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ORGANIZATIONAL WRONGDOING AS THE “FOUNDATIONAL” GRAND CHALLENGE

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RESEARCH IN THE SOCIOLOGY OF ORGANIZATIONS

Series Editor: Michael Lounsbury

Recent Volumes:

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RESEARCH IN THE SOCIOLOGY OF ORGANIZATIONS ADVISORY BOARD

Series Editor

• Michael Lounsbury

• Professor of Strategic Management & Organization

• University of Alberta School of Business

RSO Advisory Board

• Howard E. Aldrich, University of North Carolina, USA

• Shaz Ansari, Cambridge University, UK

• Silvia Dorado Banacloche, University of Massachusetts Boston, USA

• Christine Beckman, University of Southern California, USA

• Marya Besharov, Oxford University, UK

• Eva Boxenbaum, Copenhagen Business School, DENMARK

• Ed Carberry, University of Massachusetts Boston, USA

• Lisa Cohen, McGill University, CANADA

• Jeannette Colyvas, Northwestern University, USA

• Erica Coslor, University of Melbourne, AUSTRALIA

• Gerald F. Davis, University of Michigan, USA

• Rich Dejordy, California State University, USA

• Rodolphe Durand, HEC Paris, FRANCE

• Fabrizio Ferraro, IESE Business School, SPAIN

• Peer Fiss, University of Southern California, USA

• Mary Ann Glynn, Boston College, USA

• Nina Granqvist, Aalto University School of Business, FINLAND

• Royston Greenwood, University of Alberta, CANADA

• Stine Grodal, Northeastern University, USA

• Markus A. Hoellerer, University of New South Wales, AUSTRALIA

• Ruthanne Huising, emlyon business school, FRANCE

• Candace Jones, University of Edinburgh, UK

• Sarah Kaplan, University of Toronto, CANADA

• Brayden G. King, Northwestern University, USA

• Matthew S. Kraatz, University of Illinois at Urbana-Champaign, USA

• Tom Lawrence, Oxford University, UK

• Xiaowei Rose Luo, Insead, FRANCE

• Johanna Mair, Hertie School, GERMANY

• Christopher Marquis, Cambridge University, UK

• Renate Meyer, Vienna University, AUSTRIA

• William Ocasio, University of Illinois at Urbana-Champaign, USA

• Nelson Phillips, University of California at Santa Barbara, USA

• Prateek Raj, Indian Institute of Management Bangalore, INDIA

• Marc Schneiberg, Reed College, USA

• Marc-David Seidel, University of British Columbia, CANADA

• Paul Spee, University of Queensland, AUSTRALIA

• Paul Tracey, Cambridge University, UK

• Kerstin Sahlin, Uppsala University, SWEDEN

• Sarah Soule, Stanford University, USA

• Eero Vaara, University of Oxford, UK

• Marc Ventresca, University of Oxford, UK

• Maxim Voronov, York University, CANADA

• Filippo Carlo Wezel, USI Lugano, SWITZERLAND

• Melissa Wooten, Rutgers University, USA

• April Wright, University of Queensland, AUSTRALIA

• Meng Zhao, Nanyang Business School & Renmin University, CHINA

• Enying Zheng, Peking University, CHINA

• Tammar B. Zilber, Hebrew University of Jerusalem, ISRAEL

Title Page

RESEARCH IN THE SOCIOLOGY OF ORGANIZATIONS - VOLUME 85

ORGANIZATIONAL WRONGDOING AS THE “FOUNDATIONAL” GRAND CHALLENGE: CONSEQUENCES AND IMPACT

EDITED BY

CLAUDIA GABBIONETA

University of York, UK

MARCO CLEMENTE

ZHAW School of Management and Law, Switzerland

and

ROYSTON GREENWOOD

University of Alberta, Canada & University of Edinburgh, UK

United Kingdom – North America – Japan – India – Malaysia – China

Copyright Page

Emerald Publishing Limited

Howard House, Wagon Lane, Bingley BD16 1WA, UK

First edition 2023

Editorial matter and selection © 2023 Claudia Gabbioneta, Marco Clemente and Royston Greenwood.

Individual chapters © 2023 The authors.

Published under exclusive licence by Emerald Publishing Limited.

