressions starts a longer relationship between yourself and this unit of International Securities [a pseudonym].  You have your own desk on the floor, where you can write down notes​.  

In subsequent years, after the bulk of your field research ends, you invite Bob to come as a guest speaker in your Columbia Business School classes.  Your book recounts how bringing in Bob not only offers the MBA finance students perspective on their desired field of employment, but might also smooth over student-professor relations, especially since teaching evaluations matter.  Afterwards, Bob comments on the students’ late arrivals to class and how he handled the equivalent in his workplace, helping you to understand divergences in your respective approaches to relationships and organizations. 

In chapter 8, your book describes your interview with Peter, an executive who had worked with Bob at International Securities.  Peter describes how most Wall Streeters might react to researchers’ requests for access:

“Bob is a curious dude.  He reads a lot.  He befriended you because he was curious. Most guys on Wall Street would say, ‘Oh, another academic from Columbia?  Thank you very much.  Goodbye.  I don’t have time for you.  You’re going to teach me a new algorithm? You’re going to teach me something big?  Okay.  Come in and sit down.  And I’ll pay you, by the way.’  But a sociologist?  ‘Wrong person on my trading floor.  A desk?  No.  You’re crazy.  Go away.’ So Bob has those qualities, and many of the people you see here have those qualities” (p. 168).

Peter’s comment, along with your observations, also offers a colleague’s assessment of Bob’s management style.  Rather than relying on money as an incentive or fear as a motivation, Bob hires people ‘who were a little different,’ and he cultivates relationships by spending time with employees during work hours in supportive and subtle ways, according to Peter.  (Elsewhere, your book notes that this does not extend to colleagues having drinks outside of work – a way that other organizations can cultivate informal relations.)  

 Your book argues that such practices, when coupled with clearly communicated values delineating permissible and impermissible actions, constitute “proximate control.” Such efforts can check potential “model-based moral disengagement” where parties focus on spot transactions over longer-term relationships; this focus can damage banks’ viability and legitimacy.  In other words, your book posits that face-to-face contact can channel decisions and actions, potentially reigning in the damaging unknown unknowns that could be unleashed by complex financial models.

 First, the content question:

These analyses remind me of older discussions about managerial techniques (notably, Chester Barnard, who built upon Mary Parker Follet’s ideas) and mantras (Henri Fayol’s span of control), as well as more recent ones about corporate culture.  Indeed, your book acknowledges that Bob’s “small village” approach may seem “retro” (p. 170).

That said, your book underscores how people and organizations still benefit from face-to-face connection and interdependency.  Some workplaces increasingly de-emphasize these aspects, as work has become virtually mediated, distributed, asynchronous, etc.  Why and how does it matter so much more now?  How are these findings applicable beyond the financial sector​?”

Beunza: “Face-to-face connections are crucial, but I should add that the perspective coming out of the book is not a luddite rejection of technology. The book makes a sharp distinction between valuation and control. The use of models to value securities is in many ways a more advanced and more legitimate way of pursing advantage on Wall Street than alternatives such as privileged information.

However, the use of models for the purpose of control raises very serious concerns about justice in the organization. Employees are quickly offended with a model built into a control tool penalizes them for something they did correctly, or allows for gaming the system. If perceptions of injustice become recurring, there is a danger that employees will morally disengage at work, that is, no longer feel bad when they breach their own moral principles. At that point, employees lose their own internal moral constraints, and become free to pursue their interests, unconstrained. That is a very dangerous situation.

I would argue this is applicable to all attempts at mechanistically controlling employees, including other industries such as the Tech sector, and not-for-profit sectors such as academia. Some of the warmest receptions of my book I have seen are by academics in the UK, who confront a mechanistic Research Assessment Exercise that quantifies the value of their research output.”

Q: “Second, the reflexivity question:

Did you anticipate how Bob’s visit to your Columbia Business School classroom might provide additional insight into your own “management” [facilitation?] style and your research regarding financial models and organizations?  How have research and teaching offered synergistic boosts to respective responsibilities?  How do such cross-over experiences – discussing issues that arise in researcher’s organizations, which probably constitute “extreme” cases in some dimensions – help with developing organizational theory?”

