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Antecedents of Corporate Scandals: CEOs’ Personal Traits, Stakeholders’ Cohesion, Managerial Fraud, and Imbalanced Corporate Strategy

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  • Fabio Zona
  • Mario Minoja
  • Vittorio Coda

Abstract

This study examines the antecedents of corporate scandals. Corporate scandals are defined as rare events occurring at the apex of corporate fame when managerial fraud suddenly emerges in conjunction with a significant gap between perceived corporate success and actual economic conditions. Previous studies on managerial fraud have examined the antecedents of illegal acts in isolation from strategic decisions and in terms of CEOs’ individual responses to the external context. This study frames the antecedents of corporate scandals in terms of the interplay of CEOs’ personal traits with corporate strategy and stakeholders’ cohesion. With this aim, this study builds on extant theory to examine the case of Banca Popolare di Lodi, an Italian bank involved in a corporate scandal in year 2005. The model contributes to advance understanding of the complex dynamics underlying the emergence of corporate scandals. Copyright Springer Science+Business Media B.V. 2013

Suggested Citation

  • Fabio Zona & Mario Minoja & Vittorio Coda, 2013. "Antecedents of Corporate Scandals: CEOs’ Personal Traits, Stakeholders’ Cohesion, Managerial Fraud, and Imbalanced Corporate Strategy," Journal of Business Ethics, Springer, vol. 113(2), pages 265-283, March.
    • Handle: RePEc:kap:jbuset:v:113:y:2013:i:2:p:265-283
    DOI: 10.1007/s10551-012-1294-6
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    3. Jinghui Sun & Pamela Kent & Baolei Qi & Jiwei Wang, 2019. "Chief financial officer demographic characteristics and fraudulent financial reporting in China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 59(4), pages 2705-2734, December.
    4. Monica Ramos Montesdeoca & Agustín J. Sánchez Medina & Felix Blázquez Santana, 2019. "Research Topics in Accounting Fraud in the 21st Century: A State of the Art," Sustainability, MDPI, vol. 11(6), pages 1-31, March.
    5. Sebastian C. Schuh & Michelle Xue Zheng & Katherine R. Xin & Juan Antonio Fernandez, 2019. "The Interpersonal Benefits of Leader Mindfulness: A Serial Mediation Model Linking Leader Mindfulness, Leader Procedural Justice Enactment, and Employee Exhaustion and Performance," Journal of Business Ethics, Springer, vol. 156(4), pages 1007-1025, June.
    6. Clive R. Boddy, 2017. "Psychopathic Leadership A Case Study of a Corporate Psychopath CEO," Journal of Business Ethics, Springer, vol. 145(1), pages 141-156, September.
    7. Rizwan Qaisar Danish & Shahid Hafeez & Hafiz Fawad Ali & Ahmad Muneeb Mehta & Muhammad Bilal Ahmad & Muhammad Ali, 2020. "Impact of Ethical Leadership on Organizational Commitment and Organizational Citizenship Behavior with Mediating role of Intrinsic Motivation," International Review of Management and Marketing, Econjournals, vol. 10(4), pages 25-30.
    8. Zaman, Rashid & Atawnah, Nader & Baghdadi, Ghasan A. & Liu, Jia, 2021. "Fiduciary duty or loyalty? Evidence from co-opted boards and corporate misconduct," Journal of Corporate Finance, Elsevier, vol. 70(C).
    9. Gazley, Aaron & Sinha, Ashish & Rod, Michel, 2016. "Toward a theory of marketing law transgressions," Journal of Business Research, Elsevier, vol. 69(2), pages 476-483.
    10. Nam Tran & Don O'Sullivan, 2020. "The relationship between corporate social responsibility, financial misstatements and SEC enforcement actions," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(S1), pages 1111-1147, April.
    11. James S. Ang & Zhiqian Jiang & Chaopeng Wu, 2016. "Good Apples, Bad Apples: Sorting Among Chinese Companies Traded in the U.S," Journal of Business Ethics, Springer, vol. 134(4), pages 611-629, April.
    12. Maurizio Zollo & Mario Minoja & Vittorio Coda, 2018. "Toward an integrated theory of strategy," Strategic Management Journal, Wiley Blackwell, vol. 39(6), pages 1753-1778, June.
    13. James R. Van Scotter & Karina De Déa Roglio, 2020. "CEO Bright and Dark Personality: Effects on Ethical Misconduct," Journal of Business Ethics, Springer, vol. 164(3), pages 451-475, July.
    14. Hope, Ole-Kristian & Wang, Jingjing, 2018. "Management deception, big-bath accounting, and information asymmetry: Evidence from linguistic analysis," Accounting, Organizations and Society, Elsevier, vol. 70(C), pages 33-51.
    15. Zona, Fabio, 2014. "Board leadership structure and diversity over CEO time in office: A test of the evolutionary perspective on Italian firms," European Management Journal, Elsevier, vol. 32(4), pages 672-681.
    16. Eric N. Johnson & Linda A. Kidwell & D. Jordan Lowe & Philip M. J. Reckers, 2019. "Who Follows the Unethical Leader? The Association Between Followers’ Personal Characteristics and Intentions to Comply in Committing Organizational Fraud," Journal of Business Ethics, Springer, vol. 154(1), pages 181-193, January.
    17. Rondi, Emanuela & Benedetti, Carlotta & Bettinelli, Cristina & De Massis, Alfredo, 2023. "Falling from grace: Family-based brands amidst scandals," Journal of Business Research, Elsevier, vol. 157(C).
    18. Ling L. Harris & Scott B. Jackson & Joel Owens & Nicholas Seybert, 2022. "Recruiting Dark Personalities for Earnings Management," Journal of Business Ethics, Springer, vol. 178(1), pages 193-218, June.
    19. Maria Steinmeier, 2016. "Fraud in Sustainability Departments? An Exploratory Study," Journal of Business Ethics, Springer, vol. 138(3), pages 477-492, October.
    20. Susanne Braun & Nilüfer Aydin & Dieter Frey & Claudia Peus, 2018. "Leader Narcissism Predicts Malicious Envy and Supervisor-Targeted Counterproductive Work Behavior: Evidence from Field and Experimental Research," Journal of Business Ethics, Springer, vol. 151(3), pages 725-741, September.

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