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British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library

ISBN: 978-1-83753-283-4 (Print)

ISBN: 978-1-83753-282-7 (Online)

ISBN: 978-1-83753-284-1 (Epub)

ISSN: 0733-558X (Series)

Contents

List of Figures and Tables

About the Editors

Claudia Gabbioneta holds a Chair in Accounting and Management at the School for Business and Society at University of York. Her research interests include professions, organizational wrongdoing, and professional misconduct. Her work has been published in prestigious international journals, such as Accounting, Organizations and Society, Human Relations, Work, Employment and Society, and Research in the Sociology of Organizations. She is a Senior Editor of Organization Studies and sits in the Editorial Board of the Journal of Management Studies and the Journal of Strategic Contracting and Negotiation. She has organized several PDW at the Academy of Management and EGOS on organizational wrongdoing and corporate scandals and was an invited panelist at the sub-panel on organizational wrongdoing at the 2019 EGOS colloquium.

Marco Clemente is a Professor of Management and Sustainability, Head of Research Center at the ZHAW, School of Management and Law. His research interests include business ethics, sustainability, organizational misconduct, and corporate scandals. He has analyzed a variety of contexts, including automotive, advertising, and sports. He has published in leading academic journals, including the Academy of Management Review, Journal of Management Inquiry, and Research in the Sociology of Organizations. He has organized several PDWs at the Academy of Management and EGOS on organizational wrongdoing and corporate scandals.

Royston Greenwood graduated from the University of Birmingham in the UK. He is Professor Emeritus at the University of Alberta, and Professorial Fellow at the University of Edinburgh. He is a Fellow of the Academy of Management, Honorary Member of the European Group for Organization Studies, and Fellow of the Royal Society of Canada. His research interests include organizational and institutional change from an institutional perspective. His research has been published in various journals including the Administrative Science Quarterly, Academy of Management Journal, Academy of Management Review, and the Academy of Management Annals. He is a former chair of the OMT Division of the Academy of Management, and former editor of the Academy of Management Annals.

About the Contributors

Matthias Brauer is a Professor of Strategic and International Management at the University of Mannheim, Germany. He received his DBA and his habilitation from the University of St. Gallen, Switzerland. His primary research domain is corporate strategy and governance, with particular interest in how financial investors and analysts influence and respond to firms’ major strategic decisions and actions.

Stephanie Decker is a Professor of Strategy at Birmingham Business School and a Visiting Professor in African Business History at the University of Gothenburg, Sweden. Her work focuses on historical approaches in Organization Studies and Strategy, and she has published in journals such as Academy of Management Review, Human Relations, Journal of Management Studies, Organization, Business History Review, and Business History. She is joint editor-in-chief of Business History, on the editorial board of Organization Studies, Journal of International Business Studies and Accounting History, and Co-Vice Chair for Research & Publications at the British Academy of Management.

Behnud Mir Djawadi is a Research Fellow at the Management Department at Paderborn University (Germany). His research interests include behavioral and experimental economics, as well as organizational behavior, health economics, public economics, and business ethics. Mainly, he uses microeconomic or organizational theory along with concepts of behavioral economics, and the method of economic experiments in both the lab and the field to investigate behaviors and outcomes, and to design institutions and individual incentives for behavioral change. Currently, he is the Secretary of the Society for the Advancement of Behavioral Economics (SABE).

Jung-Hoon Han is an Assistant Professor of Management at the Trulaske College of Business, University of Missouri. He received his PhD from the Pennsylvania State University. His research focuses on the sociocognitive processes shaping firms’ behaviors and outcomes with an emphasis on the role of social evaluations such as status, reputation, and celebrity.

Kate Kenny is a full Professor of Business and Society at University of Galway. She has held research fellowships at the Edmond J. Safra Lab at Harvard University and Cambridge’s Judge Business School. Her work has been published in Organization Studies, Organization, Gender Work and Organization, ephemera and Human Relations among other journals. Her books include Whistleblowing: Toward a New Theory (Harvard University Press, 2019), The Whistleblowing Guide (Wiley Business, 2019, with W. Vandekerckhove and M. Fotaki), Understanding Identity and Organizations (Sage 2011, with A. Whittle and H. Willmott), and Affect at Work: The Psychosocial and Organization Studies (Palgrave 2014, with M. Fotaki). She serves on the editorial boards of Human Relations, Organization, and Organization Studies.

