Corporations and Illegal Behavior

RETRACTED: The influencing factors and governance strategies of corporate misconduct from the perspective of collusion

“…This means that the smaller the enterprise, the easier it is for the CEO to find the perfect range of inappropriate profits, and the greater the opportunity to steal the risk premium for corruption from corporate misconduct. As a result, corporate malpractices are more likely to occur in smaller firms, and our findings coincide with empirical studies by Clinard et al 18 In reality, larger companies have more favorable and legitimate opportunities than smaller ones, so CEOs who think in terms of maximizing the value of the business tend to pursue legitimate business plans. Because the larger the enterprise, the smaller the scope of the improper profit perfect range, the more difficult to find the improper profit range, so the larger the enterprise CEO is less inclined to risk engaging in improper behavior, the more inclined to implement the legitimate business plan.…”

“…There has been considerable literature suggesting that CEO misconduct is committed in cooperation with the board of directors. 18,28 Therefore, this study hypothesizes that the Board of Directors may acquiesce to the CEO's proposal of corporate misconduct for the sake of maximizing the company's value. This study assumes…”

Big Profits, Big Harm? Exploring the Link Between Firm Financial Performance and Human Rights Misbehavior

“…Most studies suggest that underperformance and resource constraints are the sources of misbehavior—a view that sociologists have used to explain criminality and deviant behaviors in poor social strata (Merton, 1938). Over the years, certain management research has found empirical support for this view by showing that poor performance triggers corporate dishonesty (Asch & Seneca, 1976; Clinard et al, 1979; Cochran & Nigh, 1987; Staw & Szwajkowski, 1975). Furthermore, research showed that low levels of financial performance compared with a specific benchmark lead to financial misrepresentation (Harris & Bromiley, 2007), bribery (Xu et al, 2019), and social irresponsibility (Zhong et al, 2022).…”

“…Alternative Model Specifications. Prior research on corporate misbehavior finds a negative relationship between firm performance and the likelihood of misbehavior (Asch & Seneca, 1976;Clinard et al, 1979;Cochran & Nigh, 1987;Staw & Szwajkowski, 1975;Xu et al, 2019). We checked for a possible nonlinear U-shaped relationship between firm performance (compared with that of global industry peers) and the likelihood of human rights abuses, by including the quadratic term of ROA (ROA2) in the regression.…”

“…It also provides further support for the still limited research documenting the relationship between a firm’s financial overperformance compared with that of industry peers and organizational misbehavior. This is important as most research identifies financial underperformance as one of the chief causes of misbehavior (Asch & Seneca, 1976; Clinard et al, 1979; Cochran & Nigh, 1987; Gao et al, 2021; Harris & Bromiley, 2007; Staw & Szwajkowski, 1975; Xu et al, 2019; Zhong et al, 2022). The latter suggests that helping underperforming firms increase their performance will reduce the risk of business-related harms.…”