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Organizations Behaving Badly: When Are Discreditable Actions Likely to Damage Organizational Reputation?

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Abstract

Everyday there are revelations of organizations behaving in discreditable ways. Sometimes these actions result in damage to an organization’s reputation, but often they do not. In this article, we examine the question of why external stakeholders may overlook disclosed discreditable actions, even those entailing ethical breaches. Drawing on stigmatization theory, we develop a model to explain the likelihood of reputational loss following revelations of discreditable actions. The model integrates four properties of actions (perceived control, perceived certainty, perceived threat, and perceived deviance), stakeholder motivation, and media coverage. Implications for theory and for practitioners concerned with reputation management are discussed.

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Authors and Affiliations

  1. Rotman School of Management, University of Toronto, 105 St. George St., Toronto, ON, M5S 3E6, Canada

    A. Rebecca Reuber

  2. Schulich School of Business, York University, 4700 Keele St., Toronto, ON, M3J 1P3, Canada

    Eileen Fischer

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  1. A. Rebecca Reuber
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  2. Eileen Fischer
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Correspondence to A. Rebecca Reuber.

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Reuber, A.R., Fischer, E. Organizations Behaving Badly: When Are Discreditable Actions Likely to Damage Organizational Reputation?. J Bus Ethics 93, 39–50 (2010). https://doi.org/10.1007/s10551-009-0180-3

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  • DOI: https://doi.org/10.1007/s10551-009-0180-3

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