• Work

• Feedback Cycles

• Reconciling stakeholder interests

Cooperation is not always a force for good. This study examines what happens when it becomes complicit in harm. Drawing on post-failure document analysis of four major banks, Barclays, Royal Bank of Scotland, Merrill Lynch, and Goldman Sachs, we trace how financial deregulation in the late 1990s and 2000s set off a chain of events that transformed cooperation from a professional resource into a mechanism of organisational decay. The argument unfolds in three steps. First, deregulation created new profit opportunities that led banks to restructure their governance toward risk-taking and short-termism. Using Goal Framing Theory and Joint Production Motivation Theory, we show how these governance changes gradually eroded the normative goal frame at the individual level, displacing professional ethics and collective commitment with gain and hedonic orientations. Second, the resulting behavioural shifts produced what we call cultural slopes: a gradual erosion of shared norms and values within each bank's belief system, which then legitimised, normalised, and reinforced further norm violations. Third, the cultures that emerged, characterised by fear, passivity, dishonesty, and groupthink, ultimately drove the banks' decay, reflected in bankruptcies, regulatory fines, and widespread customer harm. Central to the study is the concept of complicit cooperation: employees and managers jointly working toward implementing ethically questionable and at times illegal business practices. Cooperation did not break down in these banks. It continued, and in continuing it sustained the very practices that destroyed them. This study introduces complicit cooperation as a neglected mechanism of organisational decline and shows how the interplay between formal governance, organisational culture, and individual motivation produces it.

How does the interplay between formal governance, organisational culture, and cooperative behaviour contribute to organisational decay?

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• Text Analysis

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• Unstructured

• English

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