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Managerial Aspirations and Suspect Leaders: The Effect of Relative Performance and Leader Succession on Organizational Misconduct

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Abstract

Explanations of organizational misconduct frequently point to declining firm performance and/or the actions of unethical or suspect leaders. Evidence that high-performing firms act illegally or unethically is an enigma. The purpose of this paper is to address these issues by exploring organizational performance using aspirational rather than absolute measures (i.e., social and self-referenced performance vs ROE or ROI) and examining the effect that suspect leader succession has on the increased probability of organizational misconduct. Our analysis of 128 collegiate football programs competing between 1953 and 2016 reveals an increased likelihood of misconduct among organizations with strong as well as weak performance, most notably in comparison to competitive peer programs. Social- and self-referenced aspirations produced distinct relationships between relative performance and misconduct. The impact of leader succession was conditional. The data revealed an increased likelihood of infraction episodes with the appointment of suspect leaders. In some instances, however, a reduced likelihood of misconduct accompanied succession events involving untainted leaders.

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Authors and Affiliations

  1. Department of Management, College of Business, University of North Texas, Business Leadership Building BLB379B, Denton, TX, 76203-5017, USA

    Mark Davis

  2. Department of Management & Marketing, Stephen F. Austin State University, Rusche McGee Business Building, Room 403, Nacogdoches, TX, 75962, USA

    Marcus Cox

  3. Department of Management, McCoy College of Business, Texas State University, McCoy Hall 560, San Marcos, TX, 78666, USA

    Melissa Baucus

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Correspondence to Melissa Baucus.

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Davis, M., Cox, M. & Baucus, M. Managerial Aspirations and Suspect Leaders: The Effect of Relative Performance and Leader Succession on Organizational Misconduct. J Bus Ethics 171, 123–138 (2021). https://doi.org/10.1007/s10551-019-04245-1

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