Impact Of Scandals Research Articles

Ethical and Corporate Governance Issues in Multinational Companies

The events that caused Parmalat, a multinational conglomerate, to commit a big accounting fraud and go bankrupt are discussed in this case report from the perspectives of ethics and corporate governance. The report also discusses the steps that multinational corporations should take to ensure ethical practices and solid governance structures and processes to lessen their exposure to the repercussions that other corporations that have collapsed, with a specific focus on Parmalat, have experienced. It emphasises how Parmalat's failure was ultimately caused by a poor and inadequate corporate governance system that also contributed to other issues, leading to its demise. Following this, the first section outlines the scandal facts, including what fraudulent acts occurred, who committed them, the scandal's impact, and the measures taken to resolve the problems. The second section discusses the key theoretical ideas that explain why the scandal occurred, and the final section provides an overview of the major issues, implications, and suggestions.

The potency of digital media: group chats and mediated scandals in the Philippines

With widespread use of digital media, public figures and ordinary people easily become involved in scandals. Social media leaks and mobs illustrate how digital media figure into scandals in the context of everyday politics. The occurrence of scandals on digital media prompts questions on emerging dynamics and potentials of digital communication. Using case studies from the Philippines, this study identifies and examines digital media affordances and how they enable mediated scandals. Findings indicate that digital media facilitate the process and intensify the impact of scandals, particularly the effects of public condemnation. However, under certain conditions, digital media enable parties to counter allegations and mobilise support. The article reflects on the possibilities and potency of digital media in everyday politics of reputation.

The Personal is Political: Reconsidering the Impact of Scandals on Congressional Incumbents

While a number of studies reveal that incumbent members of the House of Representatives are adversely affected by scandal, rarely do these studies analyze a scandal’s impact both on election outcomes and the decision to run for reelection. Studies of retirements in particular, moreover, rarely analyze separately the effects of private (i.e., sex and other moral scandals) and public (i.e., corruption and procedural) scandals or consider media coverage of the scandal. This research proposes that members of Congress involved in private and public scandals will be more likely to retire and win a smaller percentage of the vote than members not involved in a scandal, that private scandals will be more impactful than public scandals, and that the higher level of media coverage further harms an incumbent’s congressional career. Also explored is whether the consequences of sex and other scandals were greater for accused members in the 115th Congress than in past Congresses because of heighted awareness and attention to sexual assault in the workplace since the 2016 presidential election and subsequent #MeToo campaign. From data collected over 10 Congresses (106th–115th Congresses) and elections (2000 through 2018), the results show that incumbents who are involved in a sex scandal or other private scandal are substantially more likely to retire than members not involved in a scandal but that public scandals do not matter. In addition, both sex scandals and corruption scandals reduce the incumbent’s vote share in the general election but that sex scandals matter slightly more. Higher media coverage affects both the decision to retire and the share of the vote. There is no evidence of a more pronounced direct effect of sex scandals on retirement decisions in the 115th Congress and scandals more generally on the share of the vote in the 2018 elections.

Parking tickets and police reform: an analysis of the development and impact of police scandals

ABSTRACT While police scandals are often assumed to arise from major forms of misconduct, here I argue that minor or banal events can also precipitate scandals and mobilise significant reform initiatives. My argument is based on a case-study analysis of two scandals surrounding allegations of misconduct in relation to road traffic policing in Ireland. The first case involved allegations that ‘fixed charges notices’ (issued for various driving offences) were cancelled inappropriately. The second case emerged from disclosures surrounding the vast over-counting of the number of roadside breath-tests conducted by police officers. Although these events may appear banal at first glance, they had an enormous effect on the policing landscape. Drawing on analysis of the numerous inquiries and investigations into these events, I suggest that the impact of scandal is amplified when two factors are present. First, the scandal surrounding an issue grows when it serves as a catalyst, adding to the momentum of other concerns. Second, a scandal is also magnified when it raises systemic concerns that extend beyond any individual misconduct and call into question basic features of organisational competence and legitimacy.

The impact of scandal on sport consumption: do different scandal types have different levels of influence on different consumer segments?