Aharon Mohliver is an Assistant Professor of Strategy and Entrepreneurship at London Business School and was a Visiting Scholar at Yale School of Management. He has taught Strategy for the London and Dubai EMBA programmes at London Business School, as well as Strategic Management courses for MBA, MiM and MiF, and the Ph.D Sociological Foundations of Strategy courses. His research centers on liminal practices – actions that are in a normative “gray area” – and how these impact audience perceptions, scandals, strategic choices, profitability, and competitive advantage. He studies liminal practices in a wide variety of settings, for example, his most recent work has been on liminal practices and the physician networks fuelling the American prescription drug epidemic, the religious affiliation of nursing homes and elderly neglect and abuse and the strategic use of audiences political polarization to increase profits. Understanding liminality helps organizations navigate – gray areas by designing practices and processes that will avoid costly ethical failings while retaining, or even increasing its competitive advantage. For policymakers, this work can inform policies to reduce misconduct by mitigating liminality, instead of later policing it as a crime. He earned his B.A. in Politics, Philosophy and Economics from The Hebrew University and holds a Master’s in Finance and Strategy from the Hebrew University and a Ph.D. from Columbia Business School.

Celia Moore is a Professor of Organisational Behaviour in the Department of Management and Entrepreneurship at Imperial College Business School, where she also directs the Centre for Responsible Leadership. Prior to Imperial, she was on the faulty at London Business School and Bocconi University in Milan, Italy, as well as a Visiting Scholar at Harvard Business School. Her research and teaching sits at the intersection of leadership and ethics. She is particularly interested in supporting individuals to enact their moral agency responsibly. Most recently, she has focused on how individuals navigate morally consequential decisions in their professional lives and challenge legitimate authority figures when they feel morally compelled to do so. She earned her B.A. in Philosophy from McGill University and holds Master’s in Public Administration from Columbia University’s School of International and Public Affairs. She completed her doctoral work at the Rotman School of Management at the University of Toronto.

Iain Munro is a Professor of Leadership and Organization at the University of Newcastle. His work has been published in Organization Studies, Organization, Human Relations, Business Ethics Quarterly, and the Journal of Business Ethics. He has authored a book on Information Warfare in Business: Strategies of Control and Resistance (London: Routledge, 2005). He serves on the editorial boards of Human Relations, Organization, and Organization Studies.

Adam Nix is a Lecturer in Responsible Business at the University of Birmingham and an Associate of the Lloyd’s Centre for Responsible Business. His research interests include historical research into digital-era business and understanding how wrongdoing and irresponsibility exist in organizational and market contexts.

Sebastian Oelrich is a Post-Doc Researcher of Financial and Management Accounting at Technische Universitaet Dresden, Germany. His research focuses on prevention and detection mechanisms against fraud, including whistleblowing, social-control agents, corporate culture, as well as their interplay. He also gives lectures on fraud and business ethics.

Srikanth Paruchuri is B. Marie Oth Professor of Business Administration in Mays School of Business at Texas A&M University. He holds a PhD from Columbia University. His research focuses on the consequences of significant events to associated actors and on the role of social networks in firm innovation. He has published in several journals including Academy of Management Journal, Strategic Management Journal, and Organization Science. He has served as an Associate Editor at Academy of Management Journal and is currently serving on several editorial boards.

Sabrina Plaß is a PhD candidate at the Management Department at Paderborn University (Germany). Her research interests include CSR, corporate sustainability, business ethics, and behavioral economics. Her current research focuses on experimental studies on whistleblowing and conceptual investigations on corporate digital responsibility.

Timothy G. Pollock is the Haslam Chair in Business and Distinguished Professor of Entrepreneurship in the Haslam College of Business, University of Tennessee – Knoxville. His research focuses on how social evaluations – such as status, reputation, celebrity, and stigma – social capital, impression management activities, and media accounts influence market dynamics, firm outcomes such as market valuations and media coverage, and a variety of corporate governance structures and strategic decision-making outcomes. He is also interested in how entrepreneurs’ experiences and organizational resource endowments influence their strategic decision-making. His research has won numerous awards and been published in all the top management journals. He is also an International Research Fellow with the Centre for Corporate Reputation at Oxford University, a Research Fellow with Haslam’s Neel Corporate Governance Center, has served as an Associate Editor for the Academy of Management Journal, and served on the executive committees of the Organization and Management Theory Division of the Academy of Management and the Organization Science Division of INFORMS.

