Corporate Scandal and the Theory of the Firm

Abstract

Corporate scandals generate public scrutiny of organizational communication practices, invoke discourses about systemic change, and problematize firms' legitimacy as communication agents. Accordingly, the authors situate corporate scandal as a crucial social problem that organizational communication scholars can usefully inform, and they propose the theory of the firm as an important analytic lens that confronts key organizational questions at the heart of contemporary scandals. They read forms of scandal through three existing theories of the firm (economic, resource based, and moral community), arguing that these models inadequately explain issues of meaning, process, and firm influence. In response, the authors turn to literature depicting communication as constitutive of organizing to sketch the contours of a distinctly communicative theory of the firm that can better account for scandal and thereby enhance the theoretical and practical contributions of organizational communication studies.

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