Beunza: “Back in 2007, I had a diffuse sense that I would learn something of significance when inviting Bob to my classroom, but was not sure what. Before I saw him, I suspected that my original view of him as a non-hierarchical, flat-organization type of manager might not quite be entirely accurate, as a former colleague of him said he was a “control freak.” But I had no way of articulating my doubts, or take them forward. His visit proved essential in that regard. As soon as he showed up and established authority with my unruly students, I understood there was something I had missed in my three years of fieldwork. And so I set out to ask him about it.

More generally, my teaching was instrumental in understanding my research. MBA students at Columbia Business School did not take my authority for granted. I had to earn it by probing, questioning, and genuinely illuminating them. So, I develop a gut feeling for what authority is and feels like. This helped me understand that asking middle managers to abdicate their decisions in a model (which is what the introduction of quantitative risk management entailed in the late 90s) is a fundamental challenge to the organization.”

Q: “This, a methods question:

Peter’s comment underscores what Michel Anteby (2016) depicts as “field embrace” – how an organization welcomes a researcher – as opposed to denying or limiting access.  Anteby notes how organizations react to researchers’ requests to access is a form of data.  How did Bob’s welcoming you and continued conversations over the years shed additional insight into your phenomena?”

Beunza: “Anteby is right that the bank’s form of embrace is data. Indeed, I could not quite understand why International Securities embraced my presence in the early 2000s until 2015, when Bob laid out for me the grand tour of his life and career, and allowed me to understand just how much of an experiment the trading floor I had observed was. Bob truly needed someone to witness what he had done, react back to it, accept or challenge the new organization design. And this was the most fundamental observation of the research process – the one that motivates the book. My entire book is an answer to one question, “how did Bob’s experiment perform?” that I could only pose once I understood why he had embraced my presence.”

————– Read more after the jump ————

orthopraxy vs. orthodoxy and the relevance of religion in the sociology of culture

I’m very grateful to Rod Dreher for such a thoughtful and kind response to my work.  I sent him an e-mail in reply, but I’m actually going to edit it a bit and post it here because it relates to some ongoing conversations in the sociology of culture.  In response to my post about how “moralistic therapeutic deism” is a bit too Protestant, Dreher responds:

Well, let me push back on this. I am part of the Orthodox Church, whose name means “right belief.” Theological orthodoxy is a very big deal to us. But that does not mean orthopraxy is diminished, not at all. The connection is this: if we do not know what to believe, then we will not know what to do. The relationship goes both ways. Practices can be catechetical. I wonder if a distinction Prof. Guhin is missing is that Christianity is supposed to bring about gradual inner change in a person’s life. All of mortal life is a time of pilgrimage, in which, if we are faithful, we are moving ever closer to the ideal of Jesus Christ, conforming our life to his. It’s not a question of earning salvation, not at all; it’s a question of inner transformation, of dying to self so that we may live in Christ. Orthodoxy (right belief) is the map, and orthopraxy (right practice) is what we do when we follow the map’s directions towards our ultimate destination.(This description may not ring true to certain Protestants, but it is at least what Catholics and Eastern Orthodox Christians believe, and, I imagine, what many Protestants do as well.)

I take his point about the intermingling of orthodoxy and orthopraxy (something I’m actually writing about regarding Evangelicals, who are much more orthoprax than than they themselves often recognize), but I suppose my response would be about the question of how much being able to talk about your beliefs actually matters.

This is where (I think) Protestantism really did change how Catholics think about what it means to be a Christian, or, at least, this is Diarmaid Macculloch’s argument about Protestants and the pre-Protestant changes in homiletcs, etc. Charles Taylor describes the Catholic church as a religion on two tracks: folks who had to know what they were talking about, and folks who did the things people who knew what they were talking about were talking about.  So what happened was people got the sacraments, vaguely understood what all of that meant, and then went on their way.  Meanwhile, the elites (monks, priests, nuns) actually had a robust and articulable sense of the meanings of things.

That focus on articulacy is an importance piece, and something that I think Evangelicals often take for granted: being articulate takes work, and the practice of sharing testimony helps you get good at it.  Orthodoxy, or, really, speaking about orthodoxy, is itself a practice, or at least that’s what I’m arguing in my book.

