This paper investigates the substance of institutions in the context of business ethics. In particular, I test a theory of stakeholder attention to resource commitments by firms that implement the Ethics and Compliance Officer (ECO) position, from 1990 to 2008. Results support the hypothesized curvilinear relationship between resource commitments and stakeholder attention – while both high and low levels of ECO implementation generate low levels of reported ethics transgressions (the former due to good firm behavior and the latter due to stakeholder disengagement), moderate ECO implementation produces elevated transgression reports (due to raised expectations and increased engagement). Contrary to extant theory, results are consistent across both internal and external firm stakeholder groups.
I would like to express my gratitude for the guidance throughout this project of Pamela Haunschild, Andrew Henderson, Martin Kilduff, Violina Rindova, Jim Westphal, and, in particular, Matthew Kraatz. I would also like to thank Michael Barnett, Vinit Desai, and William C. Frederick for their assistance in developing these ideas. This project would not have been possible without the support of John Mezias, Michael Hendron, and also the Ethics & Compliance Officers Association; in particular, Tim Mazur and Maria Sonin. Finally, generous financial support was provided by the Herb Kelleher Center for Entrepreneurship and the IC² Institute, and also by the Wortham Chair in Risk Management and Insurance, at The University of Texas at Austin.
Chandler, D. (2015), "Why Institutions Matter: Stakeholder Attention to Organizational Ethics Commitments", Institutions and Ideals: Philip Selznick’s Legacy for Organizational Studies (Research in the Sociology of Organizations, Vol. 44), Emerald Group Publishing Limited, pp. 199-233. https://doi.org/10.1108/S0733-558X20150000044009Download as .RIS
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