Who Controls the Controller? People Reaction to Social Control Agent's Decisions about Organizational Misconduct

Social control agents (SCAs) discipline organizations and draw the line between appropriate organizational behaviour and misconduct. While prior research focuses on the SCA‐organization relationship, we theorize how a key audience (people) interacts with an SCA depending on its decisions to sanction or not organizational misconduct. Building on sociological and organizational research on social norms and their enforcement, we expect that people are more likely to agree with an SCA that sanctions a behaviour that violates rule‐based as opposed to value‐based norms. Violations of rule‐based norms generate more agreement because such norms are less ambiguous and ascertaining when they are violated is easier to establish. As people agree more with SCA decisions to sanction rule‐based violations, we expect that the propensity of people to resort to the SCA increases. We find support for our hypotheses with a survey, a series of experiments, and the analysis of complete data on complaints by UK citizens to the Advertising Standards Authority – the UK SCA on advertising – over the period 2007–10. Our paper contributes to research in organizational misconduct by showing how SCAs are both an evaluating entity and an evaluated one and by shedding light on how people co‐determine what an acceptable or unacceptable behaviour is. Our paper uniquely links macro‐ and micro‐level studies on corporate misconduct, putting centre stage that SCA's authority essentially depends on a key audience's agreement with the SCAs' underlying norms that underpin their decisions.