I am always puzzled by the disconnect that exists between the training that finance executives receive, and their actual needs. MBA and M.Sc. programs train participants in financial economics and the use of financial models. This gives them the technical competence to do the day-to-day job in a bank or a fund. But while competence gives participants access into finance, anyone who’s sat on a trading room for more than a day will agree that getting ahead is not a matter of technical skill but of fitting in with the culture, having powerful allies, or mentors. Whether it is getting a promotion, being put in charge or wielding political influence, it is the soft skills that make the difference. And yet, these are nowhere to be seen in higher education in finance. With this in mind, I have assembled a one-week Executive Summer School course at the London School of Economics that addresses the gap.

The course, titled “Leadership in Financial Institutions,” incorporates training in the tools developed by sociologists and psychologists to advance a managerial career. Culture, leadership, communication, social responsibility, just to name a few. But whereas all executive management courses include these topics, the LSE course teaches with tools, cases and theories in financial settings. The difference is critical, because when it comes to learning context matters. Managing a five-people tech start-up is not the same as running a hedge fund with five employees and two billion in assets under management. Being a senior executive at Procter is not the same as managing director at Goldman. And the same goes for a learning situation. For that reason, the course focuses on bank culture, managing traders, networking in banking, communicating with shareholders, and navigating the tension between responsible investment and fiduciary duty… you get the picture.

To this end, the course brings together academics from various departments at the LSE. These include Michael Power, Professor of Accounting and renowned expert on risk. Paul Willman, Professor of Management and author of behavioral studies of traders for more than fifteen years. Sandy Pepper, Professor of Practice in Management with long professional experience in remuneration practices in the City. Connson Locke, Professor of Practice and founder of the LSE’s Behavioral Lab as well as leadership expert. And of course, yours truly. The course is aimed at executives. Runs for a week, starting on June 22nd, and registration is still open. See more details HERE. We’re having our Open Evening this coming Wednesday March 11th at the LSE. The entire faculty will be there to answer questions and meet potential applicants. I’ll be giving a presentation on my research, and there will be drinks and nibbles. Entrance is free. See more information HERE.

Moments of Valuation

March 3, 2015

By David Stark

The challenge: you have just three words to state the core premise of new work in the study of valuation. In “What’s Valuable?,” my concluding essay for The Worth of Goods: Valulation and Pricing in Markets (Aspers and Beckert, eds., Oxford University Press, 2011), I gave a try, starting with price, prize, praise. To that triplicate, I added a fourth, perform, and, in doing so, revealed that the first three were intended as verbs all along. To price, to prize, to praise, to perform. It wasn’t a bad effort, but it was a bit clumsy: prizing and praising are too similar. Yet at least I was on a good course, signaling that valuation can occur in multiple registers and not only in the market.

Moments of Valuation: Exploring Sites of Dissonance (also from Oxford University Press, 2015) offers another effort. The three word summary: value is performed. This collection (which I co-edited with Ariane Berthoin Antal and Michael Hutter) emphasizes that valuation takes place in situations. Valuation is spatially localized and temporally marked. It takes place in situ. And the papers provide detailed accounts of various sites and settings (or, more accurately, setups) in which valuation takes place. It takes place in discrete moments of time. And the papers provide rich accounts of the critical moments when evaluative attention is particularly acute: the attentive moment when a dinner guest first sips a glass of wine, the instant when a luxury perfume is sprayed into a special device allowing the customer a sense of its sillage (the scented trail left by a fragrance wearer), or the moment when the professional art appraiser is cross-examined in the courtroom witness box. As such, the book might just as well have been titled Sites of Valuation: Exploring Moments of Dissonance.

But, as with pricing and prizing, there is not really all that much new in the statement value is performed – for these ideas, if differently expressed, were already there in John Dewey’s marvelous essay, On Valuation (for a lively revisiting of those ideas see especially Fabian Muniesa’s new book, The Provoked Economy, Routledge 2014). It is for this reason that Michael Hutter and I introduce our edited book with a brief essay, “Pragmatist Perspectives on Valuation.” The entire chapter is available on my website HERE. The paragraphs below offer a little taste:

De gustibus non est disputandum. We begin, indisputably, with taste. Then we immediately make it disputatious because we challenge the dominant view in cultural sociology that taste is something one has. Taste, in that view, is primarily symbolic because it is used for social purposes to mark distinction (Bourdieu 1984). By contrast the authors in this volume treat taste not as a noun but as a verb. It is something one does. It is a social process, to be sure; but if symbolic, it is also emphatically material.

Valuation involves a tasting, a testing. The studies here reject the claim that things just “have” some value, that their taste is intrinsic to them, and that tests reveal this natural value. At the same time they also deny the claim that the taste of things is something merely “attributed” to them, and that tests then do nothing more than reveal this value. We reject the dichotomy between natural objects (for which there is nothing to do but exploit the properties of things) and socially constructed objects (for which it is enough to show their arbitrary character as the stakes in social games).

We consider that the things to be tested and tasted are not given but made, and they are transformed in the very process of testing. Furthermore, tasting them or becoming attached to them is not like choosing some gratuitous label to enter a social logic of identity and difference; rather, identities are made and transformed by them. The chapters in this volume treat people’s relationship with things as reciprocal interactions: making things and making us. As Antoine Hennion writes in his chapter: “So conceived, both operations (tasting and testing) are productive, open, and they remain tightly connected, referring less to an absolute divide between objectivity and subjectivity than to a continuous co-production of stabilization and transformation, both in the things and in our capacity to feel what they do.” (Hennion in this volume).

