An Inquiry Into The Antecedent,Characteristics And Consequences Of Corporate Misconduct

Since the reform and opening up,China’s real economy has made remarkable achievements.The latest data showed that in 2016 China’s GDP reached 74.4 trillion yuan,and had an increase of 6.7%,ranking top of the world,which contributed more than 30%of the global economic growth.While behind what the macro-economy has achieved,corporate misconducts such as arbitrary pollutant emissions,food safety crisis,and financial fraud are constantly being staged.Therefore,research on the"dark side" of the organization has gradually attracted the attention of academic circles.As the saying goes:To err is human,which shows that the public has a tolerant attitude towards individual’s mistakes.However,as a kind of rational and standardized organizational form,the survival and development of corporates are strongly dependent on the legitimacy of the operation.Corporate misconducts can lead to corporate’s breakthrough of ritualized barriers,which then fall into the stigmatized abyss.Different from the individuals,the public has been skeptical of organization misconducts,most of whom do not recognize and exclude the misconducts.In this case why do the corporates still defy the law and deviate?The topic of this paper is rare in business studies,and there are not many related researches in the Chinese journals.Therefore in the course of the study,this paper integrates basic theories of psychology,sociology and management,and draws lessons from the researches of other fields,which reflects the features of business studies at the same time and emphasizes the basic principles of both normative research and empirical research.As to the target,this paper focuses on the importance of corporate misconduct study,the antecedents and process characteristics of organization misconduct,stakeholder reaction and organization response and so on.Specifically,this paper has done the following work:Firstly,clarifying the importance of the research on organization misconduct.Based on the literature and related research on enterprise’s good reputation and infamy,this paper establishes a dynamic mechanism of enterprise reputation and misconduct.In particular,it examines how reputation affects a corporate’s behaviors,and how these behaviors are evaluated by the investors.The focus of this paper is not on how corporates get a good reputation;on the contrary,the focus is how famous corporates loose good reputation and become notorious because of misconducts.Finally,this paper also discusses the strategy that enterprises can take to regain fame.Secondly,discussion of the reasons for corporate misconducts,which mainly investigates why corporates with good performance also have misconducts.Different from the previous literature,this paper bases on the expectancy theory,using the data of illegal behaviors of Listed Companies in China,empirically tests the impact of internal performance expectation and external investors’ expectation of stock’s high return on corporate irregularities.Empirical study indicate that:when the corporate performance is better than expected,or when the stock return is higher than expected,the probability of irregularities will increase;when the corporate performance is worse than expected,the publicity of the corporate can significantly reduce the probability of violation.Thirdly,analyzing the characteristics of the corporate misconduct process.The characteristics of corporate misconduct are diversified.In order to highlight the focus of the study,this paper selects the repeatability of corporate misconduct as the focus of the interpretation.The paper considers that corporate misconduct is also a kind of stigma,which will lead to the licensing effect of the public for corporate misconduct.In the empirical study,this paper chooses financial restatements of China’s listed companies as a sample to test the hypothesis.The results indicate that companies that misconduct for the first time then admit got lighter punishment relative to companies that made multiple misconducts;before admitting a misconduct,companies that hire a new CEO exteriorly are punished less than those which keep the current CEO or appoint CEO internally;hiring CEO exteriorly can reduce the punishment more effectively of companies that misconduct repeatedly compared to those which misconduct for the first time.Finally,discussing the response of stakeholders and the corporation after the misconduct.If the misconduct is inevitable,the corporation must be prepared to deal with it.The first is to deal with the relationship between shareholders and other stakeholders.According to our analysis,the stakeholders’ response for corporate misconduct has the characteristics of situational dependence,which provides a reference for corporations to develop coping strategies.Secondly,the corporation should also fully show the determination of recognizing misconducts and acceptance of rectification.Only when efforts are made to the two aspects can the negative impact of corporate misconduct be weakened.In this part,we do a qualitative analysis,and also a quantitative analysis according to the relevant text information and questionnaire survey,hoping to provide countermeasures for corporation’s reference.This study has the following innovations:(1)The research on organization misconduct is a new topic in the field of organizational behavior research.Although there may be some problems in the design,the topic itself of this paper is still in the lead at home.Previous domestic researches pay more attention to the various phenomena of organization misconduct in the social areas,which lack depth.This paper uses a method of personification of to explore the misconduct problem of corporations,which touches on the deep characteristics and meaning of the concept.Therefore,this study is of creativity in theme selection.(2)By using the method of qualitative research and empirical analysis,this paper constructs the analytical framework of "the cause-process characteristics-consequences and reaction of corporation misconduct",analyzes the formation mechanism and influence mechanism of corporation misconduct in China,provides a prevention and analysis framework for some new ventures to avoid detours,and also provide suggestions of coping strategies for corporates which fall deeply in stigma.(3)There are also some innovations in specific analysis and the selection of methods.In the discussion of the importance of organization misconduct problem,this paper puts corporate misconduct into the dynamic system of organizational reputation,which enriches the theoretical framework of organization misconduct research.Moreover,it introduces the expectation theory in the elaboration that good corporations may also misconduct,which expanded the theory field of organization misconduct.Then,in the organization repeated misconduct,this paper puts forward the audience’s licensing effect,which provides a new interpretation of the reasons for the organization misconduct.Finally,in the company’s response research,this paper adopts the method of text analysis and qualitative research,although it is only a simple attempt,it points out the direction for further research.