Corporate Irresponsibility Research Articles

Yes, we care! Consumer emotional responses to corporate neglect of climate change and the role of individual differences

AbstractCompany activities are important contributors to climate change. Consumers take companies' actions toward environment into account when they decide to engage with these companies. We study under which conditions corporate misconduct with respect to climate change outrages consumers, eliciting negative moral emotions. Moreover, we explore the capacity of these negative moral emotions to energize consumer decisions and action tendencies to retaliate against “offending” companies. Testing two moderated mediation models on random samples of 152 adult citizens of the United States and 159 adult citizens of France, we show that negative moral emotions experienced by consumers that witness corporate malfeasance toward the climate determine negative attitudes toward the company and intentions to penalize it. Moreover, for both samples, empathy, collective self, and moral identity moderate the relationship between the perception of corporate irresponsibility and moral emotions, while the effect of political orientation is culturally specific. These findings help to uncover under which conditions consumer hostile responses toward corporate misconduct takes place.

Does Consumer Attitude Mediate the Linkages of Environmental Irresponsibility and Consumer Retaliation Within the Pakistan?

This study examines the role of consumer attitudes as a mediator in the context of Nestlé's Pure Life brand under allegations of illegal mining and environmental irresponsibility. It duly remarks upon a significant lacuna in research regarding Pakistani context-specific retaliation from consumers. The data of the study were gathered from 234 consumers in Lahore. The study employs descriptive, correlation, and regression analyses using SPSS 23.0 to assess the relationship between corporate environmental practices and consumer responses. Findings of this study reveal that while consumers exhibit a negative attitude toward Nestlé's environmental practices, this sentiment does not directly translate into retaliatory actions against the brand. The absence of a direct correlation between corporate irresponsibility and consumer retaliation raises critical questions about the effectiveness of consumer attitudes in influencing corporate accountability. This research underscores the need for further exploration of the dynamics between consumer perceptions and corporate behaviour, particularly in developing markets facing environmental challenges.

Reconceptualising the crimes of Big Tech

ABSTRACT Big Tech holds out a mythology of exceptionalism – promising disruption and innovation, operating on a pristine, otherworldly, abstract, imaginary plane – that is, the immaterial rather than the material. It holds itself out as different and separate from the ‘old’ economy and its concerns about material harms to people and the environment. Whilst there is increasing recognition of the harms of Big Tech, even these seem to be exceptional and epic, posing threats to democracy and our souls. This article argues against glamour of exceptionalism by Big Tech and instead contends that Big Tech epitomises problems of ascribing criminal liability to corporations – on steroids. This article aims to disrupt the myth and cultural imaginary of Big Tech as exceptional by teasing out various themes of legally enshrined corporate irresponsibility to highlight commonalities and to argue that corporations (including those that are part of Big Tech) urgently need to be regarded and regulated as criminal legal subjects. Far from exceptional and immaterial, Big Tech operates by a familiar playbook that enables it to externalise banal, routine harms that can and should be the subject of law.

The Role of Multistakeholder Initiatives in the Radicalization of Resistance: The Forest Stewardship Council and the Mapuche Conflict in Chile

AbstractMulti‐stakeholder initiatives (MSIs) that address sustainability concerns have grown in importance in recent years. These private governance measures involving market, state and civil society actors aim to resolve disagreements between stakeholders through stakeholder engagement practices. However, our empirical study of the Mapuche conflict in Chile shows how a multi‐stakeholder initiative contributed to the radicalization of a protest movement leading to an escalation of violence that left all actors worse off. The implementation of the Forest Stewardship Council (FSC) certification scheme, perhaps the best known MSI, exacerbated existing political discontent among the Indigenous Mapuche peoples who were resisting the expansion of industrial forest on their lands in southern Chile. Our findings indicate that MSIs cannot address the needs of marginalized stakeholders and may further undermine their interests. Our analysis enhances our understanding of the outcomes of MSIs by describing processes of radicalization as well as the role of the state in conflicts. The FSC certification scheme was incapable of addressing the key Mapuche demand for land rights. Instead, it raised false expectations, which coupled with corporate irresponsibility and state repression led to an escalation of violence. The increasing reliance on private governance measures in natural resource management, especially in countries of the so‐called Global South, can further exacerbate existing conflicts and hence it is important to understand how and why MSIs lead to negative outcomes.

