The Corrective Actions Organizations Pursue Following Misconduct: A Review and Research Agenda

Organizational misconduct has substantial effects on the well-being of a firm and its stakeholders. As this body of work has grown, organizational scholars have devoted considerable research attention toward understanding how firms can minimize the negative effects of misconduct through various corrective actions. Consequently, discrete research streams have formed around specific types of organizational misconduct and corrective actions, which has left the literature without a unifying theoretical model. We provide a conceptual synthesis and typology that aggregates disconnected concepts into the higher order constructs of organizational misconduct (fraud, product safety issues, employee mistreatment, and environmental violations) and corrective actions (executive dismissal, product recalls, organizational accounts, and policy changes). Using the theoretical tenets of stakeholder salience and managerial cognition, we offer insight and future research directions about managers’ decision-making processes following misconduct and why firms respond using accommodative versus defensive strategies.