So: if you don’t practice talking about theological claims but you get the sacraments and go on your way, what keeps it together?  Gemeinschaft, basically: a sense of a shared cosmos.  And when you lose that, as Peter Berger and James Davison Hunter argue, it actually becomes more important to be able to be articulate because you start seeing differences.

However, and this is part of my difference with Berger and Hunter (and to be clear: Hunter was my post-doc advisor at the Institute for Advanced Studies of Culture: we’re very close): I’m just not sure people feel the need to think about things as much as Berger and Hunter seem to think people do.  My hunch is that most people’s lives happen in the habituated sense of what’s good and bad, right and wrong.  As such, it’s really not surprising most people (in any context or time period) are inarticulate.  However, the safe guard against that is they’re part of a community with clear ideals and with an elite that can be articulate for them.  In that sense, the democratization of Protestantism is as much at fault here as capital-L liberalism (especially the Second Great Awakening, which is really “when every man his own priest” was taken, a la Trump, both seriously and literally).

This conversation is interesting enough for sociologists of religion, but I think it also has something to say to sociologist of culture, especially regarding Omar Lizardo’s recent ASR on “declarative and nondeclarative modes”:

A roadblock to reaching this goal is that, under the most influential approaches, the implicit, or nondeclarative aspects of culture (phenomenologically opaque and not open to linguistic articulation) are usually conceptualized as being inherently intertwined with, or as being of secondary analytic importance in relation to, its explicit or declarative facets (phenomenologically transparent and elicited as linguistic reports). That is, knowledge “how” is not properly differentiated from knowledge “that” (Ryle 2002:25–26). In the modal case, linguistically articulated forms of culture are presumed to be of more inherent substantive interest than “how” knowledge, or at least of being capable of serving as a relatively unproblematic point of access to the latter (Jerolmack and Khan 2014).My argument in what follows is that a serious consideration of the distinction between declarative and nondeclarative culture (at the personal level), and both from the way culture is manifest in public (extra-personal) form (Strauss and Quinn 1997), is a requirement for effective cultural analysis on analytic and empirical grounds. I will show that having an adequate conceptualization of both the analytically relevant differences between cultural elements as well as the multifaceted relations that these elements enter into, helps resolve a host of empirical issues that would otherwise remain shrouded in ambiguity, confusion, and paradox.

Lizardo continues, not long after that quote, getting at the problem of how we sociologists can study culture that isn’t easy to articulate but nonetheless still exists.  That matters, I’d argue, for religion as well, and for whether or not we can use a respondent’s inability to articulate (orthodoxy) as evidence they are unable to practice (orthopraxy):

I attempt to integrate the practice-theoretical insight that a lot of what functions as culture remains in the tacit dimension, never rising to the level of discourse, with the empirical fact that a lot of what gets referred to as “culture” presents itself to the analyst in the form of explicit talk and discourse (e.g., Swidler 2001a). To that end, I draw on recent interdisciplinary work on the enculturation process to provide a principled account of how we may be able to pull off this feat, an account that should be usable by social scientists committed to the project of cultural explanation. This reformulation has several analytic advantages over previous synthetic attempts, whether of Bourdieusian provenance or not, including the fact that it does not require either the adoption of an idiosyncratic terminology (opting instead for terms with wide currency in social science) or all-out commitment to a delimited theoretical system or program.

Anyway, a lot to think about here, for more than just religion! I know a lot of folks are pushing this cart up the hill, but I really do think religion is just a great site to think about how social life works.

Between Francis and Trump, the religious right is going to keep losing

 

Neither (President?!) Trump nor Pope Francis is a liberal, despite what they or anyone else might say. Trump might have a quasi-liberal past, but he’s mostly a bigot misogynist racist with all sorts of pasts at this point, of which some, I assume, are good people. Francis is also no liberal, at least not on the social (read: sexual) issues that have generally mattered in the U.S. culture wars.

