Now You See Me: How Status and Categorical Proximity Shape Misconduct Scandalization

Abstract

Despite the formidable consequences for firms of having their misconduct publicized—and thus scandalized—we still know very little about why only some instances of misconduct become scandals beyond the idea that high-status firms’ transgressions are scandalized more often. Focusing on the media’s essential role in scandalizing misconduct, we take a media routines perspective to theorize how the status of past transgressors inside and outside the focal transgressor’s industry creates different contexts that shape the likelihood of scandalization. We argue that the prevalence of past transgressions by high-status firms within the industry leads journalists to scrutinize the misconduct more, amplifying the effect of the focal firm’s status by highlighting its commonalities with past transgressors. In contrast, the prevalence of transgressions by high-status firms outside the industry attenuates the effect of firm status on scandalization by directing media attention outside the industry, thereby limiting the depth of information that can be inferred from the firm’s status. We find that past transgressors’ status and their categorical proximity to current transgressors serve as important boundary conditions for the scandalizing effect of status. Our contribution lies in elaborating on contextual factors that influence how status acts as an antecedent of scandals, and explaining how status and categories feed media routines that influence the likelihood a firm’s misconduct will be scandalized.