Faculty Research from the
Leavey School of Business


Who bears the brunt? A review and research agenda for the consequences of organizational wrongdoing for individuals.

The subject of corporate misconduct has become a topic of particular interest for scholars in accounting, finance, and organizational studies. Corporate misconduct is broadly defined as “the organizational pur- suit of any action considered illegitimate from an ethical, regulatory, or legal standpoint” (Harris and Bromiley 2007: 351). Scholars have investigated the antecedents of misconduct (e.g., Pierce and Larkin, this volume; Palmer and Moore, this volume; Ashforth and Lange, this volume), and to a lesser degree, its immediate consequences for guilty organizations and other firms to which they are linked (e.g., Greve, chapter 13). Significant gaps in this literature are still ripe for explora- tion, particularly as concerns the longer-lasting effects that organiza- tional wrongdoing can have on individuals employed by those organizations, to whom consequences might adhere, and the conse- quences of illegitimate behavior for employees below the level of the top management team. That is, although scholars have demonstrated that revelations of financial misconduct lead to immediate conse- quences for organizational elites, we have scant theory explaining the mechanisms through which the taint of fraud is transferred from orga- nizations to individuals – especially the non-elite – or what the lasting impact for any of those individuals might be."

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MGMT, LSB Research, 2018, Pozner, Featured