Organizational Wrongdoing Research Articles

Organizational Wrongdoing within the Context of the UN Sustainable Development Goals: An Integrative Review

AbstractAddressing organizational wrongdoing (OW) is crucial for sustainable development. However, there seems to be a lack of structured analysis of this concept within the realm of the UN Sustainable Development Goals (UN SDGs). This study aims to map the economic, business, and management literature on OW in relation to the SDGs using metadata extracted from 374 journal articles indexed in the Web of Science database for the period 2000–2023. This study highlights the need for a more systematic approach to understanding complex OW phenomena in the sustainable context. It proposes the foundation for a novel conceptual framework and suggests future research directions. Additionally, this study emphasizes the importance of interdisciplinary research for developing comprehensive strategies that align organizational practices with sustainable development objectives.

Organizational Wrongdoing and its Deterrence

Organizational Wrongdoing and its Deterrence

Organizational Wrongdoing Within the UN Sustainable Development Goals: A Bibliometric Analysis

Organizational Wrongdoing Within the UN Sustainable Development Goals: A Bibliometric Analysis

The Banality of Organizational Wrongdoing: A Reading on Arendt’s Thoughtlessness Thesis

The Banality of Organizational Wrongdoing: A Reading on Arendt’s Thoughtlessness Thesis

Unmasking greenwashing – the role of the news media in giving voice to whistleblowers in sustainable finance

Sustainable investing is on the rise within the financial sector. However, the honesty, reliability, and validity of the sustainable finance (SF) industry is currently facing increasing allegations and criticism, including from individuals within the sector. This paper aims to investigate how the news media give voice to whistleblowers in SF. To do so, a mixed methods approach was applied. First, expert interviews were conducted between March and April 2022 with individuals responsible for SF/ESG (‘environmental, social and governance’) investments in Europe as well as DWS whistleblower, Desiree Fixler. In parallel, the news coverage of two prominent whistleblowers in the ESG industry was examined using a qualitative, manual content analysis of articles from nine major financial news sites online. The findings of the interviews shed light on how the media provided whistleblowers a platform to expose organizational wrongdoings in the realm of SF. In addition, the content analysis showed that the financial news media provided a forum for information, criticism, and discussion about SF. The results provide innovative insights about whistleblower activities related to SF and greenwashing within the financial industry, and their portrayal in financial news media.

Do Companies Think and Feel? Mind Perception of Organizations.

How do people perceive the minds of organizations? Existing work on organizational mind perception highlights two key debates: whether organizational groups are ascribed more agency than experience, and whether people are really perceiving minds in organizational groups at all. Our current paper and its data weigh in on these debates and suggest that organizations can indeed be ascribed experiential minds. We present a "member and goals" framework for systematically understanding the mind perception of organization. This framework suggests that people can perceive the organizational mind through its elemental building blocks: members (people who form the organization) and goals (its aims). Four studies reveal that people ascribe agency and experience to organizations based on whether the members of organizations and the goals of the organization are characterized by agency or experience. Study 1 finds that past work on mind perception often examines for-profit corporations, which consist of agentic members (corporate professionals) and agentic goals (market competition). Studies 2 and 3 reveal that when an organization with members and goals high (vs. low) in experience, people imbue its mind with perceived experience-equal to that of a person-and that even emotions low in warmth (i.e., anger) can imbue an organization with such perceptions. Study 4 shows the moral consequences of emphasizing experience: after organizational wrongdoing, experiential organizations are seen to deliver more sincere apologies and are more forgiven.

Information misbehavior: How organizations use information to deceive

AbstractRecent examples of organizational wrongdoing such as those that led to the opioid crisis and the 2008 financial meltdown show that organizations can deliberately use information to deceive others, resulting in serious harm. This brief communication explores the role of information in organizational wrongdoing. We analyze a dataset consisting of 80 cases of high‐penalty corporate wrongdoing in the United States in the period 2000–2020. Our analysis of documents filed by the US Department of Justice and federal regulatory agencies in those cases found that organizations use two general information strategies to deceive and mislead. First, organizations can “sow doubt” on statements by others that hurt the organization's interests. Second, organizations can “exploit trust” that others have placed in them to provide truthful information. Our analysis suggests that which strategy is adopted depends on the degree that the organization's external information use environment is “contested” or “controlled.” Across the cases examined, we observe three types of information behaviors that implement the strategy of sowing doubt and exploiting trust: information obfuscation, information concealment, and information falsification.

