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Article
Publication date: 13 May 2019

Zheming Liu, Saixing Zeng, Xiaodong Xu, Han Lin and Hanyang Ma

The purpose of this paper is to investigate how revelations of corporate misconduct are associated with trade credit. Specifically, it investigates how this association…

Abstract

Purpose

The purpose of this paper is to investigate how revelations of corporate misconduct are associated with trade credit. Specifically, it investigates how this association varies in different regions, in different types of industries and in response to companies’ subsequent charitable donations.

Design/methodology/approach

The authors empirically tested various hypotheses using a sample of 2,725 Chinese A-share listed companies from 2009 to 2014 based on signaling theory. Fixed effect models underpinned the methods used.

Findings

The authors found that corporate misconduct has a significant negative impact on an irresponsible company’s trade credit received and granted, and the negative impact is heterogeneous for different regions and industries. There is no evidence that charitable donations mitigate the effect on the trade credit of irresponsible companies following revelations of corporate misconduct.

Practical implications

The results suggest that listed companies in China should obey national and local laws and regulations if they wish to avoid the risk of significant trade credit loss. If a company’s violation of these laws and regulations is disclosed, making charitable donations is not an effective strategy for safeguarding trade credit.

Originality/value

This study enriches understanding on the consequences of corporate misconduct and extends the literature on trade credit. It fills a research gap by identifying the impact of corporate misconduct on trade credit.

Details

Chinese Management Studies, vol. 13 no. 3
Type: Research Article
ISSN: 1750-614X

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Article
Publication date: 11 July 2016

Gary Davies and Isabel Olmedo-Cifuentes

This paper aims to identify a typology of corporate misconduct affecting trust; to test the relative ability of individual misconducts to reduce trust and; to explain…

Abstract

Purpose

This paper aims to identify a typology of corporate misconduct affecting trust; to test the relative ability of individual misconducts to reduce trust and; to explain differences in how individuals respond to corporate crises.

Design/methodology/approach

The main research design uses conjoint analysis. Respondents (n = 404) rated eight combinations of six types of misconduct, identified from prior work on trust as likely to reduce trust. Initial levels of trust were established by varying both country of origin and product type.

Findings

The importance ranking for the six types was consistent across most conditions, with “bending the law” and “not telling the truth” as the most salient and “acting unfairly” and “acting irresponsibly” as the least salient in damaging trust. The characteristics of the respondent influenced the effect size.

Practical implications

As loss of trust represents loss of reputation, understanding how and when the framing of misconduct damages trust is important in managing reputation risk. The impact of any report of misconduct can be moderated if attributed by a company, the media or the individual, to a type that is less damaging to trust.

Originality/value

This study adds to our understanding as to why individuals respond differently to corporate misconduct, and contributes to prior work on reputation damage. The typology of corporate misconduct developed and tested here offers a different framework for researchers and practitioners with which to explore loss of trust and to develop existing crisis communication theory.

Details

European Journal of Marketing, vol. 50 no. 7/8
Type: Research Article
ISSN: 0309-0566

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Article
Publication date: 1 August 2003

Spero C. Peppas

Recent news of corporate misconduct at Arthur Andersen, Enron, WorldCom, etc., has focused attention on ethics in business. Government, business, educational institutions…

Abstract

Recent news of corporate misconduct at Arthur Andersen, Enron, WorldCom, etc., has focused attention on ethics in business. Government, business, educational institutions, as well as professional organisations have had to rethink ways of addressing this issue. This article presents the findings of a study of attitudes toward business codes of ethics. The attitudes of Master’s‐level US business students at two different points in time, before and after recent reports of corporate misconduct, are compared to see what changes had occurred, to see whether these changes were linked to the disclosures of unethical corporate conduct, and to examine whether taking a course in ethics had an effect on attitudes.

Details

Management Research News, vol. 26 no. 6
Type: Research Article
ISSN: 0140-9174

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Article
Publication date: 1 April 2019

Alexander Glebovskiy

This paper aims to discuss criminogenic elements and processes inherently presented in business organisations that affect the emergence of crime committed in or by…

Abstract

Purpose

This paper aims to discuss criminogenic elements and processes inherently presented in business organisations that affect the emergence of crime committed in or by business organisations.

Design/methodology/approach

This conceptual paper, based on relevant literature regarding a range of crime-coercive and crime-facilitative elements and forces that promote corporate crime, considers business organisations as a cogent unit of analysis to discuss the causation and origin of corporate crime.

Findings

Business organisations are, per se, criminogenic, i.e. companies are latently prone to committing crime, but are not necessarily criminal. By seeking to achieve commercial goals, companies can unintentionally create an atmosphere that invites crimes and unethical conduct. Organisational criminality is not primarily influenced by deviance in individual behaviour, but is a product of the organisation’s criminogenic settings and environment. Criminal activity arises from contact with criminogenic systems and employees’ adaption to organisational behaviours that do not meet the highest ethical and moral standards.

Research limitations/implications

This is a theoretical analysis, lacking empirical research.

Practical implications

This study can help anti-fraud and compliance practitioners to develop anti-fraud strategies to prevent corporate crime at its source and further discussion on the causes of corporate misconduct and progresses the debate on the sources of illegal and unethical behaviour displayed in, and by, business organisations.

Originality/value

This paper highlights intrinsic features of business organisations that influence companies and employees to engage in illegal activities, malpractice and unethical behaviour and provides a conceptual framework and insights into the realm of inherent criminogenesis within business organisations and how this is shaped by organisations themselves.

