Seminario Max Braun

Max Braun (LMU Munich) will present his paper “CEO RATIONALIZATION OF CORPORATE MISCONDUCT: A META-ANALYTIC STRUCTURAL EQUATION MODEL,” joint with Karen Schnatterly (Virginia Tech). 

The invited speaker is interested in a tenure-track job in the department (Area: Management).

Abstract

What factors allow corporate leaders to justify their misconduct? We theorize on rationalization as the cognitive link between personal and organizational antecedents to corporate misconduct. With neutralization theory, we integrate the distinct explanations of upper echelons and corporate governance and study the joint influences of dispositional (upper echelons) and organizational (corporate governance) aspects on CEO rationalization. We employ a metaanalytic structural equation modeling approach, synthesize the results of 248 primary studies covering samples from 23 countries for a period between 1970 and 2021, and compare alternative theoretical paths to corporate misconduct. The results suggest that CEO rationalization is central to understanding corporate misconduct. CEO cognitive disposition to rationalize has both a stronger effect on misconduct than incentives or monitoring has but also affects the mitigation that incentives and monitoring have on corporate misconduct. Our study contributes to the microfoundations of corporate misconduct and reveals the dispositional and organizational facets of CEO rationalization. Our meta-analytic comparison of the pressure, opportunity, and rationalization antecedents to corporate misconduct supports cognition centric approaches to misconduct and governance research. Our study further reveals a substantial interplay among governance mechanisms, which suggests that governance bundles constitute antecedents to corporate misconduct.