Amoral Management and the Normalisation of Deviance: The Case of Stafford Hospital

Inquiries into organisational scandals repeatedly attribute wrongdoing to the normalisation of deviance. From this perspective, the cause of harm lies not in the actions of any individual but rather in the institutionalised practices of organisations or sectors. Although an important corrective to dramatic tales of bad apples, the normalisation thesis underplays the role of management in the emergence of deviance. Drawing on literatures exploring ideas of amoral (Carroll in Bus Horiz 30(2):7–15, 1987) or ethically neutral leadership (Treviño et al. in Calif Manag Rev 42(4):128–142, 2000) we seek to bring management back into the explanation of organisational wrongdoing. Amoral theorists point to management’s ethical silence, but they also describe the way in which that silence is sustained by a series of organisational characteristics. We build on this work in arguing that it is management’s deliberate focus on bottom line performance, the diffusion of responsibility and high levels of organisational identification that explain the emergence of wrongdoing. We apply these ideas to the case of the UK’s Stafford hospital which hit the headlines in 2009 when it was reported that poor standards of care had led to a mortality rate markedly above that expected for a hospital of its type. We conclude with a discussion of the circumstances which translate amoral management into unethical outcomes.

Harming by Deceit: Epistemic Malevolence and Organizational Wrongdoing

Research on organizational epistemic vice alleges that some organizations are epistemically malevolent, i.e. they habitually harm others by deceiving them. Yet, there is a lack of empirical research on epistemic malevolence. We connect the discussion of epistemic malevolence to the empirical literature on organizational deception. The existing empirical literature does not pay sufficient attention to the impact of an organization’s ability to control compromising information on its deception strategy. We address this gap by studying eighty high-penalty corporate misconduct cases between 2000 and 2020 in the United States. We find that organizations use two different strategies to deceive: Organizations ‘sow doubt’ when they contest information about them or their impacts that others have access to. By contrast, organizations ‘exploit trust’ when they deceive others by obfuscating, concealing, or falsifying information that they themselves control. While previous research has focused on cases of ‘sowing doubt’, we find that organizations ‘exploit trust’ in the majority of cases that we studied. This has important policy implications because the strategy of ‘exploiting trust’ calls for a different response from regulators and organizations than the strategy of ‘sowing doubt’.

The Crisis in Local Newspapers and Organizational Wrongdoing: The Role of Community Social Connectedness

Drawing on institutional anomie theory, we examine how the crisis in local newspapers has induced organizational wrongdoings in local communities. We argue that, because local newspapers are the primary source of accountability journalism in local communities, their decline leads to an anomic state that increases the scale of organizational wrongdoing. We also investigate whether institutional complementarity helps overcome the anomic state: Due to functional similarity, community social connectedness compensates for the scarcity of local newspapers. Our analysis of U.S. metropolitan areas for the period of 2007–2015 reveals that the positive relationship between local newspaper scarcity and the scale of organizational wrongdoing is not present in all communities but does appear when a community lacks community social connectedness. We also find that this moderating role of community social connectedness is observed only for internal organizational wrongdoings that are less visible to the public than external ones.

The organizational reasons for wrongdoing. The case of Italy’s Superior Council of the Judiciary (CSM)

Many scholars have highlighted the individual, organizational and inter-organizational causes of organizational wrongdoing; others have focused on its (negative) consequences or have analyzed how it can persist and spread between organizations. An underlining assumption shared by many of those studies is that organizational wrongdoing is a deviant, society-damaging phenomenon originating from individual and organizational actors’ pursuit of undue advantages. We argue that, at least in some cases, actors may also have “organizational reasons” for wrongdoing, besides self-interest. This article aims at analyzing the organizational reasons for wrongdoing in the CSM affair, a scandal that shed light on the deviant practices for career paths within the Italian judiciary system. By relying on documents and several semi-structured interviews to judges, public prosecutors, and experts in the field, we reconstructed actual practices for career advancement (extra-legal governance) and compared them with formal policies (legal governance). Our analysis shows that deviant practices were not merely occasional episodes of favoritism, but were part of an extra-legal governance system that involved virtually all of Italy’s judges. We also found that the CSM decoupled formal policies from actual practices to manage two organizational trade-offs – bureaucratic rules vs. efficiency, and independence vs. accountability. Therefore, besides individual gain, actors had two major “organizational reasons” for wrongdoing: first, they needed to cope with a lack of organizational capabilities and resources; second, they needed to address calls for greater accountability. In the light of our findings, we conclude with some considerations about organizational learning and the relation between law, organizations, and wrongdoing.