Corporate Social Irresponsibility, an Elastic Wall, and a Fragile State: Sign of Hope’s Unfinished Quest to Mitigate Human Rights Violations in South Sudan

Abstract This piece recounts the efforts by NGO Sign of Hope (SoH) to rectify human rights violations in South Sudan, which manifested themselves as drinking water pollution by the oil industry. Committed to exposing and remediating this water contamination, SoH was able to prompt the automobile company Daimler’s CSR to engage in extended dialogue with the oil industry stakeholders in Unity State. Despite a tactful use of various methods ranging from cooperation to confrontation, SoH’s campaign did not lead the oil producers to reverse the harm inflicted on the people of Unity State. When SoH tried to hold these companies accountable, SoH had the impression that it was hitting an elastic wall. This piece identifies lessons which may help to counter corporate human rights violations and compensate for the weakness of CSR in fragile states and in the face of corporate irresponsibility.

Looking at the darker side of the mirror: the impact of CEO's narcissism on corporate social irresponsibility

PurposeThe aim of this article is to highlight the major part played by executives in the escalation of corporate social irresponsibility (CSI). Based on the upper echelons theory, the authors developed a model which shows the essential role of CEOs in explaining CSI. The authors proposed that the key personality traits of CEOs—narcissism—, as well as their power, could explain the degree of CSI.Design/methodology/approachDue to the significant methodological challenges when investigating CSI, the authors explored a novel method for measuring CSI in order to assess the degree of irresponsible behaviors. The authors build a CSI scale based on the perceptions of key informants, i.e. experts with diverse professional backgrounds. The authors apply CSI scale in a sample of 84 Spanish companies that were involved in CSI.FindingsThe results of the authors’ empirical study show the positive and significant influence of CEO narcissism and CEO power on the degree of CSI.Research limitations/implicationsOn the one hand, corporate irresponsibility scandals have relevant social consequences and practical implications. On the other hand, narcissism is a natural feature of managers in top positions that is increasing in societies.Practical implicationsThe authors’ findings may help CEOs, TMTs and corporate boards to acknowledge potential sources of CSI decreasing its likelihood through counterbalancing CEO's power and considering the dark side of narcissism.Social implicationsOn the one hand, corporate scandals have relevant social and practical implications. On the other hand, narcissism is a natural feature of managers in top positions that is increasing in societies.Originality/valueIn this paper, the authors highlight the role of CEOs characteristics and their firms as the key actors for explaining and understanding the degree of CSI.

Honey Adulteration and Corporate Irresponsibility in India: Visualizing Corporate Sustainability

Responsibility is a crucial component of corporate sustainability. Deviation from responsibility is considered as irresponsible corporate practice. The present article highlights the issue of honey adulteration as an irresponsible corporate practice. The study is based on the Centre for Science and Environment investigation report on honey adulteration business in India. The article uses thematic analysis through descriptive research design with an inductive approach to show how honey adulteration is an irresponsible practice within the core area of corporate responsibilities—economic, legal and ethical domains. Honey adulteration is an irresponsible practice by the corporate in its core areas of responsibility and simultaneously affects all the stakeholders in its business relationship. Eventually, it would affect the business’s credibility and sustainability in the long run, if the issues are not appropriately addressed. The findings of the article suggest that to achieve business sustainability, corporations need to internalize and institutionalize the core responsibilities and government guidelines in their business operation. On the basis of the findings, the article offers relevant policy and practical implications for corporate to stay away from irresponsible business practices and suggests scopes for future research in the domain.

Why Bad News Can Be Good News: The Signaling Feedback Effect of Negative Media Coverage of Corporate Irresponsibility

Can bad news also be good news? In this study, I explicate why bad news about firms’ corporate social irresponsibility (CSiR) can be good news for firms. Specifically, I address the role of negative media coverage of CSiR in firms’ corporate social performance (CSP). Drawing on signaling theory, I propose that negative media coverage of CSiR is a form of costly yet effective external feedback to firms’ current social signaling. It, therefore, propels firms to undertake organizational changes to send positive response signals through improved CSP. Furthermore, I argue that this effect is augmented by organizational innovation search, which influences firms’ learning capacity required to improve firms’ CSP. Using a multicountry sample of 1,049 firms between 2007 and 2016, I find that negative media coverage of CSiR induces firms to enhance CSP, and this effect is moderated by organizational innovation search.

How do Russian National Systems of Institutional Absences Shape Insensitive Corporate Environmental Violence of a Russian Extractive Multinational Corporation?

Aiming to develop normative recommendations for preventing corporate irresponsibility (CiR), business and society scholars have adopted strategic approaches—exploring the causal links between corporate social responsibility (CSR) and profitability—and moral approaches—exploring the moral principles of CSR that guide managers. However, some business ethics scholars have recently argued that these studies are too simplistic as they disregard the systemic logics of broader institutional environments that generate ‘bad apples’ firms and managers. Drawing on literature that sheds light on the systemic origin of CiR (i.e. the comparative institutionalist perspective and the critical management perspective), we conduct an in-depth case study on how Russian systems of institutional absences shape insensitive corporate environmental violence of a Russian extractive multinational corporation. In doing so, we develop a novel cultural approach to the analysis of CiR that advances knowledge about the systemic origin of CiR in two ways. First, this approach allows for identifying how the sources of CiR are located within firms’ home national systems of institutional absences, which shape systemic logics of CiR that make corporate violence less traceable by firms and broader society. Second, this approach allows for identifying how governments can sustain and perpetuate insensitive corporate violence through the deliberate and systemic absenting of national institutions that could pressure firms to be more socially and environmentally responsible, thus making negative consequences of corporate violence invisible to firms and broader society. We propose future research directions and suggest policy changes in Russia and other countries with similar systems of institutional absences.

