Business Ethics: A European Review, EarlyView.

Abstract‘Monkey see, monkey do’ is an old saying referring to imitating another's actions without necessarily understanding the underlying motivations or being concerned about consequences, such as propagating harmful behaviors. This study examines the likelihood of firms imitating and proliferating others’ unethical, irresponsible practices thereby exacerbating harmful effects among even more firms; in doing so, irresponsible contagions can rapidly spread more broadly, negatively affecting even more consumers. Building upon rivalry- and information-based imitation theories, we examine if harmful behaviors of others, in (...) combination with misbehavior of referent firms, influences the likelihood of a firm to engage in irresponsible consumer-related practices. After examining 25,824 firm-year observations over 12 years, our findings suggest that imitation of harmful product-related behavior occurs; with size an important factor related to proliferation of harmful behaviors. Testing the model against a holdout sample finds 94% accuracy. Implications for scholars, managers, and policy makers are explored. (shrink)