Yet what’s striking about both Francis and Trump is how they’ve shifted attention away from the social issues that have traditionally been a key element of conservative politics. That move has been happening for a while, especially for the cultural right. Well before the Supreme Court supported the right to gay marriage, an increasing amount of theologically conservative Christians distinguished themselves from the preceding generations’ politics.  These are folks of various religions who like Francis not because he’s a cultural liberal (he’s not!) but because he emphasizes economic and environmental justice rather than the sexual issues that have animated the American religious right. The change in focus makes Francis attractive to both religious and non-religious who think poverty and climate change are also “moral issues.”

It’s harder to explain Trump’s attraction. Cruz didn’t do great, but he did a lot better than people thought he would: clearly the culture wars aren’t over. There’s also pretty clear evidence that the more you go to church the less you like Trump, so those conservative Christians who support him tend to be “Christian-ish,” with their religion functioning as a badge of ethnic and cultural identity rather than as a marker of religious devotion. It’s an interesting connection to early modern Europeans’ separation of themselves from other races by their being “Christian,” and yet another indication that Trump’s win is a lot about the deep-seated racism still very much at play in American cultural life. There’s sexism there too, and all sorts of other forms of resentment motivating the kind of welfare hoarding Trump is pitching to disaffected whites. It’s noteworthy these folks are voting out of economic and racial resentment rather than the traditional concerns of social conservatism. (It’s of course the case that social conservatism, like everything else in United States politics, is racialized, though it’s striking how unsubtle, and even unnecessary, that link is for Trump.)

Both Francis and Trump ostensibly agree with social conservatives, but they’ve compelled many of them to change their emphases to issues that have nothing to do with their typical concerns. Of course, Francis fans are probably not the same people as Trump fans, and in some ways that’s the point: the culture wars just keep getting cut in different ways. Some warriors, like Rod Dreher, have suggested just giving up, retreating into like-minded communities until the Dark Ages are done. Others remain in for the long haul, but Trump’s win is even worse news for them than Obergefell. This isn’t a defeat at the hands of a too-powerful, out-of-touch bunch of judges. This is the voters who once composed “the moral majority.”  After the shifts towards economic and environmental justice from Francis  and his ilk, alongside the moves towards unapologetic ethnic nationalism from Trumpites, there’s not even a moral plurality left.

The culture war is still going strong.  The religious right, however, is not.

situationist archive

From Public Collectors:

This collection grew out of a fortuitous encounter with Guy Debord, the leader of the Internationale Situationniste. Oneday in late 2001, as I recall it, I stumbled upon a small volume with a most intriguing title: La Société du Spectacle(the Society of the Spectacle). The front cover, which featured a yellowed map of the world, also piqued my curiosity. What could this book possibly be about? Hoping for some clarification, I turned to the back cover (what the French call quatrième de couverture). Its content could be translated as follows: “Throughout his life, and in the way in which he took his own life, Guy Debord (1931-1994) followed only one rule. He summarizes this very rule in his Foreword to the Third French Edition of the Society of the Spectacle: ‘It is necessary to read this book with the idea in mind that it was intentionally written to harm spectacular society. There was never anything outrageous, however, about what it had to say.’ ”

Influenced by Ludwig Feuerbach, Guy Debord posits that, “in modern societies… everything that was directly lived has moved away into a representation.” In a sense, the opening sentence of the Society of the Spectacle (Paris: Buchet-Chastel, 1967)sums up the French theorist’s view of the world. According to Debord, alienation does not lie in workers’ lack of agency (as Marx believed) but – and this is a gross simplification – in the fact that, in modern societies, social interactions are mediated by images.

Having read much of Debord’s works, I then turned to the writings of Internationale Situationniste members. In the meantime, I also developed an appetite for scholarship on Guy Debord, and the Internationale Situationniste, as well as for Situationist-inspired movements of the late 1960s onwards. My collection grew from this appreciation of theInternationale Situationniste and its ideas.

Debord insisted that his written works be made available to all free of charge. By sharing my own collection of Situationist and Situationist-influenced  material, both via my blog (www.situationnisteblog.wordpress.com) and here on Public Collectors, I hope to play a (very) small part in fulfilling Debord’s legacy and that of the Internationale Situationniste.

Check out the collection here.

50+ chapters of grad skool advice goodness: Grad Skool Rulz ($2!!!!)/From Black Power/Party in the Street!!