Organizational corruption has recently attracted considerable scholarly attention, especially since its devastating effects following recent major corporate scandals, the worldwide economic crisis of 2009, and the current European Union monetary crisis. This paper is based on the analysis of three distinct, yet contextually related, case studies in a European Union member state: (a) an incident of corruption by a minister in an adjudicative role, (b) widespread financial misreporting and perjury within an organization, and (c) abuse of due process and obstruction (...) of justice by civil servants within a ministry. These cases serve to illustrate, for the first time, Aguilera and Vadera’s (in J Bus Ethics 77:431–449, 2008 ) framework of organizational corruption, which relates distinct types of a corrupter’s opportunity, motivation, and justification with the type of corruption present in the organization. Furthermore, the data suggest how the framework may be extended and reveal conceptual issues that require reconciliation. This study attempts such reconciliations and offers some suggestions on how the findings may be utilized by policy reformers or corruption controllers. (shrink)

Although legitimacy theory provides strong arguments that environmental, social and governance disclosure and performance can help mitigate firm-specific risks, this relationship has been repeatedly challenged by conceptual arguments, such as ‘transparency fallacy’ or ‘impression management’, and mixed empirical evidence. Therefore, we investigate this relationship in the revelatory case of initial public offerings, which represent the first sale of common stock to the wider public. IPOs are characterised by strong information asymmetry between firm insiders and society, while at the same time (...) suffering from uncertainty in firm legitimacy, culminating in amplified financial risks for both issuers and investors in aftermarket trading. Using data from the United States, we demonstrate that voluntary ESG disclosure reduces idiosyncratic volatility and downside tail risk and higher ESG ratings have lower associated firm-specific volatility and downside tail risk during the first year of trading in the aftermarket. We provide theoretical arguments for the relationships observed, suggesting that companies striving for ESG performance and communicating their efforts signal their compliance with sustainability-related norms, thus acquiring and upholding a societal license to operate. ESG performance and disclosure help companies build their reputation capital with investors after going public. We also report that ESG disclosure is a more consistent proxy for ex-ante uncertainty as an indicator of aftermarket risk, thereby replacing some of the more conventional measures, such as firm age, offered in the existing literature. (shrink)

It is widely acknowledged that corruption by any firm is problematic. More importantly, its negative effects are compounded when corruption is present in large firms with global reach and corruption ceases to be a single instance but becomes a reoccurring or perpetuating phenomenon over time. Though the magnification of corruption over both time and size of operations creates scale effects that amplify its detrimental consequences, this context remains largely unexamined empirically. Thus, our research question is: What are the factors that (...) contribute to corruption by large global firms? Drawing on institutional theory, we examine the normative pressures that interact to create a vortex of corporate corruption that persisted over several years. We analyze a 9-year longitudinal dataset of 469 unique FT Global 500 companies representing 31 primary industries and 33 countries with over 3700 company year observations. Results help disentangle a complex interaction of firm-level and headquarters country-level factors that drive corruption and impact performance among top global firms. (shrink)

Unethical pro-organizational behavior is one of the core factors that affect organizational development. Although enterprises and researchers have done a lot of work, a quantitative and systematic assessment of unethical pro-organizational behavior research is still lacking, this review conducts a bibliometric analysis to describe the characteristics and trends of unethical pro-organizational behavior research in business and management, such as publication trend analysis, co-citation analysis, keywords co-occurrence analysis, and citation burst analysis. The results show that 89 articles and 4,523 references from (...) 49 journals contributed by 254 authors are identified. The number of publications has increased significantly since 2019. The China and United States are the most productive country. Umphress E and Yam C are the most influential authors. “Journal of Business Ethics and Frontiers in Psychology” are the most influential journal, 26 words in 516 keywords constitute the strongest set of terms available, Keyword co-occurrence analysis found ethical decision-making, the measurement, and impact of unethical pro-organizational behavior, the antecedents of ethical leadership are worthy and prospective potential trends. These findings provide a systematically, transparently, and visually reviewed the landscape and development process of unethical pro-organizational behavior research, which may help researchers and practitioners to understand unethical pro-organizational behavior in business management and provide a new perspective for future research. (shrink)

We extend the theory of secular business cults (SBCs) to manipulative businesses (MBs), which we define as a financially‐successful type of reformed SBC, and explain their influence on industry, government, and social environments. Prior work on irresponsible, illegally‐behaving, and anti‐social SBCs suggests that they arise when antisocial business leaders are left unconstrained. This article examines the other side of this argument: What emerges from the 'toxic triangle' when such leaders are constrained by legal limits? We posit that pressure from lawsuits (...) leads to the metamorphosis of an SBC into an MB that retains the intent and "formula of success" of the SBC. In both business types (SBCs and MBs), the underlying process involves the unethical manipulation of the employee's commitment, and the buyer's interest, through established policies and business models for higher profits. We further explain how the profit‐seeking anti‐social business leaders who find success in the toxic triangle lead to the emergence of manipulative policies and practices in businesses, legal systems, and industries (the “iron triangle”), and eventually influences general societal norms. (shrink)

