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Organizational legitimacy is a central concept in institutional theory and in the more recent stream of communicative institutionalism. Within this scholarship, there exists an elaborated understanding of how macro-level actors, such as news media, influence individual judgments at the micro-level through a top-down communication process. However, little is known about the upward process by which individual propriety judgments influence validity judgments of news media at the macro-level. In this paper, we propose that this upward process of the legitimacy loop is facilitated by the degree to which expressed propriety judgments by individuals create thematic broadness, which bridges stand-alone conversations. Through a study investigating a post-scandal phase in the financial sector, we show how propriety judgments in social media become pre-validated at the meso-level prior to their validation by news media at the macro-level. The presented theoretical framework and empirical insights based on time-series regression analysis provide new knowledge about the multilevel process of organizational legitimacy formation in a digital age and extend our understanding of how a consensus is revealed at the meso-level.

The purpose of this paper is to investigate the impact of scandal on investor valuation of sport by examining changes in share prices of three football clubs involved in the 2006 Italian “Calciopoli” scandal.

Share price variation and volatility across 2006 is analysed for Juventus (the centre of the scandal), Lazio (also involved) and Roma (uninvolved) over different (qualitatively defined) phases of the scandal. Movements in share price are compared to three benchmark indices – FTSE MIB, DJ Stoxx Europe 600, and DJ Stoxx Europe Football – indexed from 2 Jan 2006. Unadjusted analysis of share price movement matched with events to inform the likely causes of variation.

Despite speculation and high volatility, the share price of all three clubs increased by 30 per cent in 2006, outperforming benchmark indices (15 per cent). This suggests the Calciopoli scandal increased the perceived value of the clubs.

Generalisation of these findings requires more sophisticated statistical and econometric analysis of the Calciopoli scandal, and application of the method to other instances of scandals in sport.

Intuitively, scandals in sport have a negative impact. This paper suggests that scandal could have a positive impact on a club's share price and therefore the overall financial value of sport.

There is a dearth of literature on the economic consequences of scandals in sport. This paper contributes to the development of that literature and investigates some economic consequences of a particular scandal in Italian football.

In today’s highly comparative pharmaceutical sector, multiple humanitarian and pricing issues are prevalent within the industry. Mergers and acquisitions (M&A) are perceived to be an essential method for organizational consolidation and value generation. The purpose of this paper is to illustrate via descriptive methodology and t-tests, how a merger can mitigate the effects of fraud in the pharmaceutical sector.

The research focuses on secondary data. This research paper explores the differences in these organizations’ financial metrics using the t-test regression analysis, both pre and post-merger. Secondary data have been used to compile separate financial ratios for five years before and five years after the scandal.

The results indicate a positive outlook for both organizations after the merger. Mergers appear to have a favorable impact on the performance of a company, with the only exception of external variables (laws, controversies, fines, etc.) affecting its post-merger performance.

The paper uses secondary data to test the impact that mergers have on pharmaceutical companies after they have been implicated in corporate malfeasance.

The motivations behind co-branding alliances, the differences in performance between the paired brands and the emergence of “spillover effects” have been pillars of the marketing research agenda for almost three decades. We observe an extensive number of studies on co-branding alliances, combined with multiple theoretical perspectives and empirical approaches informing extant literature. The purpose of this paper is to summarize of the state of the art of this research.

The authors offer a systematic literature review of 190 papers on co-branding alliances. The authors portray a picture of the theories informing co-branding research and build a conceptual framework that summarizes the concepts and variables used in this literature. Finally, 11 interviews with managers and consultants of European firms help to reveal potential problems in practice and needs that are not captured by previous studies.

The authors develop a map of theories used to investigate co-branding alliances and build a conceptual framework linking motivations, co-branding alliance implementation and outputs. Finally, the authors propose a structured research agenda.

The main implication relies on the structured research agenda.

Practical implications include the identification of the variables and dimensions involved in a brand alliance to exploit the strengths and moderate the weaknesses of a brand.

This paper highlights how co-branding is embedded in different contexts and dimensions regarding both firms and consumers. The two maps presented in this study underscore the interdependence among such dimensions. The authors interview marketing experts to validate the conceptual framework and to help us extract the managerial implications that stem from it.

The Volkswagen (VW) emissions scandal was one of the largest examples of organizational wrongdoing in corporate history, costing the firm immense damage to its reputation and over $33 billion in fines, penalties, financial settlements, and buyback costs. In this paper, we draw on the concept of boundary work to provide insight into the causes of wrongdoing at VW. Supplementing other work on the scandal, we show how the ways in which boundaries became established in the organization resulted in an internal context that defined “in” and “out” groups, normalized certain behaviors, and limited communication across intraorganizational boundaries. This allowed wrongdoing to not only become established but also to go unchallenged. We provide contributions to broader understandings of organizational wrongdoing and to the temporal unfolding of boundary work by theorizing how a combination of cognitive, horizontal, and vertical boundaries can create an infrastructure of organizational design that permits organizational wrongdoing, prevents it being challenged, and ultimately normalizes it in everyday activities.

This paper reviews key aspects of the regulatory response in the UK and the USA to the apparent crisis of confidence in auditing stimulated by Enron and other recent corporate scandals. Drawing on a consideration of the nature of the market for auditing services and the regulatory and corporate governance structures in which auditing is embedded, the paper argues that the bulk of recent regulatory attention appears to have been on matters of auditor independence rather than auditor competence. Such a focus is seen to have parallels with former ‘crisis’ eras in the auditing arena, while the analysis presented also raises questions about the status of the auditing function within accounting firms and the capacity of regulatory reform to deliver a fundamentally enhanced auditing function. The paper concludes by stressing the importance of making more transparent what is being done in the name of auditing and audit regulation.