Team identification and sponsors’ altruistic motives on the effectiveness of professional soccer sponsorship

ABSTRACT Research question: In a world where financial investment in sports sponsorship is at risk of committing corporate irresponsibility, how do professional sports team sponsors’ attribute altruistic motives and favorable attitudes towards the fans influence purchasing with decisions? Research methods: For this purpose, a sample of 2,647 fans from two of Portugal's most successful soccer teams completed a questionnaire. A Structural Equation Modelling analysis was carried out to test the model and the hypotheses. Results and Findings: Despite the highly commercial context, the high investments made by the sponsors are seen as altruistic by the fans most identified with the sports team. The model explained 46% of attitudes towards sponsors, but the most relevant result in sponsorship effectiveness was the strong mediating role played by the sponsors’ altruistic motives. Implications: This study extends previous research by providing a unique conceptual framework that highlights the importance of understanding how fans supported by the sponsor's altruistic motives view the sponsor's brand.

Transmission of negative brand-relevant content on social media

PurposeUnderstanding how to predict and manage the spread of negative brand-relevant content is of critical concern to marketers. This paper aims to contribute to this understanding by building on existing anti-branding, brand hate and word-of-mouth literature to explore the factors that lead individuals to engage in the transmission of negative brand-relevant information via social media.Design/methodology/approachA two-phase exploratory design was used. The first stage involved an analysis of negative transmission via comments left on news and brand posts. The second phase of the research involved a series of 13 depth interviews with frequent social media users about their negative brand-relevant transmission behavior to add richness and depth to the findings from the passive observation in the first phase of the research.FindingsThe first phase of the research demonstrated that negative transmission can be both brand-related (e.g. driven by-product or service failure or corporate irresponsibility) and consumer-related (e.g. driven by self or social motives). The second phase of the research clarified that negative transmission often occurs in the absence of brand hate, particularly when it can be used as a covert method of self-enhancement for the transmitter via downward social comparisons.Originality/valueNegative transmission as a form of anti-branding that is more strongly self-related (as opposed to brand) is established, progressing understanding and applications of contemporary media channels. Implications, including how brand-generated controversy and consumer reinforcement can be used to manage negative transmission, are offered.

Irresponsible Corporate Water Actions – Cognitive Judgments and Reactions by Shareholders

Extant literature suggests that cognitive judgements associated with corporate social irresponsibility (CSiR) are distinct and need to be analyzed separately from corporate social responsibility (CSR). This paper specifically focuses on analyzing impact of corporate irresponsibility, within the scope of water actions. We investigate how shareholders evaluate and react to irresponsible corporate water actions by developing a conceptual model. Our model identifies that stakeholder orientation of current irresponsible action, and also of prior CSR and CSiR performance by firms, affect market reactions. Shareholders interpret irresponsible actions towards secondary stakeholders to carry less effects for firms and remain indifferent to such actions, but react negatively when primary and legal stakeholders are affected. We propose that prior primary CSR/CSiR performance mainly drives positive/negative capability reputation, and prior secondary CSR/CSiR performance mainly drives positive/negative character reputation. We further theorize that positive character reputation of secondary CSR performance stimulates insurance-like benefit against earnings loss following an irresponsible event. On the other hand, capability reputation of primary CSR/CSiR performance stimulates greater effects of expectancy violation/conformity. We conduct an event study on negative water news featuring S&P 500 firms during the years 2005 to 2017, to provide some empirical evidence in support of our conceptual model.

Are CEO incentives for corporate social responsibility really effective?

Calls for corporations to act more socially responsible have increased in intensity in recent years. As a result, in an effort to improve corporate social performance, companies have begun to introduce monetary incentives for executives to improve their firms’ CSR engagement. However, insights from stewardship theory, behavioral research into the motivational effects of monetary incentives cast doubt on the supposed effectiveness of such CSR incentives. I argue that these new incentives, by fostering extrinsic motivation and an instrumental decision frame among executives, and crowding-out intrinsic and pro-social motivations, foster symbolic CSR efforts by managers, instead of improving substantial CSR implementation. The analysis of a panel dataset of roughly 1300 large, publicly traded corporations in the US nonfinancial sector over the period form 2002 until 2015 shows that CSR incentives for CEOs only increase the adoption of formal CSR policies, but do not lower the risk of corporate irresponsibility scandals.

