Why "good" firms do bad things: The effects of high aspirations, high expectations, and prominence on the incidence of corporate illegality

Yuri Mishina; Bernadine Dykes; Emily Block; Timothy Pollock

doi:10.5465/amj.2010.52814578

Why "good" firms do bad things: The effects of high aspirations, high expectations, and prominence on the incidence of corporate illegality

Yuri Mishina, Bernadine Dykes, Emily Block, Timothy Pollock

Management and Organization

Research output: Contribution to journal › Article › peer-review

338 Scopus citations

Abstract

Recent high-profile corporate scandals involving prominent, high-performing firms cast doubt on assertions that the costs of getting caught decrease the likelihood such high performers will act illegally. We explain this paradox by using theories of loss aversion and hubris to examine a sample of S&P 500 manufacturers. Results demonstrate that both performance above internal aspirations and performance above external expectations increase the likelihood of illegal activities. The sample firms' prominence enhanced the effects of performance above expectations on the likelihood of illegal actions. Prominent and less prominent firms displayed different patterns of behavior when their performance failed to meet aspirations. Copyright of the Academy of Management, all rights reserved.

Original language	English (US)
Pages (from-to)	701-722
Number of pages	22
Journal	Academy of Management Journal
Volume	53
Issue number	4
DOIs	https://doi.org/10.5465/amj.2010.52814578
State	Published - Aug 1 2010

All Science Journal Classification (ASJC) codes

Business and International Management
Business, Management and Accounting(all)
Strategy and Management
Management of Technology and Innovation

Access to Document

10.5465/amj.2010.52814578

Cite this

@article{7b8361dd23714574b7922c3c3f3b4ebd,

title = "Why {"}good{"} firms do bad things: The effects of high aspirations, high expectations, and prominence on the incidence of corporate illegality",

abstract = "Recent high-profile corporate scandals involving prominent, high-performing firms cast doubt on assertions that the costs of getting caught decrease the likelihood such high performers will act illegally. We explain this paradox by using theories of loss aversion and hubris to examine a sample of S&P 500 manufacturers. Results demonstrate that both performance above internal aspirations and performance above external expectations increase the likelihood of illegal activities. The sample firms' prominence enhanced the effects of performance above expectations on the likelihood of illegal actions. Prominent and less prominent firms displayed different patterns of behavior when their performance failed to meet aspirations. Copyright of the Academy of Management, all rights reserved.",

author = "Yuri Mishina and Bernadine Dykes and Emily Block and Timothy Pollock",

year = "2010",

month = aug,

day = "1",

doi = "10.5465/amj.2010.52814578",

language = "English (US)",

volume = "53",

pages = "701--722",

journal = "Academy of Management Journal",

issn = "0001-4273",

publisher = "Academy of Management",

number = "4",

}

TY - JOUR

T1 - Why "good" firms do bad things

T2 - The effects of high aspirations, high expectations, and prominence on the incidence of corporate illegality

AU - Mishina, Yuri

AU - Dykes, Bernadine

AU - Block, Emily

AU - Pollock, Timothy

PY - 2010/8/1

Y1 - 2010/8/1

N2 - Recent high-profile corporate scandals involving prominent, high-performing firms cast doubt on assertions that the costs of getting caught decrease the likelihood such high performers will act illegally. We explain this paradox by using theories of loss aversion and hubris to examine a sample of S&P 500 manufacturers. Results demonstrate that both performance above internal aspirations and performance above external expectations increase the likelihood of illegal activities. The sample firms' prominence enhanced the effects of performance above expectations on the likelihood of illegal actions. Prominent and less prominent firms displayed different patterns of behavior when their performance failed to meet aspirations. Copyright of the Academy of Management, all rights reserved.

AB - Recent high-profile corporate scandals involving prominent, high-performing firms cast doubt on assertions that the costs of getting caught decrease the likelihood such high performers will act illegally. We explain this paradox by using theories of loss aversion and hubris to examine a sample of S&P 500 manufacturers. Results demonstrate that both performance above internal aspirations and performance above external expectations increase the likelihood of illegal activities. The sample firms' prominence enhanced the effects of performance above expectations on the likelihood of illegal actions. Prominent and less prominent firms displayed different patterns of behavior when their performance failed to meet aspirations. Copyright of the Academy of Management, all rights reserved.

UR - http://www.scopus.com/inward/record.url?scp=77955681683&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=77955681683&partnerID=8YFLogxK

U2 - 10.5465/amj.2010.52814578

DO - 10.5465/amj.2010.52814578

M3 - Article

AN - SCOPUS:77955681683

SN - 0001-4273

VL - 53

SP - 701

EP - 722

JO - Academy of Management Journal

JF - Academy of Management Journal

IS - 4

ER -

Why "good" firms do bad things: The effects of high aspirations, high expectations, and prominence on the incidence of corporate illegality

Abstract

All Science Journal Classification (ASJC) codes

Access to Document

Other files and links

Fingerprint

Cite this