SOC208H1 Chapter 12: reading summary 12
Document Summary
This week"s article highlights the role of management control in handling the financial risks. Depending on using the risky derivatives, the effect of moral licensing decreases the self-monitoring for bias, which means people are less likely aware of risk if their employers do not tell them. On the other hand, in research as to diversity programs, the article demonstrates the poor return of diversity programs that caused by weak control of hiring. The most common situation is managers hiring friends without testing that create the bias at the beginning. Even there exist rating systems for supervising employees" behavior, and usually employer does not give lower rating for their employees because of trouble created by employees. In addition, managers" engagement and contact can weaken the bias that always causes the failure of diverse program. As a result of the risky management, the pernell, jung and dobbin studies six derivative activities that expose banks to new risk.