ABSTRACTResearch question: How, and to what extent, do different scandal types influence sport consumption behaviors – measured as intended media viewership – across different consumer profiles?Research methods: A Best–Worst Scaling choice experiment is run on data gathered from consumers who are fans of the Australian Football League and latent class modelling is used to identify consumer profiles.Results and findings: The findings suggest that different scandal types lead to different viewing intention effects on consumers, sexual assault, illicit substance use, doping and organized match fixing are likely to produce the most negative outcomes of the 13 scandal types examined. Five distinct consumer profiles emerge from the results in terms of their relative reactions to a scandal.Implications: Conceptually, the study indicates that consumers respond to different types of scandals and the responses vary by consumer profile. The findings demonstrate that sports managers need to consider a contingency-based approach when managing scandal based on the heterogeneity this study observed across both scandal types and consumer profiles.

Depositors Disciplining Banks: The Impact of Scandals

Do depositors react to negative non-financial information about their banks? By using branch level data for the United States, I show that banks, that financed the highly controversial Dakota Access Pipeline, experienced significant decreases in deposit growth, especially in branches located closest to the pipeline. These effects were greater for branches located in environmentally or socially conscious counties, and data suggests that savings banks were among the main beneficiaries of this depositor movement. Using a global hand-collected dataset on tax evasion, corruption, and environmental scandals related to banks, I show that negative deposit growth as a reaction to scandals is a widespread phenomenon.

Judging Incumbents’ Character: The Impact of Scandal

This article uses panel survey data from 2010 to 2012 to examine how scandals affect perceptions of House incumbents’ character. Scandals negatively impact impressions of the incumbent’s integrity, indicating that voters incorporate information about their representatives’ behavior. Scandals’ effects on attitudes are shown to vary depending on the type of misbehavior that is alleged, with sex scandals having far deeper and wider impact than other types of scandals. Scandals significantly influence the vote choice, although impressions of the incumbent’s integrity mediate more than one-third of their effect.

How Voters Punish and Donors Protect Legislators Embroiled in Scandal

Previous studies have largely overlooked three key components of a scandal that could determine how it shapes election outcomes: the extent to which it is covered in the media, the potential that donors respond differently than voters, and the likelihood that the impact of scandals have changed over time. Examining U.S. House scandals between 1980 and 2010, we find that while scandal-tainted politicians receive fewer votes and are less likely to win than otherwise similar legislators not embroiled in scandal, donors actually contribute more money to their campaigns after the scandal’s revelation. Both of these effects, however, are limited to financial and sex scandals that garnered national media attention. Moreover, we find that voters are less punitive and donors are even more supportive in the post-1994 period of nationalized electoral politics.

How Citizens React to Political Scandals Surrounding Government Leaders: A Survey Study in Hong Kong

Public opinion research has suggested that the negative impact of scandals on public evaluation of the politicians involved is not always strong. Part of the reason is that people may hold varying perceptions regarding the nature, factuality, and importance of the scandals. According to the theory of motivated reasoning, people develop varying perceptions by processing information in ways that reconfirm their existing views. This study applies such insights to analyze how citizens react to political scandals surrounding government leaders in Hong Kong, where such scandals have arguably become increasingly prominent in recent years. This study constructs a theoretical model linking prior political attitudes, scandal-related perceptions, response evaluation, and evaluation of politicians. Analysis of survey data confirms most of the hypotheses in two cases. External efficacy and support for democracy substantially influence perceived factuality and acceptability of the scandals. Such perceptions shape people's evaluations of the responses by the government and the officials involved, which in turn affect evaluation of the officials.

The Impact of Scandals on Mutual Fund Performance, Money Flows and Fees

We examine the effects of fraud committed by mutual fund managers taking into account the dual responsibilities managers have for their employer firm and investors. Performance increases in the immediate aftermath of a scandal being reported, followed by a significant drop suggesting fund managers actively preempt the fallout from fraud disclosures. Investors who remain with a scandal fund under-perform by an average of 48 basis points in the subsequent year. Fraud is punished by reduced fund inflows to affected funds. Underperformance and money outflows are more severe with higher monetary fines, regulatory actions initiated by SEC, and the involvement of more than one regulatory body. Scandal funds reduce their expense ratios, possibly to retain and attract investors. This effort allows scandal funds to delay asset fire sales by up to a quarter. However, fund families reduce expenditure on marketing and distribution costs, likely to ameliorate the fallout from scandals by withdrawing affected funds from the limelight.