In spite of escalating efforts to curb abuse, fraud, and corruption in Congress, members of Congress persist in violating the norms, rules, and laws that aim to ensure they behave ethically. This chapter combines qualitative and quantitative analysis to describe congressional corruption in the modern era. Case studies illustrate consequential financial scandals while also differentiating four categories of corrupt financial practices.

Existing datasets on congressional scandals span the time period from 1972 to 2010, and this chapter extends the dataset to 2018. The analysis next uses the dataset to answer important questions empirically. Which types of scandals occur more often? Have these scandals grown more common or less common over time? What are the consequences of financial scandals for representatives' careers as public servants?

The role of retailers in influencing consumer attitude during a brand scandal is quite complex, as retailers are in direct contact with both marketers and consumers. The purpose of the exploratory research is to propose a theoretical model to capture the influences retailers exercise on consumers during brand scandals.

A qualitative approach has been adopted in the study. The study employs the grounded theory approach on the data collected by conducting in-depth interviews with 25 retailers.

Four contextual conditions and six behavioral antecedents of the retailer's role in the context of the brand scandal were identified. Then, the study finds that companies tend to follow two broad approaches during a brand scandal to address retailers' queries and apprehensions. On these bases, the study proposes a six-pronged typology to better understand retailers' role in shaping consumers' brand perception.

Existing literature has not paid adequate attention to this aspect of retailers' role in influencing consumer choices during brand scandal. To the best of the authors' knowledge, there is no prior research which investigates the role and influence of retailers in shaping consumer attitude during brand scandals. It is important to underline that the current research advocates retailers' significant role during a performance-based brand scandal. Specifically, the authors explored a health-related defective scandal of a well-known food brand. In addition, the study focuses on traditional grocery retailers, which already have special relationships with their consumers. Based on retailer perspectives, the authors' contribution is also updating the discussion of branding theory in case of scandals. The identified variables and constructs may be used for empirical investigation on the role of retailers in shaping consumer attitudes toward the scandalized brand.

The purpose of this paper is to highlight the circumstances in which a crisis response strategy can compound a crisis, especially a corporate scandal, as evidenced by the case of AWB Limited, where the organisational damage of the “cover‐up” escalated the scandal further and caused additional damage to the company.

The AWB case study provides a unique insight into the application of theories and research on crisis and reputation management and the specific challenges and risks of corporate scandals.

As a specific form of crisis, corporate scandals can easily descend into a secondary or “double crisis” if incorrectly managed, or even mismanaged.

The paper shows that the information provided to the Australian Government's Royal Commission and other documents relating to the management of the scandal by the company further embarrassed AWB and exposed the inappropriateness of the original defensive apologia crisis response strategy pursued by the company.

The AWB case study provides an opportunity for alignment with the crisis response theories of Coombs and De Maria, based on the evaluation of the initial failed response strategy and the more appropriate response eventually undertaken by the company.

The paper offers the additional insights of the author (as a former member of the management team at the company) into the documents tendered to the Royal Commission, which have not been evaluated and studied for their contribution to crisis communication and crisis management.

The purpose of this paper, a set of two studies, is to elaborate on the concept of scansis and its effects upon crisis communication theory and practice. A scansis represents the intersection of a scandal and crisis, essentially when a crisis becomes a scandal. A new term was created due to the varied ways in which the term scandal is used and misused. The effects of scansis on crisis communication are examined through two studies. A scansis is unique because it creates moral outrage and is a function of a perception of injustice coupled with greed.

Experimental design is used in both studies to test for the effects of specific crisis response strategies used during a scansis. The crisis response strategies were manipulated to determine whether or not corrective action with moral recognition is more effective at helping organizations during a crisis than those crisis response strategies that do not contain a moral component.

The two studies found no short-term effect for crisis responses during scansis. This included no difference between corrective action with moral recognition and the other three response conditions for the short-term factors of organizational reputation, negative word-of-mouth intentions, purchase intentions and anger. However, Study 2 found that corrective action with moral recognition was perceived as the most empathetic response and created the lowest levels of moral outrage. The authors postulate that corrective action with moral recognition has a long-term effect after a scansis by creating a positive response that moves organizations away from being stigmatized.

The results raise questions about the current configuration of the intentional crisis cluster articulated in situational crisis communication theory (SCCT). When just consider assessments crisis responsibility, a scansis would be part of the preventable crisis cluster. However, the evaluation of justice and greed suggest a scansis may be a unique crisis type that does not fit within the intentional crisis cluster and the prescribed short-term effects of crisis response strategies recommend by SCCT. The scansis establishes a boundary condition for the limits of crisis response strategies on short-term effects such as reputation and purchase intention. These findings require us to rethink elements of current crisis communication theory.

The lack of short-term benefits should not be an argument for abandoning accommodative crisis response strategies. Practitioners need to realize the limits of crisis response strategies for creating short-term benefits and think about the potential long-term benefits offered by crisis response strategies.

Scansis is a new concept for crisis communication and provides a link between the crisis communication and organizational stigma literatures. The two studies are the first attempts to empirically examine scansis and opens new avenues of thinking and research for crisis communication and organizational stigma researchers.