The Tension Between Worker Safety and Organization Survival

Abstract

This research addresses the fundamental question of whether providing a safe workplace improves or hinders organizational survival, because there are conflicting predictions on the relationship between worker safety and organizational performance. The results, based on a unique longitudinal database covering more than 100,000 organizations across 25 years in the U.S. state of Oregon, indicate that, in general, organizations that provide a safe workplace have significantly lower odds and length of survival. Additionally, the organizations that would, in general, have better survival odds benefit most from not providing a safe workplace. This suggests that relying on the market does not engender workplace safety. This paper was accepted by Charles Corbett, operations management.

Do financial penalties for environmental violations facilitate improvements in corporate environmental performance? An empirical investigation

“…In addition, they may have fewer resources with which to launch a defensive campaign focused on symbolic actions. Recent research using a sample of mostly small‐ and medium‐sized US firms found that these firms were less likely to survive if their health and safety record was strong (Pagell et al, 2020). In the context of environmental violations committed by smaller private firms, future researchers should investigate (1) how these firms react to receiving financial penalties for environmental violations and (2) how it affects their odds of survival.…”

The impact of servitization on the environmental and social performance in manufacturing firms

“…By gradually adding services to their business models, manufacturing firms can reduce their waste emissions and the consumption of natural resources. Furthermore, product-harm crises and workplace safety are major social concerns for manufacturing firms (Cleeren et al, 2017;Pagell et al, 2020). This study suggests that servitization motivates firms to value their employees and develop a customer-oriented organizational culture, which helps firms to be responsive to customer demands and build a good relationship with external stakeholders.…”

The impact of chief risk officer appointments on firm risk and operational efficiency

“…The costly regulation hypothesis posits that organizations make tradeoffs between being safe (i.e., risk‐free) and being efficient (Pagell et al, 2015). Previous studies have shown that firms with a lower level of workplace safety tend to be more productive and have a higher level of survival rate (Pagell et al, 2020). Nevertheless, we find that CRO appointments can reduce firm risk and improve operational efficiency simultaneously.…”

“…For example, creating CRO positions in the TMT might make frontline managers think that risk management is someone else's job and ignore risks in operations (Pernell et al, 2017). Also, initiatives that aim to reduce workplace risks might incur burdensome costs that decrease the odds of organizational survival (Pagell et al, 2020). On average, manufacturing firms spend 7% of their total operating costs on risk and compliance-related processes (Crain & Crain, 2014).…”