Not All Disasters are Equal in the Public's Eye: The Negativity Effect on Warmth in Brand Perception

Warmth and competence are fundamental dimensions used to characterize people, animals, and even corporations. Based on observations from a preliminary survey (Study 1) on the impact of scandals on several brands, we predicted that an organization that caused a disaster would be judged more harshly if its warmth rather than competence reputation was called into question. Study 1 surveyed a nationally representative sample of American adults and results showed that not all scandals had the same consequences on the perception of warmth, competence, and on consumer attitudes. Study 2 suggested that framing the cause of a local environmental disaster in terms of low warmth resulted in harsher judgements toward the responsible organization than framing the cause related to incompetence. Study 3 found that a warmth frame for post-disaster clean-up was ineffective compared to a competence frame. These results suggested that warmth and competence shape perceivers’ blame attribution following a corporate or organizational disaster.

Abstract P1-09-21: Impact of the benfluorex scandal on French cancer patients’ attitude toward clinical trials

Abstract Background Enrolling cancer patients into clinical trials is an endearing process. Pharmaceutical companies fund nearly 40% of these cancer trials. A variety of considerations take part in a patient's decision to participate to a clinical trial, including their opinion regarding the pharmaceutical industry. Recently, benfluorex (Mediator®), a drug first marketed in 1976 for hyperlipidemia and diabetes by a French pharmaceutical company, has filled the French headlines repeatedly because of efficacy and safety issues. The impact of this scandal on French cancer patients’ attitude toward clinical trials is not known. The aims of this study were to determine i) cancer patients’ opinion toward the pharmaceutical industry, physicians, and research, and ii) their willingness to participate to clinical trials, in the context of the benfluorex scandal. Methods To investigate this issue, a self-administered anonymous survey was performed in 221 French cancer patients. The survey instrument collected information about age, gender, and whether the patient already participated to a clinical trial. A question with multiple answers queried whether the benfluorex situation casted suspicion on the pharmaceutical industry, physicians, clinical research funded by the pharmaceutical industry, or research as a whole. A yes or no question queried patients’ willingness to participate to clinical trials funded by the pharmaceutical industry. Logistic regression was used to examine the relationship between patients’ characteristics and the dependent variables. Results Median age was 64 years (range 19 to 86 years) and 57% of the patients were female. Thirty three percent of the patients had already participated to a clinical trial. Eighty five percent of the patients declared that clinical research was necessary, 11% that it was useful, less than 1% that it was not useful, and 4% of the patients did not know. The benfluorex scandal induced distrust toward the pharmaceutical companies in 75% of the patients, toward research funded by these companies in 43% of the patients, research as a whole in 20% of the patients, and toward physicians in 14% of the patients. These results were not influenced by age, gender, or previous participation to a clinical trial. Regarding their attitude toward clinical trials funded by the pharmaceutical industry, 60% of the patients declared that they were not willing to participate, 25% of them that they would participate, and 15% that they did not know. A negative answer was less likely when patients had previously participated to a clinical trial. Conclusions Although no connection exists between benfluorex and cancer, these results show that this scandal significantly impaired French cancer patients’ trust toward the pharmaceutical companies and research, and their willingness to participate to clinical trials funded by the pharmaceutical industry. These results highlight the need to better understand patients’ motivation to help implement strategies to maintain their participation to clinical trials. Citation Information: Cancer Res 2013;73(24 Suppl): Abstract nr P1-09-21.

The impact of scandal on sport consumption: a conceptual framework for future research

Scandal has become an increasingly prominent sports phenomenon. All major sports competitions around the globe face scandals on a continuing basis; however, there is little research about the nature of scandal and its impacts on consumer behaviour. Drawing on the extant sports consumption literature, we develop a conceptual model of scandal and its impacts on sports consumption activities (ticket sales, viewership, merchandise sales). We then extend this model through examples of a sport scandal to propose the major dimensions of the scandal construct. Our goal in this paper is to develop a conceptual framework that is useful for future research of the scandal-consumption relationship.

Consumers’ Reactions to a Celebrity Endorser Scandal

ABSTRACTThis research examined the impact of a widely publicized celebrity scandal on consumers’ attitudes toward the involved celebrities and the products they endorsed. Special attention is placed on the interplay between consumers’ perceptions of the celebrities’ responsibilities for the events that occurred, their affective reactions to both the events and the celebrities, and their consequent reactions to the products that the celebrities endorsed. The use of a real celebrity scandal permitted the effects of several variables to be identified that are normally not taken into account, including individuals’ a priori liking for the celebrities, perceptions of the scandal's impact on both the involved celebrities and the society, individuals’ own involvement in scandal‐related activities. These and other effects were evaluated using structural equation modeling. Two parallel analyses, one for each celebrity, fit the model well and provided insight into the processes that potentially mediate the effects of a celebrity scandal on product evaluations.