Details

Journal of Financial Crime, vol. 26 no. 2
Type: Research Article
ISSN: 1359-0790

Keywords

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Book part
Publication date: 3 September 2018

Wan Nailah Abdullah and Roshima Said

The chapter focuses on the personal characteristics of top executives in companies involved in corporate financial crime as well as the introduction of human governance as…

Abstract

The chapter focuses on the personal characteristics of top executives in companies involved in corporate financial crime as well as the introduction of human governance as one of the mechanisms in preventing corporate misbehaviour. This chapter discusses directors’ and top management teams’ personal characteristics – in the context of corporate governance – that may influence the occurrence of corporate financial crime. The study further proposes the human governance factor as a possible mechanism to improve corporate governance in preventing such misbehaviour. This chapter highlights the personal characteristics of top executives, which may become the indicators of corporate financial crime, as well as human governance, which is shown to be one of the most important mechanisms of corporate governance for corporate financial crime prevention.

Details

Redefining Corporate Social Responsibility
Type: Book
ISBN: 978-1-78756-162-5

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Abstract

Details

Corporate Fraud Exposed
Type: Book
ISBN: 978-1-78973-418-8

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Article
Publication date: 5 April 2021

Dane K. Peterson, Cathryn Van Landuyt and Courtney Pham

This paper examines how the inferred motives for corporate philanthropy relate to the types of charitable causes supported.

Abstract

Purpose

This paper examines how the inferred motives for corporate philanthropy relate to the types of charitable causes supported.

Design/methodology/approach

Published data were obtained for 256 publicly traded and private corporations from a variety of sources.

Findings

The results demonstrated that a number of motives were not significantly related to total charitable giving, but were related to how charitable funds were distributed to various charitable causes. Thus, the study provides insights on the strategic use of corporate charity as means of achieving various business objectives and advancing a theoretical understanding of corporate philanthropy strategies.

Research limitations/implications

This study only investigated some of the presumed motives for corporate philanthropy. Even for the motives investigated in this study, no attempt was made to examine all the motivational factors that determine the level of need for a specific motive. Thus, while the present study provides some of the first evidence of a relationship between motivational factors and data on the types of charitable causes supported, there are other motivational factors that could be investigated in future studies.

Practical implications

The results have a number of implications for managers of nonprofit organizations such as marketing/targeting potential donors. Additionally, the results could be useful for managers of for profit firms in terms of comparing corporate strategies with competing firms.

Originality/value

The study provides a framework for investigating the relationship between motivational factors and types of charitable causes supported.

Details

Journal of Strategy and Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1755-425X

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Article
Publication date: 11 February 2021

Sam Kris Hilton and Helen Arkorful

The barrage of corporate scandals has become pervasive such that it collapsed high-profile organizations worldwide. Prior studies show that reporters of corporate scandals…

Abstract

Purpose

The barrage of corporate scandals has become pervasive such that it collapsed high-profile organizations worldwide. Prior studies show that reporters of corporate scandals encounter a number of challenges which discourages them from disclosing wrongful acts to appropriate authorities to effect action. Thus, this study aims to examine the remediation of the challenges of reporting corporate scandals in governance.

Design/methodology/approach

The study used cross-sectional survey design. Primary data was obtained from 400 employees of selected organizations and analyzed using descriptive statistics, correlation and regression techniques in Statistical Package of Social Science.

Findings

The results confirm that reporters of corporate scandals are confronted with challenges such as victimization, fear, suspension/dismissal, sideline and high power distance. However, these challenges can be remediated through award, code of conduct, free expression, participation/consultation and safeguard regulations to encourage and protect reporters of corporate scandals.

Practical implications

The findings imply that there should be an award scheme for reporters, and this must be made known to all employees. Furthermore, code of conduct for employees should include reporting of scandals together with its associated benefits and sanctions. Also, organizations would have to practice consultative/participatory governance system to minimize the effect of high power distance. Finally, regulations should be enacted and enforced to safeguard reporters of corporate scandals.

Originality/value

This research consolidated the challenges associated with reporting corporate scandals and provides remedies to curtail such challenges so as to encourage employees to report corporate scandals.

Details

International Journal of Ethics and Systems, vol. 37 no. 3
Type: Research Article
ISSN: 2514-9369

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Article
Publication date: 12 July 2018

Claude Francoeur, Caroline Aubé, Samuel Sponem and Faranak Farzaneh

The fundamental role of corporate boards is to monitor and advise top management on strategic issues. It is therefore of the utmost importance that corporate directors are…

Abstract

Purpose

The fundamental role of corporate boards is to monitor and advise top management on strategic issues. It is therefore of the utmost importance that corporate directors are effective as a decision-making group to ensure corporate performance (Zattoni et al., 2015; Minichilli et al., 2012). But, what do we know about what is really going on inside the boardroom? This study aims to shed light on this important question.

Design/methodology/approach

The authors undertake a targeted review of the literature to take account of all publications regarding board dynamics in relation to board effectiveness.

Findings

This study shows that we know very little about what is going on inside the “black box” of board dynamics and its relation to how effective directors are at doing their job, namely, monitoring and advising top management and establishing and expanding the firm’s network, to gain access to the resources it needs. The authors propose several avenues of research to better understand board dynamics.

Originality/value

In this study, the authors show how and why the present body of knowledge on team effectiveness should be harnessed to better understand corporate board dynamics in relation to board effectiveness.

Details

Team Performance Management: An International Journal, vol. 24 no. 5/6
Type: Research Article
ISSN: 1352-7592

Keywords

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Book part
Publication date: 19 April 2017

Abstract

Details

Geography, Location, and Strategy
Type: Book
ISBN: 978-1-78714-276-3

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