Research Companion to Corruption in Organizations

Research Companion to Corruption in Organizations

New Horizons in Management series

Edited by Ronald J. Burke and Cary L. Cooper

Corruption in organizations is creating an increasing number of victims and causing huge costs. This timely book brings together international researchers who address the causes and consequences of corruption in organizations and the action needed to reduce levels of corruption worldwide.

Chapter 10: Organizational Responses to Allegations of Corporate Corruption

Vikas Anand, Alan Ellstrand, Aparna Rajagopalan and Mahendra Joshi

Subjects: business and management, corporate governance, corporate social responsibility, organisational behaviour, economics and finance, corporate governance


Vikas Anand, Alan Ellstrand, Aparna Rajagopalan and Mahendra Joshi I think this antitrust fever is a craze, which we should meet in a very dignified way and parry every question with answers which while perfectly truthful are evasive of bottom facts. Excerpted from a letter written by a Standard Oil Director to John D. Rockefeller in 1888.1 Introduction Exposure of corporate corruption and wrongdoing is increasingly common in today’s world of intense media scrutiny. Organizations are often faced with allegations of impropriety that involve legal and/or ethical violations. Such allegations can range from being totally baseless to completely accurate. When faced with these accusations, organizations typically go into a crisis mode and they develop a strategy to counteract them (Dezenhall and Weber, 2007). The actual organizational response to these accusations is likely to be influenced by legal considerations, by the credibility of the allegations and the accusers and by organization routines and values. The opening excerpt also highlights the fact that organizations expended considerable effort in deciding their responses to allegations of impropriety well before the current cynical climate in the wake of numerous exposed corporate scandals. An organization’s response to such allegations is extremely important for a variety of reasons. First, the nature of the organizational response is likely to shape the attitudes of its key stakeholders (Pfeffer and Salancik, 1978; Pfarrer et al., 2008). Several instances exist where organizations accused of corruption lose support of groups such as key customers, local communities, and creditors because the response does...

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