The Coingate effect: The impact of scandal on attitudes toward, state and federal political actors

What happens when a major, well publicized state-level scandal occurs? Do opinions of federal politicians improve because of relative comparisons to state politicians caught in the scandal? Do attitudes toward all politicians suffer? Little work has been done to investigate about how scandals related to one level of government affect attitudes about political actors at other levels. We investigate what happens when a major and well publicized state-level scandal occurs. Using individual-level public opinion data collected during the summer of 2006, we analyze the impact that a state-level scandal had on citizen approval of state and federal political actors, considering the mediating impact of exposure to media coverage of the scandal. Overall consumption of news coverage of state governors boosts approval of the governor relative to the president. At the same time, however, citizens exposed to negative scandalous news coverage of their governor show a decline in relative gubernatorial approval.

Substitution and Stigma: Evidence on Religious Markets from the Catholic Sex Abuse Scandal

This paper considers substitution between charitable activities in the context of religious practice by examining the Catholic Church sex abuse scandal's impact on both Catholic and non-Catholic religiosity. I find a fall in the Catholic population compensated by increases in non-Catholic participation and nonaffiliation. Back-of-the-envelope calculations suggest the scandal generated about $3 billion dollars in donations to non-Catholic faiths. Those leaving Catholicism frequently chose dissimilar alternatives: Baptist churches gained significantly while the Episcopal Church did not. These results challenge several theories of religiosity and suggest that policies or shocks specific to one religious group could have effects on other groups. (JEL D64, Z12)

The Expenses Scandal and the Politics of Electoral Reform

The scandal over MPs' expenses that erupted in 2009 was followed by a surge in discussion of electoral reform. A range of reforms to Westminster's existing electoral system are now high on the political agenda. This article examines the extent and the nature of the scandal's impact on the electoral reform debate and draws out comparative implications for the sorts of conditions that can force politicians to accept electoral reforms that they do not want. It finds that the expenses scandal significantly changed debate about some electoral reform topics, but not about others. It proposes three factors likely to increase the impact of scandal in sparking reform: that the scandal is seen as harming ordinary people in their daily lives; that reforms can readily be understood as likely to mitigate the sources of scandal; and that those reforms do not seriously harm politicians' own perceived interests.

Saving the National Pastime's Image

This article examines a previously unstudied aspect of the 1919 Black Sox scandal: how Major League Baseball executives' desire to present the game as the national pastime, and the impact of the sporting press in helping to shape this image, influenced their crisis communications strategy, including appointing a commissioner and developing a press office. This study suggests the scandal's impact on baseball's image had more to do with the development of the baseball industry's first press office than did economic factors; that is, baseball officials implemented a press office for ideological rather than functional reasons. Although organizations often suggest they institute public relations to present the industry's voice in the marketplace of ideas, baseball industry leaders wanted to regain sports writer approval and acquiescence in order to maintain the game's status as the national pastime.

The impact of scandal on candidate evaluations: An experimental test of the role of candidate traits

Correlational studies have found candidate traits to be an important determinant of vote preferences but cannot rule out reverse causality processes in explaining these findings. The present study demonstrates the independent impact of trait inferences on candidate evaluations using experimentally controlled candidate profiles of hypothetical U.S. congressmen. Using the scandal situation as a testing ground, this experiment examines whether task-relevant, competence traits actually have greater impact on political judgments than the more general, warmth-related trait qualities. Two types of scandals are considered (marital infidelity and tax evasion), both implying negative trustworthiness characteristics of the officeholder. Results demonstrate that trait inferences do have a causal impact on global evaluations. Consistent with past survey studies, competence qualities appear to be more important than warmth qualities but only for those with greater political information levels.

Checks and Choices: The House Bank Scandal's Impact on Voters in 1992

Analysis of the 1992 American National Election Study (ANES) data indicates that the House bank scandal reduced the vote for House incumbents by approximately five percentage points. The scandal mainly affected the small subset of voters who were most offended by bank overdrafts and who did not assume that their representative had a clean record. Fortunately for members who had written bad checks, voters who knew about the transgression were least disposed to be outraged by it, while the voters most disposed to outrage were also most inclined to believe the guilty were innocent. The explanation for these curious patterns is that voters who faced the option of condemning an incumbent they otherwise appreciated or dismissing the offense as inconsequential often chose the latter course. The damage was also moderated by partisanship; voters of the incumbent's party showed a strong tendency to err in the incumbent's favor in assessing involvement in the scandal. The classical theory of cognitive dissonance rea...