Finance Professionals

Emotional Competence and Post-Crisis Behavior within Organizations

(Job Market Paper: In preparation for submission to Management Science)

I examine the post-crisis interactions of employees belonging to a hedge fund that was raided by regulators investigating alleged insider trading practices. I theorize that in the aftermath of an organizational crisis, employees face environments characterized by imperfect information and high uncertainty and utilize interaction-generated impressions of organizational membership (of self and others) to guide social interaction. I propose emotional competence as a measure of the responsiveness of an employee to the emotional displays of her organizational alters (Ashforth and Humphrey 1993). Building on the work of Collins (2004, 1981) and others, I hypothesize that an employee’s emotional competence is a significant predictor of the marginalization they experience after a stigmatizing organizational event. Utilizing a corpus of 0.8 million instant messages of a hedge fund that was raided in relation to alleged insider trading activity, I find that in the immediate aftermath of the raid, emotional competence moderates the relationship between proximity to the crisis event and distancing outcomes of employees. Specifically, I find that high emotional competence is associated with attenuated penalties (i.e. smaller reductions in incoming and outgoing communications) and low emotional competence associated with greater marginalization (i.e. greater reductions in incoming and outgoing communications). I believe my theoretical framing provides a novel articulation of the ways in which emotional labor shapes the embeddedness of employees within organizations and the consequential ways in which such processes explain organizations react to crises. My findings have significant implications for multiple research literatures, such as, studies of organizational demography, employee socialization, emotional labor, and crisis management.

Computational Analyses of Expert Behavior

In a collaboration with Professor Brian Uzzi and post-doctoral researcher Yang Yang, I am in the early stages of a project examining network structuration within a hedge fund during the financial crisis of 2008. We seek to apply network modeling and machine learning techniques to the instant messaging, email communications and trading behaviors of fund employees to understand the ways in which exogenous shocks affect the internal structure of organizations. By the simultaneous consideration of patterns in formal and informal communication, role structures and task enactments, we hope to shed light on the micro-interactional mechanisms that unfold in organizations under stress.