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Double trouble: sibling rivalry and twin organizations in the 2008 credit crisis. (2014)

“… the closeness of organizational identities in twin organizations may lead to increased rivalry, narcissism and a tendency for greater risk-taking and vulnerability.

Prof Mark Stein, Chair in Leadership and Management, School of Management, University of Leicester

British Journal of Management, (2014), DOI: 10.1111/1467-8551.12072

Stein’s paper makes a new contribution to the field of organization studies by proposing and exploring the idea of highly similar ‘twin organizations’.

At the core of his paper lies the idea that twin organizations may find that each other’s very existence constitutes an assault on their own pride and unique sense of identity, and, in responding to this, may be impelled towards narcissism and to establish identities that expose them to unnecessary risk.

The theoretical innovation of the concept of twin organizations is illustrated by reference to some the Organizations that got most deeply into trouble in the 2008 credit crisis – two UK banks (HBOS and RBS) and two large US financial institutions (Fannie Mae and Freddie Mac)

As well as contributing a new idea to organization studies, and also a new angle on some of the largest casualties in the 2008 credit crisis, this paper makes a contribution to the theory of organizational risk, because it suggests that the ‘incubation period’ of risk in such organizations reaches back as far as the act of their creation, which, together with more recent events, may propel them towards collapse. Further, by proposing that – in trying to create unique and special identities – twin organizations may be inclined to engage in high-risk behaviour, this paper contributes to the theory of organizational identity. This paper also makes a contribution by examining prima facie evidence that similar problems have played a role in the Eurozone crisis.

Access Professor Stein’s paper here: Double Trouble

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