Testing the Impact of Masking Identity in News Accounts on Perceptions of Organizations and Risks

The blurring of faces and masking of voices are common news production techniques, typically to conceal the identity of individuals providing information. However, little is known about the impact of these masking techniques on audience perceptions, especially in the context of organizational wrongdoing and public risk. Drawing from Exemplification Theory, the current study examined the effect of blurring and voice masking on risk perceptions, opinions of a culpable organization, and desire for additional information about the risk. Risk perceptions were greater when masking cues were applied, as were behavioral intention to avoid the risk in focus. These cues did not impact the perceptions of how widespread similar risks are, nor did they effect respondents’ perceptions of the organization responsible. Theoretical and practical implications are discussed, along with the need for future research examining the use of and effects of identity masking on audience perceptions.

Employee Voice after Organizational Wrongdoing: Affective and Analytic Judgments in Social Media

The literature on employee voice suggests that employees may express their concerns and judgments after organizational wrongdoing and therewith possibly trigger change for the better. However, managers often suppress and discourage such negative and critical voice within the boundaries of organizations. Over recent years, then, social media have created a new sphere where employees may express voice without the control and influence by managers and with wider public reach, which may pose a threat to organizations and their social evaluations due to negative emotions expressed in such judgments and due to the new temporal dynamics in social media. With this article we study this new form of employee voice expressed in social media after organizational wrongdoing. We analyse how organizational wrongdoing impacts affective and analytic aspects of judgments in social media and the new temporal dynamics of such judgment expression.

Piracy as Organizational Wrongdoing: from Public-Private Partnerships to Public-Private Pirates

Public-Private Partnerships (P3s) have enjoyed growing support as legitimate and efficient arrangements for providing public goods and services. Nonetheless, mounting theoretical and empirical evidence challenges the positive aura surrounding such arrangements, as private entities have often demonstrated behaviors antithetical to partnerships designed to serve the public. Yet, to date, there is a dearth of empirical research that examines the forms of wrongdoing such organizational arrangements entail, leading to an under-theorization of how and why wrongdoing persists so close to the State. To address this, we take the case of the UK, and code official Parliamentary committee reports and inquiry documents concerned with P3 wrongdoing. We observe that, while the state outsources to P3s, it also allows regulatory voids that invites bad practices. We empirically identify five such practices that underpin P3 wrongdoings, most notably fraud. Observing persistent P3 wrongdoing led us to coin the term ‘Public-Private Pirates’ to explain unsuccessful partnerships that sustain wrongdoing and undermine public services. Our empirical study contributes to the wrongdoing literature by demonstrating processes, mechanisms and structures that enable normal wrongdoing in government outsourcing.

Religious Affiliation and Wrongdoing: Evidence from U.S. Nursing Homes

We explore the relationship between organizational religious affiliation and wrongdoing using a unique data set on inspections in 16,101 nursing homes over five years. We find that violations of standards of care are more severe in religiously affiliated homes. We track this difference to a reduction in the likelihood that organizational members file complaints rather than poorer behaving caretakers or differential treatment by enforcement agents. Fewer complaints increase the time that religiously affiliated homes operate without monitoring, which allows violations to escalate before they are detected. Our findings highlight an understudied process in the literature on organizational wrongdoing: Although much attention has been devoted to how inspector bias can lead to incorrect conclusions about the true rates of wrongdoing across organizations, religious affiliation can lead to similarly incorrect conclusions—but through an internal organizational process. This paper was accepted by Lamar Pierce, organizations. Supplemental Material: The data files and online appendices are available at https://doi.org/10.1287/mnsc.2022.4350 .

The vigilante identity and organizations

We test the theoretical and practical utility of the vigilante identity, a self-perception of being the kind of person who monitors their environment for signs of norm violations, and who punishes the perceived norm violator, without formal authority. We develop and validate a measure of the vigilante identity scale (VIS) and demonstrate the scale’s incremental predictive validity above and beyond seemingly related constructs (Studies 1 – 2e). We show that the VIS predicts hypervigilance towards organizational wrongdoing (Studies 2 and 4), punishment intentions and behavior in and of organizations (Studies 3 and 4) as well as in the wider community (Study 1), and is activated under organizational justice failure conditions (Study 3). We maintain that vigilantes can impact organizations and society from both inside and outside organizational walls and we discuss theoretical implications for scholarship on vigilantes, as well as on morality, social norms, and third-party punishment in organizations.

