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The path to economic crisis in Scotland
Author: Jonathan Hearn

This book takes a body of ethnographic data collected in 2001-2, during a year's fieldwork at the Bank of Scotland (BoS) and HBOS, and revisits it from the perspective of the 2014-16 period. It explores the tension between the 'ethnographic present' of the author's original research and the unavoidable alteration of perspective on that data that the economic crisis has created. The original research had been planned to take place in the BoS but in 2001, before the research began, BoS had merged with the Halifax to form HBOS. The book provides a long-term historical perspective on BoS/HBOS, from inception to the 2008 financial crisis, and then a consideration of the nature of historical explanation, under the rubric of 'theory'. The main attempts to explain the proximate causes of the 2008 crisis, as well as more encompassing political economic arguments about the trajectory and dynamics of capitalism are examined. The concept of 'culture' as applied to both national groups, Scots and English, and organizations, BoS and Halifax, are also dealt with. The book examines other governing concepts such as organisational change in the business world and social change, identity and the way Scottish and English experience their own personhood, and comparative nature of ethnographic research. The conclusion reviews and draws together the themes of the book, returning to the overarching question of historical perspective and explanation.

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Ethnography, history and the vagaries of research
Jonathan Hearn

This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book provides a long-term historical perspective on Bank of Scotland (BoS/ HBOS), from inception to the 2008 financial crisis, and then a consideration of the nature of historical explanation, under the rubric of 'theory'. It looks at the concept of 'culture' as applied to both national groups (Scots and English) and organisations (BoS and Halifax). The book explores the theme of 'change', as both the unavoidable circumstance of wider social change, and a moral imperative to constant organisational change in the business world. It examines the concept of 'identity' and how it bears on how people deploy social categories, and how they experience their own personhood. The book contributes to our understanding of how to do the ethnography of organisations and institutions in a way that achieves depth of analysis.

in Salvage ethnography in the financial sector
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From the Bank of Scotland’s origins to HBOS and crisis
Jonathan Hearn

The Royal Bank of Scotland was established in 1727 and until 1746 it and Bank of Scotland (BoS) controlled public banking in Scotland. The merger to form HBOS can be viewed as a late episode in a long trend in both Scottish and British banking. HBOS was formed near the peak of a general expansion of the British banking system, part of the new, neoliberal centrality of the financial sector to the UK economy. As a bank, Halifax was flush with mortgage assets, but underdeveloped in areas such as treasury functions and corporate finance, and thus was ripe to join forces with a more established bank. BoS managed to stay minimally exposed to the 'secondary banking crisis' of 1973-5. A decade later, BoS was minimally exposed to the over-exposure of many London banks recycling petrodollars into loans to Latin American countries that eventually defaulted in the mid-1980s.

in Salvage ethnography in the financial sector
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Explaining financial crisis and conceptualising capitalism
Jonathan Hearn

This chapter moves from a discussion of attempts to theorise the post-2008 economic crisis, to one of wider efforts to theorise the political-economic trajectory of the UK and similar nation-states. It then presents some reflections on the relationship between large-scale historical and theoretical explanation and small-scale ethnographic research. The chapter tries to live up to the standard: first, by surveying a range of causal processes that clearly combine into a set of relevant causal explanations; second, by at least suggesting some sort of prioritisation, or 'hierarchy' of causes; and finally, by distinguishing between more proximate causes of the banking crisis, and more long-term causes of the crisis and the direction of economic change generally. For Wolfgang Streeck the three decades following World War II, in which capitalism and democracy appeared to grow in compatible ways in 'the West', were an exception to the rule.

in Salvage ethnography in the financial sector
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Nations, banks and the organisation of power and social life
Jonathan Hearn

The culture concept has been central to anthropology and has become increasingly prominent in sociology in recent years. It has also become a key concept in the subfield of organisational studies, where the idea of 'organisational cultures' has become very influential. In short, culture is evidence of power and its organisation. The conception of culture author have proffered implies that there are genuine cultural differences, or at least gradations of difference, between organisations and between nations. For some, the integration of the subsidiary Capital Bank was seen as a significant step to weakening the old Bank of Scotland (BoS) culture, prior to the formation of HBOS. Generally, the 1990s were understood as a period when BoS was aware of the increasing competitive pressures of the banking industry and trying to cautiously innovate and modernize.