Jo-Ellen Pozner is an Associate Professor of Management and Entrepreneurship at the Leavey School of Business at Santa Clara University. Before Santa Clara, she was on the Faculty of the Haas School of Business, University of California, Berkeley. Her research focuses on questions of corporate governance and social evaluation, especially the reputational and labor market effects of misconduct at the organizational level on boards of directors. Her current work focuses on the social processes through which publics make sense of and evaluate others in light of wrongdoing. She graduated with a PhD in Management and Organizations from the Kellogg School of Management, Northwestern University, and holds an MBA from the Stern School of Business, New York University, a Masters in Economics from the School of Advanced International Studies, Johns Hopkins University, and a BSFS in International Economics from the School of Foreign Service, Georgetown University.

Sabrina Schäfers is a PhD candidate at the Management Department at Paderborn University (Germany). Her research interests include business ethics, behavioral economics, social norms, and whistleblowing. Her current research focuses on the experimental investigation of effective measures to improve whistleblowing behavior in organizations.

Brigitte Wecker is a Doctoral candidate in Strategic Management at the University of Mannheim, Germany. Prior to joining academia, she worked as a Consultant for McKinsey & Company. Her current primary research interest is corporate misconduct.

List of Contributors

Foreword

Research in the Sociology of Organizations (RSO) publishes cutting edge empirical research and theoretical papers that seek to enhance our understanding of organizations and organizing as pervasive and fundamental aspects of society and economy. We seek provocative papers that push the frontiers of current conversations, that help to revive old ones, or that incubate and develop new perspectives. Given its successes in this regard, RSO has become an impactful and indispensable fount of knowledge for scholars interested in organizational phenomena and theories. RSO is indexed and ranks highly in Scopus/SCImago as well as in the Academic Journal Guide published by the Chartered Association of Business schools.

As one of the most vibrant areas in the social sciences, the sociology of organizations engages a plurality of empirical and theoretical approaches to enhance our understanding of the varied imperatives and challenges that these organizations and their organizers face. Of course, there is a diversity of formal and informal organizations – from for-profit entities to non-profits, state and public agencies, social enterprises, communal forms of organizing, non-governmental associations, trade associations, publicly traded, family owned and managed, private firms – the list goes on! Organizations, moreover, can vary dramatically in size from small entrepreneurial ventures to large multi-national conglomerates to international governing bodies such as the United Nations.

Empirical topics addressed by Research in the Sociology of Organizations include: the formation, survival, and growth or organizations; collaboration and competition between organizations; the accumulation and management of resources and legitimacy; and how organizations or organizing efforts cope with a multitude of internal and external challenges and pressures. Particular interest is growing in the complexities of contemporary organizations as they cope with changing social expectations and as they seek to address societal problems related to corporate social responsibility, inequality, corruption and wrongdoing, and the challenge of new technologies. As a result, levels of analysis reach from the individual, to the organization, industry, community and field, and even the nation-state or world society. Much research is multi-level and embraces both qualitative and quantitative forms of data.

Diverse theory is employed or constructed to enhance our understanding of these topics. While anchored in the discipline of sociology and the field of management, Research in the Sociology of Organizations also welcomes theoretical engagement that draws on other disciplinary conversations – such as those in political science or economics, as well as work from diverse philosophical traditions. RSO scholarship has helped push forward a plethora theoretical conversations on institutions and institutional change, networks, practice, culture, power, inequality, social movements, categories, routines, organization design and change, configurational dynamics, and many other topics.

Each volume of Research in the Sociology of Organizations tends to be thematically focused on a particular empirical phenomenon (e.g., creative industries, multinational corporations, entrepreneurship) or theoretical conversation (e.g., institutional logics, actors and agency, microfoundations). The series publishes papers by junior as well as leading international scholars, and embraces diversity on all dimensions. If you are scholar interested in organizations or organizing, I hope you find Research in the Sociology of Organizations to be an invaluable resource as you develop your work.

Professor Michael Lounsbury

Series Editor, Research in the Sociology of Organizations

Canada Research Chair in Entrepreneurship & Innovation

University of Alberta