Political Pressures, Organizational Identity, and Attention to Tasks: Illustrations From Pre‐crisis Financial Regulation

Abstract

Regulatory agencies, like most public organizations, typically operate with multiple tasks and goals, which requires them to prioritize some tasks over others. Such prioritization, while essential, engenders a risk of bureaucratic oversight of significant material problems. Despite the ubiquity and importance of these concerns, our understanding of agencies' allocation of attention across tasks is limited. This article develops a model of agencies' allocation of attention across tasks, which involves an interaction between external public and political pressures and agencies' distinct organizational identities. A brief comparison between two cases of pre‐crisis financial regulation illustrates the proposed model. The two cases suggest that the British Financial Services Authority's and the Israeli Supervisor of Banks' distinct identities conditioned their responses to similarly vigorous pressures to devote more attention to firms' alleged mistreatment of their customers, with important implications for these regulators' attention to firms' capitalization and liquidity.

Having it all? The implications of public health and environmental protection partnerships in the American states

“…These results provide strong support for those arguments made by Carrigan (2017) and Gilad (2015) that the combination of tasks within a single agency can lead to the neglect of some agency mandates. However, these results further strengthen those arguments by illustrating how the combination need not be between competing mandates to lead to neglect.…”

“…Additionally, as Gilad (2015) notes, this shift in agency "identity" has implications for day-to-day enforcement actions. The enforcement process is generally the area in which environmental agencies have the most discretion.…”

“…This neglect is important, of course, because as Gilad (2015) identifies with her analysis of the British Financial Services Authority and the Israeli Supervisor of Banks, it allows for agencies tasked with the same priorities to end up with completely different identities, organizational cultures, or enforcement styles. Depending upon a number of factors, an agency may vary in which of its priorities it emphasizes, leading to significant variation in the implementation of the same or similar policies coming out of a legislature.…”

“…And, yet, Gilad's (2015) analysis of the effect of goal ambiguity on the attention to and prioritization of financial regulation tasks suggests that the combination of mandates, alone, may lead to the development of different priorities, as the confusion over tasks allows for outside interests to permeate the agency, providing them with undue influence over the agency's priorities. Admittedly, public health agencies execute fewer regulatory actions than environmental protection agencies, but they are not entirely nonregulatory in nature (see,e.g., public health agencies' role in overseeing food sanitation efforts).…”

Central banks’ communication as reputation management: How the Fed talks under uncertainty

“…Indeed, several studies in this tradition have helped to illuminate how changes in the external environment are translated into organizational behaviour via the filter of bureaucratic reputation. Among other contributions, the existing scholarship has shown that reputation matters to the way in which agencies prioritize among multiple tasks (Gilad ) and the speed with which they make decisions (Carpenter ) as well as agency performance (Maor and Sulitzeanu‐Kenan ), accountability behaviour (Busuioc and Lodge ), jurisdictional claim‐making (Maor ), and inter‐agency cooperation (Busuioc ). Still, and particularly important for the purposes of this analysis, several studies have provided illuminating insights into the ways in which agencies communicate (Maor et al ; Gilad et al ) and produce signals to influence stakeholders’ assessments of reputation (Abolafia and Hatmaker ).…”