Leading a Healthier Company: Advancing a Public Health Model of Ethics and Compliance

This article advances a public health model of ethics and compliance. It argues that corporate leaders should draw from the successful lessons of public health to promote ethical behavior more effectively in their companies. With its attention to data‐driven risk mitigation and behaviorally cognizant processes, a public health model can move compliance from the faulty assumption on which it is based, that is, that organizational wrongdoing can be deterred solely through appeals to the rational decision‐making processes of employees, to a more accurate understanding of the situational and social influences that foster noncompliance. The article supports its thesis in three parts. It begins by explaining the evolution of compliance and its transition from overly legalistic to behaviorally aware. Next, it draws on behavioral ethics and network research to make the connection between public health and compliance. Third, it explores how corporate leaders can meld the insights from these two disciplines, offering a new way of approaching ethics and compliance that is focused on behavioral ethics conduct risk and the practical application of behavioral science within the firm—the best way to improve the legal, ethical, and financial health of companies.

The German Organ Transplant Scandal - Unwritten rules of organizational wrongdoings

Using data from organ transplant medicine in Germany, we propose a method for understanding the content of unwritten rules supportive of violations of written rules in light of the “German Organ Transplant Scandal”. Grounded in the sociology of organizational crime, we reconstruct the cultural repertoires of medical professionals working with organ allocation when confronted with the applicable guidelines using collective mindset analysis. Four dimensions of cognitive and normative rules of interpretation were identified and discussed as a an occupational-professional form of deviance. Apart from not relying on data from the alleged perpetrators and still gazing at the latent structures of meaning behind misconduct, our approach offers a more general methodological framework for empirical studies of the unwritten rules at work in an organizational field where wrongdoing has been reported.

Behind the Stigma Shield: Frontline Employees’ Emotional Response to Organizational Event Stigma at Work and at Home

AbstractWe investigate how frontline employees manage their emotional experiences of organizational event stigma as an implication of organizational wrongdoing. Our research is based on a longitudinal case study of Danske Bank, which was involved in a money laundering scandal of historical magnitude. We evoke Goffman’s epistemological understanding of stigma as arising in social interactions in all aspects of life. We analyse the emotionally straining spill‐over effects of stigmatization at home, as event stigma blurs individuals’ work–home boundaries. Our study shows how frontline employees develop a ‘stigma shield’, that is, emotional detachment strategies used at work and at home to protect against the negative implications of event stigmatization and maintain their organizational pride and loyalty. Interestingly, we find that the stigma shield enables identity protection rather than identity restructuring in response to the identity threat posed by the scandal. We contribute to the literature on organizational event stigma and identity threat by offering a theoretical lens focusing on individual‐level emotional responses to ‘felt’ stigmatization among frontline employees in an organization facing scandal.

Antecedents, Evaluations, and Processes of Organizational Wrongdoing in a Changing World

Organizational wrongdoing continues to be one of the biggest challenges posed by firms, considering its impact on our economy, society, organizations, and individuals. Despite a rich literature in existence, we believe that our field will benefit from a renewed scholarly attention to wrongdoing. Our symposium aims to advance the discussion on antecedents, evaluations, and processes (e.g., resolution) of organizational wrongdoing. Our symposium papers provide interesting insights regarding the following broad questions: (1) Which novel factors shape organizational wrongdoing? (2) How do insiders, social-control agents, and other key audiences evaluate wrongdoing? (3) How do their evaluations and reactions influence the process and consequence of wrongdoing? (4) What are the consequences of organizational wrongdoing in broader society and economies? Additionally, each paper employs a variety of methods, including case studies, quantitative analysis, and historical analysis. How Persistent Misconduct Induces Escalating Contestation in the Financial Industry Presenter: Timo Fiorito; U. of Twente Presenter: Richard Hoff; Vrije U. Presenter: Michel Ehrenhard; U. of Twente Organizational Culture and Wrongdoing: A view through the Glassdoor Presenter: Deepika Chhillar; U. of Illinois at Urbana-Champaign Presenter: Donald Sull; Massachusetts Institute of Technology Presenter: E. Geoffrey Love; U. of Illinois at Urbana-Champaign Presenter: Matthew Kraatz; U. of Illinois The evaluations of entrepreneurial leader’s questionable behaviors Presenter: Jinah Ryu; U. of Illinois at Urbana-Champaign Limits to Worker Mobilization against Corporate Social Irresponsibility Presenter: Elisa Giuliani; U. of Pisa Presenter: Andrew Spicer; U. of South Carolina