Shame on who? The effects of corporate irresponsibility and social performance on organizational reputation

Giulio Nardella*, Stephen Brammer, Irina Surdu

*Corresponding author for this work

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

This study examines the relationship between corporate irresponsibility, corporate social performance and changes in organizational reputation. By combining attribution theory with expectancy violations theory, we provide the first systematic analysis of how organizational reputations are influenced by attributions of corporate irresponsibility in the context of social expectations. Drawing on a comprehensive and unique corporate irresponsibility dataset, this study reveals that firms previously believed to be most socially responsible are penalized by evaluators when corporate culpability is verified by a court of law. Conversely, firms perceived as least socially responsible were more likely to suffer reputation penalties when accused of irresponsibility, without their culpability established through litigation. Overall, the results of our study suggest that organizational reputations are mostly stable in light of irresponsibility, in that evaluators only penalize certain firms, in certain circumstances. Specifically, reputation penalties occur when highly responsible firms are perceived as hypocritical and least responsible firms were not found culpable by a court of law. Upon reflection on these findings, our study reveals that the mechanisms of social sanction previously assumed to regulate irresponsibility are weaker than currently understood. The theoretical and policy implications of this study are discussed, along with directions for future research on social evaluations.

Original languageEnglish
Pages (from-to)5-23
Number of pages19
JournalBritish Journal of Management
Volume31
Issue number1
Early online date20 May 2019
DOIs
Publication statusPublished - Jan 2020

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