Mahendra Joshi

An Organizational Identity Approach to Strategic Groups

We argue that a firm forms three distinct relationships with strategic groups-identification, disidentification, and ambivalent identification. Firms can form any of these relationships with multiple strategic groups, and the set of these relationships comprises a firms strategic group configuration SGC. We propose that the nature of a firms identity influences the characteristics of its SGC. We demonstrate the implications of our model by exploring how a firms strategic group configuration affects its information-seeking behaviors. Finally, we describe how the SGC framework offers several key implications for this field of research.

Responses to the Discovery of Unethical Acts An Organizational Identity and Reputation Perspective

There has recently been a growth in research that examines how corporations respond to allegations of unethical actions. Although scholars have gained much insight about the range of responses available to and used by organizations, there has been almost no study of why firms choose one response over another. In this article, the authors present a framework of likely organizational response choices to allegations of wrongdoing; we propose that response choices are based on the degree of reputational risk from stakeholder withdrawal of support and on perceived threats to the firm’s primary or secondary identity.

Short- and Long-Term Share Price Reaction to Announcements of Financial Restatements

Purpose – This study examines both the short- and long-term share price reaction to announcements of financial restatements cited in the U.S. General Accounting Office (2006) database. n nMethodology – It uses the augmented four-factor Fama-French model for assessing share price reaction. n nFindings – The study finds that the average cumulative abnormal return (CAR) for a sample of 553 restatements (by 437 companies) is significantly negative (−1.58) for the three-day window surrounding the day of announcement. The average CAR for the one-year period prior to the announcement (−9.6%) and for each of the four years after the announcement is negative as well, with the average CAR for the four years adding up to −22%. The study also documents differences in CARs based on the entity prompting the restatement (company, auditor, and Securities and Exchange Commission), the reason behind the restatement (revenue, cost, reclassification of item, etc.), and for one-time versus repeat offenders. n nSocial implications – Taken together, the findings indicate that financial restatements impose significant short-term as well as long-term costs on shareholders. n nOriginality/Value – The evidence about long-term share price reaction to financial restatements is missing in prior research. The relationship between long-term and short-term share price reaction to financial restatements fails to suggest systematic over/underreaction by the market.