in Salvage ethnography in the financial sector
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Discourses of agency and progress in organisational change
Jonathan Hearn

This chapter focuses on the idea of 'change' in several dimensions. The organisational changes in size, scale and structure reflect wider changes going on in the banking and financial sectors, which in turn are conditioned by wider national and global political economies. The chapter begins with some ethnographic examples of how change was being articulated and wrestled with in some of the staff training courses. It then offers an 'interlude' of more theoretical reflections on the concept of social change and its relevance to the material. The chapter then returns to look more closely at aspects of how change was being represented in everyday talk and experienced by bank staff. It explains how people responded to the call to act in highly uncertain circumstances, and some of the patterns of thought and language they drew on to help do that.

in Salvage ethnography in the financial sector
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Struggles with personhood, nationhood and professional virtue
Jonathan Hearn

This chapter examines aspects of Scottish and other identities as they came into play in the author's fieldwork, highlighting the different ways Scottishness, as a diverse social category, gets attached both to organisations (BoS) and to selves. 'Scottishness' was seen as a trait not just of most of the staff but of the organisation itself. The organisation is professional, but staff participate in this value as professionals. Professional is more than a descriptor: it is a kind of virtue, an indication of character. The 'official' representation of BoS's Scottish identity pre-merger was perhaps best exemplified by the Bank's tercentenary celebrations, which ran through the year in 1995, and were a major event in the life of the Bank. There was widespread acknowledgement that the banking sector as a whole was becoming more competitive, over customers and returns to share-holders, and that this was driving the recent wave of mergers.

in Salvage ethnography in the financial sector
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Doing ethnography and thinking comparatively
Jonathan Hearn

The concept of comparison that shapes this chapter functions somewhat differently from the concepts organising the culture, change and identity. Comparison here is primarily a matter of relating the ethnographic data to other experiences which lie beyond that ethnographic research. The whole mythology of ethnography revolves around this comparative experience. Comparison of banks (BoS, Capital, Halifax) and of nationalities (Scots and English) was a key and almost unavoidable means of indigenous sense-making in the context of merger. Corporate takeovers, mergers and restructurings are a routine topic in the financial and wider business news, and it is easy to get the impression that these are processes largely peculiar to the dynamic business world. Moreover, universities are in the business of producing the very professionals that they later employ, and so that expansion in the first instance has grown the academic professions.

in Salvage ethnography in the financial sector
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Jonathan Hearn

This conclusion presents some closing thoughts on the concepts discussed in the preceding chapters of this book. The book describes that constant change is part of the general ideology of modern corporate life, then authors are confronted with a relatively constant 'salvage situation', a chronic instability of institutional orders and their associated cultures and identities. The Bank of Scotland (BoS) 'brand' has been preserved, but the banking organisation has lost much of its earlier culture, ethos and identity. HBOS was specifically unstuck by unsound lending and investment practices, partly due to business ignorance, and towards the end perhaps a bit of desperation, which led to overexposure to risk. The book describes the Gruber's notion of 'ethnographic salvage' as a framing conceit. Gruber's argument is that anthropology, particularly in the British and American traditions, was shaped by a preservationist ethos that developed in the British imperial context of the nineteenth century.

in Salvage ethnography in the financial sector
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Jonathan Hearn

The period from 1997 to 2010 saw government by the Labour Party in the UK as a whole, counterpoised to the previous long rule of the Conservative Party. The Labour government introduced and then broadly consolidated the new devolved arrangements in the UK, by allowing some minor increases in the scope of the powers for the new devolved bodies. Whether it is Scotland seeking to leave the UK or the UK seeking to leave the EU, several imponderable problems present themselves. Finally, if the UK leaves the EU, and Scotland splits from the UK to rejoin the EU, this would create a border that would impede trade between the two. The UK was always an aloof member of the EU and has avoided some of the problems of Europe by staying out of the eurozone, and not signing up the Schengen agreement, which entailed maximally open borders within the EU.

in Salvage ethnography in the financial sector