To the two verbs—to taste and to test—we now add another: to contest. The adage de gustibus non est disputandum is misleading, for in matters of taste there can be disputes. Taste, whether the noun is understood as the quality of a thing or as the quality of a person, can be put to tests. And these tests are themselves contested. As the chapters here detail, the trials of valuation frequently involve disputes among different measures of worth, orthogonal principles of evaluation, and contending tests of value.

Interesting conference on money organized by our colleagues at the University of Basel, Department of Sociology, September 24-26, 2015.

Many great speakers, among whom for blog readers, perhaps most familiar are Nigel Dodd (The Social Life of Money) and Bill Maurer (mobile money, payments systems and IMTFI).

Details in the Call for Papers.

Abstracts of no more than 200 words may be sent by 22 March 2015 to philip.mader@unibas.ch.

Please join us at Cass Business School for a 1-day workshop of thought-provoking panel discussions, engaging presentations and constructive paper development roundtables. We will explore current theoretical perspectives and emerging research on the social construction of financial risk, with the aim of generating connections between approaches and highlighting areas for future research.
The workshop addresses four topics: risk objects and science and technology studies; the production of risk culturesrelationality in trading riskperformativity in financial markets. A leading scholar will present each topic, with commentary from a key discussant and group discussion.
The programme and confirmed speakers are as follows:
·       9.30-10:00am: coffee
·       10-11.00am: Risk Objects and Science and Technology Studies, Prof.  Stephen Hilgartner (S&TS, Cornell University).  Discussant: Dr Eugenia Cacciatori (Cass Business School)
·       11-12pm: The Production of Risk CultureProf. Mike Power (London School of Economics). Discussant: Prof Andre Spicer (Cass Business School)
·       12-12.30pm: lunch
·       12.30-1.30pm: Practice Theory & Relationality in Trading RiskProf. Paula Jarzabkowski (Cass Business School). Discussant: Anette Mikes (HEC Lausanne)
·       1.30-2.30pm: Performativity and Social Studies of Finance, Prof. Yuval Millo (Leicester University). Discussant: Juan Pablo Puardo-Guerra (London School of Economics)
·       2.30-3pm: coffee
·       3pm-4pm: Paper development round tables (2 papers/table)
·       4-5:00pm: Break out groups on building bridges between perspectives
·       5-5.30: Wrap up commentary on themes. Prof. Hugh Willmott (Cass Business School)
Date & time: 13th April 2015; 9.30am-5:30pm (followed by drinks and dinner)
Location: Cass Business School, London (Bunhill Row Campus)
Cost: The workshop & lunch are free. Transport and dinner are at your own expense.
Register: 3rd March 2015: Places are strictly limited – please apply early!
To submit a working paper please contact Konstantinos Chalkias with an abstract by 3rdMarch. Both early-stage and under-review papers are welcome. To attend the workshopwithout a paper please also contact <Konstantinos.Chalkias.1@city.ac.uk> by 3rdMarch. We will notify you regarding your place and, if applicable, your paper acceptance at the workshop by the 10th March. NB: Full papers will be due by a strict deadline of 27thMarch, for circulation to your allocated roundtable.
Cass Business School Organizing Committee: Professor Paula Jarzabkowski
with Rebecca Bednarek, Eugenia Cacciatori and Konstantinos Chalkias

A group of computer scientists, working mostly at Princeton, have developed a class to teach the nitty gritty of cryptocurrencies like Bitcoin. To sign up for a free version of the course online, starting February 16, see here.

A remarkable paradox pervades executive education in finance. Most courses provide rigorous training in formal models and economic theory, which is certainly a basic condition to participate in the capital markets. But as everyone who has ever stepped into a trading floor knows, getting ahead in a bank or fund typically entails a completely different set of skills: understanding the social networks at work, the culture of the company, or how to communicate with bosses and investors. This is even more so in a post-crisis world with new and growing regulatory requirements. Hence the paradox: instead of focusing on the soft skills that make or break an executive career, finance courses continue to teach the technical.

Given this gap, the LSE is launching a new Executive Summer School in Leadership in Financial Institutions. I am very pleased to serve as Instructor and Course Leader. Other instructors include heavyweights from the LSE such as Michael Power (LSE Accounting), Paul Willman (LSE Management), Sandy Pepper (LSE Management) and Connson Locke (LSE OB). Guest speakers will complement the academic sessions by lending their insights about best practices in the City of London.

The course aims at providing participants with the tools to lead and manage employees in financial organizations in an environment with unprecedented change. This change not only includes political risks such as last week’s fluctuations of the Swiss franc, but also regulatory trends such as changing European regulations on bonus caps.

The course is also designed to be an integral experience for participants. They will be expected to attend to lectures at our London campus, discuss case studies, gain experience with industry guest presenters and relate to the best practices with a field visit. It aims to explore three types of perspectives: a cultural perspective, a psychological perspective and a social network perspective that examines the role of financial intermediaries.

Participants can expect to:

• Access to cutting-edge research in a financial context on networking, managing through culture and effective communication.

• Learn how to translate leading management frameworks in areas such as compensation and promotion.

• Acquire experience with new tools to handle finance-specific problems such as a bonus-centric culture, the risks posed by financial models, and the challenges posed by global-scale operations.

• Engage with best practices in the City of London across trends such as responding to regulation, cultural transformation, and responsible investment.

• Improve their decision making capabilities through learning how to identify behavioural biases within themselves and their team/ organization.

For those interested in taking their financial career to the next level, this might be the place. For more information, dates and a longer description, see here. And for even more information, just drop me a line at d.beunza@lse.ac.uk

Senator Elizabeth Warren speaks out on the power of the Citigroup lobby in Washington. See it here on HuffPo.

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