Many destructive business leaders drive their companies into bankruptcy and dissolution, never to be heard from again in the business press. However, it is useful to study these organizations to prevent the same, or similar destructive business from taking on, and destroying, additional businesses. In this article, we describe one type of organization that follows the model of religious cults, which we call secular business cults. Building on Padilla et al., we describe an SBC toxic triangle of (1) Padilla et (...) al.'s societal factors, (2) additional business factors, and (3) antisocial actors that set the stage for the SBC's emergence. We then describe the characteristics of the SBC's operations, such as an ultrastrong culture, formalized manipulation, manipulative hierarchical relationships, competition, and operations efficiency tools, and the frequent overcommunication of deceptive messages. It is our hope that this unique perspective on organizations will inspire research into an overlooked area of unethical behavior in businesses today. In our Part II paper on the topic, we intend to extend the idea of SBCs to manipulative businesses, which are essentially reorganized, well‐established and legally‐complying revisions of SBCs, and then to manipulative industries and societies. (shrink)

In the face of the business community’s widening concern about corporate ethical behavior, business schools are reexamining how they ensure that students appreciate the ethical implications of managerial decision making and have the analytical tools necessary to confront ethical dilemmas. The current approaches adopted by colleges vary from mere ‘lip service’ to embedding ethics at the core of the curriculum. This paper examines the experience of several US universities that have incorporated business ethics into their curricula. In particular, the paper (...) describes the issues facing Central Washington University as it seeks to integrate ethical decision making into its core undergraduate business curriculum. Issues addressed include the technical challenges of establishing a common element of curriculum across the various business disciplines, determining the major conceptual foundations of ‘ethical thinking’ while recognizing students’ existing value systems, and how to obtain ‘buy in’ by faculty to the initiative. (shrink)

This study explores the rationality behind firms’ decision to admit or deny their involvement in bribery when responding to confidential surveys conducted by international agencies. Specifically, we posit that firms’ reluctance to provide accurate information about their engagement in bribery is at least to some extent contingent on certain situational factors. In other words, we claim that this behavior is context dependent. The paper uses the notions provided by the theory of planned behavior to understand the way in which the (...) corruption of the legal environment, the intensity of market competition, and identification risk influence firms’ decision to lie about their involvement in bribery. To test these notions, we use databases from the fifth wave of the EBRD-World Bank Business Environment and Enterprise Performance Survey, country-level data from the Kauffman Foundation and macroeconomic information from the World Bank database. We run ordinary least squares with geographic region-clustered standard errors on data from 30 countries and 6122 individual firms during the period 2012–2013. Consistent with our expectations, the results indicate that firms operating within more corrupt legal environments, facing more competition, and bearing a higher risk of being identified are less likely to deny their involvement in bribery. We conclude that not all firms have the same incentives to lie about their participation in bribery, and therefore, identifying the drivers of this heterogeneity may help policymakers better assess the reliability of bribery information collected through confidential surveys. (shrink)

This study uses a rational ethical decision-making framework to examine the influence of moral intensity (potential harm and social pressure) on whistleblowing intention and behaviour using organisational commitment as a moderator. A scenario was developed, and an online questionnaire was used to conduct an empirical analysis on the responses of 533 participants. The mean age and years of work experience of the respondents were 31 and 8.2 years, respectively. The results show, first, that while moral intensity is correlated with whistleblowing (...) intention, only the potential harm is positively correlated with such intention. Second, potential harm and social pressure differentially affect whistleblower choice of using an internal or external channel. Third, organisational commitment has a moderated mediation effect among moral intensity, whistleblowing intention and behaviour. Fourth, whistleblowers may be grouped into four conceptual types: indifferent, rebel, mature and spoil. Finally, theoretical and managerial implications of the findings are discussed. (shrink)

The use of technology in marketing has become an increasingly important competitive tool in developing and maintaining efficient and productive customer relationships. However, the ethics of using this technology has received little attention. This study investigates how and if marketing organizations are adapting their ethics policies to incorporate use of sales technology (ST). Based on in-depth interviews with executives from a variety of highly regulated to nonregulated business-to-business and business-to-consumer industries, our results show that, although most organizations indeed have codes (...) of ethics, there appears to be a gray area of how these codes address ST. Further, it appears that monitoring the ethical use of ST varies and can be a frustrating and time-consuming issue for marketing and sales executives. Implications of our findings are discussed for the benefit of marketing practitioners, ethics managers, and researchers. (shrink)

This article explores the hypothesis that third parties are motivated to seek information about agents who have behaved unethically in the past, even if the agent and available information are irrelevant to the third parties’ goals and interests. We explored two possible motives for this information seeking behavior: deonance, or the motive to care about ethics and justice simply for the sake of ethics and justice, and distrust-based threat monitoring. Participants in a consumer decision task were found to seek out (...) information about an agent who had behaved unethically even when the agent was explicitly excluded from the task; there were no intentions to purchase from the agent; performance expectations for the agent’s product were low; the information that could be sought was non-diagnostic, redundant or irrelevant to an ethical judgment; and alternatives in the market offered as good or better value as the unethical agent. Critically, this information seeking took place even when the observer could disengage from and was not vulnerable to the agent. The findings are discussed in terms of third party information seeking and its effects on ethical behavior in the marketplace. (shrink)