Why Stakeholders Ignore Firm Misconduct

Michael L. Barnett

234 citations0/0 files storedJournal of Management

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Corporate Social Responsibility Reporting Ethics in Business and Education Corporate Identity and Reputation

Abstract

This article explains inconsistency in stakeholder punishment for firm misconduct. It does so by developing a cognitive view of the process by which stakeholders allocate their limited attention. This cognitive view outlines individual and situational factors that produce variation in a stakeholder’s likelihood of noticing that an act of misconduct has occurred, in how the stakeholder will assess misconduct if he or she does notice it, and in the stakeholder’s decision to punish a firm if he or she judges it to have engaged in misconduct. In sum, this process suggests that as stakeholder attention varies across each step of this process, misconduct often will not result in punishment. This suggests limits on the ability to deter firm misconduct through social control.

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References

1974Judgment under Uncertainty: Heuristics and Biases 1891The Principles of Psychology 2010Strategic management a stakeholder approach 1975Judgment under Uncertainty: Heuristics and Biases 1966Generalized expectancies for internal versus external control of reinforcement.1956The magical number seven, plus or minus two: Some limits on our capacity for processing information.1994The magical number seven, plus or minus two: Some limits on our capacity for processing information.1954Nature of Prejudice

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