From global justice to supply chain ethics

ABSTRACT This article traces a transition in the aspirations of social justice on global scale. The ‘welfare world’ vision of global justice, as it was captured most prominently by the proposals for a New International Economic Order in the mid-1970s, is contrasted with the contemporary ambitions of ‘supply chain ethics’, which seek to infuse transnational corporations with social responsibilities. These visions differ drastically in their ambitions, their epistemologies, and the role they reserve for the state but share a structural outlook on issues of social justice. Following the theme of the Special Issue, the shortcomings and the potential of the current supply chain ethics agenda in addressing the ‘human problems’ associated with corporate irresponsibility are reviewed. The paper suggests that mediating between structure and agency in a way that recontextualises the democratic principle is necessary to challenge power asymmetries in global regimes of production.

The higher they climb, the harder they fall: The role of self‐brand connectedness in consumer responses to corporate social responsibility hypocrisy

AbstractPast research shows how information about corporate irresponsibility that contradicts an organization's social responsibility commitments causes hypocrisy perceptions. Extant research on stakeholder engagement however, has not explained how inconsistent corporate social responsibility (CSR) information affects the perceptions of consumers strongly connected with a brand. This study investigates how, rather than protecting the firm against hypocrisy perceptions, self‐brand connectedness magnifies the negative effect of inconsistent CSR information. We tested the research hypotheses across two experimental studies, using both fictitious and real brands in two different industries. We estimated a multi‐group structural equation model model to show how self‐brand connectedness increases people's willingness to distance themselves from the hypocritical brand. Results show that consumers that feel close to the hypocritical brand have a stronger desire to disengage their identity from the brand and protect their self‐esteem. The desire to avoid the brand in turn drives more negative consumer reactions in terms of brand attitudes, brand loyalty and negative word of mouth. Our findings contribute to the literature by demonstrating that a close relationship between the consumer and the brand may aggravate behavioral reactions to hypocrisy perceptions. This is the first study to consider how hypocrisy perceptions influence attitude and behaviors of consumers that are closely connected to the company. Our results extend research on hypocrisy perceptions and brand avoidance by showing that closely connected consumers are especially likely to reject brands that send inconsistent messages about their involvement in CSR.

Pesticides, Corporate Irresponsibility, and the Fate of Our Planet

Over 50 years ago, Silent Spring awoke the world to the environmental and human health risks of the era’s pesticides. Industry pushed back, but eventually many of these chemicals were banned. Although this was a victory, similar battles play out each time evidence surfaces about the potential harm of new agrochemicals.

Envy, Jealousy and Insider Trading: The Case of Martha Stewart

Envy, Jealousy and Insider Trading: The Case of Martha Stewart

The Case of Judicialization of Corporate Social Responsibility in China

With the increasing popularity of contemporary corporate social, responsibility (CSR), this article takes a perspective of judicialization, of CSR, namely how the judicial means can be, employed for addressing CSR-related issues in contrast to the, conventional wisdom on enhanced disclosure and market force., In order to have a comprehensive picture, this article examines, Chinese judicial judgment practice in the context of the broad, interpretation of CSR, which includes economic and legal, responsibility, and case studies in the context of narrow interpretation, of CSR, which only includes responsibility over and, beyond economic and legal requirements. This article then, identifies the main challenges and problems of CSR in China, together with the unique situation in China. It concludes by, recommending more substantial and enforceable contents for the, CSR provisions in order to provide both courts and claimants, with more guidelines to exercise judicial means for addressing, core issues involved in CSR. Judicialization, CSR, enforcement, corporate irresponsibility, China.

Corporate irresponsibility and stock price crash risk

AbstractWe investigate the impact of corporate irresponsibility on future stock price crash by employing a unique dataset of 1,529 penalties imposed on 411 United States (U.S.) firms, from 2003 to 2015. We provide robust evidence that the total amount of penalties (in U.S. dollars) imposed on firms are negatively associated with firm‐specific future stock price crash risk. Our findings are consistent with the following view that imposition of penalties remove uncertainty about a particular firm's future, investors please that the case is closed, the firm successfully manages the aftermath of misconduct and the firm's financial gains are often larger compared to the total cost of the penalty imposed. Moreover, we find corporate social responsibility (CSR) to be a channel through which penalties impact stock price crash risk. Our findings demonstrate that the negative association between monetary penalties and stock price crash risk is more pronounced in the postfinancial crisis and in environmentally sensitive firms.

Foreword to the New Thinking on Business and Human Rights Special Issue

In the mid-1990s, many corporations questioned the relevance of human rights to business. But since then a combination of factors, including some high-profile acts of corporate irresponsibility and...