Based on the findings of the systematic literature review (SLR), I perform three stock-based event studies of the Volkswagen diesel emissions scandal (Dieselgate), workplace sexual harassment (#MeToo accusations), and the 2003 blackout in the US to cove the three ESG dimensions, respectively. To these ends, I first review the research stream of stock price reactions to environmental pollution events in terms of the underlying research samples, methodological specifications, and theoretical underpinnings. Furthermore, it aims to conceptualize how individual cognitive biases may lead to misconduct, therefore, potentially representing an antecedent and how existing management control systems can be enhanced to effectively address specific forms of misconduct, respectively. Specifically, it is concerned with the question of how different forms of misconduct are reflected in the stock performance of related organizations, thereby, covering the three pillars of corporate sustainability environmental, social, and governance (ESG). This doctoral thesis deals with the topic of organizational misconduct and covers the three salient research streams in this area by addressing its performance outcomes, antecedents, and preventive measures. Our work contributes to the emerging literature on the social construction of organizational misconduct and illuminates the interaction between government and media in the evaluation of behavior as organizational misconduct. Carrying out a content analysis of newspaper reporting (2007-2011), we show that the negative perception of investment banks and their misconduct is attenuated when they receive government support. How is the media’s perception of misbehaving organizations affected by such government reactions? We explore this question by looking at the case of the 2008 government bailout of investment banks in the US, after those were caught red-handed for their involvement in the sub-prime financial crisis. However, the government, tied by conflicting demands, sometimes turns a blind eye to misconduct and supports misbehaving organizations for the greater societal good, instead of punishing them. The government is a social control agent with supreme formal authority to punish misconduct, and thus its actions are of particular interest to the media in their evaluation of misbehaving organizations. While past work has focused on the influence of the media on the government, we theorize the influence of the government on the media. We study the interaction between the government and the media, two key social control agents, in the evaluation organizational misconduct. When organizations engage in misconduct, social control agents play a crucial role in sanctioning them to show the enforcement of societal norms and reduce the risk of future deviance. These findings suggest that the state of the economy can influence current ethical behavior and leave a lasting imprint on the moral proclivities of new workforce entrants. Moreover, CEOs who began their careers in prosperous times were more likely to backdate stock option grants later in their careers. ![]() We found that in good economic times, CEOs were more likely to backdate their stock options grants. ![]() We tested these hypotheses by assembling a large data set of American CEOs and following their stock option reporting patterns between 19. Next, we propose that CEOs who begin their careers in prosperous times will be more likely to engage in self-serving corporate misconduct later in their careers. Drawing on research suggesting that prosperous times are associated with excessive risk-taking, overconfidence, and more opportunities to cheat, we first propose that CEOs will be more likely to engage in corporate misconduct during good economic times. ![]() We examine whether prosperous economic times have both immediate and lasting implications for corporate misconduct among chief executive officers (CEOs).
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