Melissa S. Baucus

Can Illegal Corporate Behavior be Predicted? An Event History Analysis

A model of illegal corporate behavior was developed and tested for a 19-year period using event history analysis and data on clearly illegal acts. Results indicated that large firms operating in dy...

Internal vs. External Whistleblowers: A Comparison of Whistleblowering Processes

We conduct quantitative and qualitative analysis of 33 cases of internal and external whistleblowers wrongfully fired for reporting wrongdoing. Our results show external whistleblowers have less tenure with the organization, greater evidence of wrongdoing, and they tend to be more effective in changing organizational practices. External whistleblowers also experience more extensive retaliation than internal whistleblowers, and patterns of retaliation by management against the whistleblower vary depending on whether the whistleblower reports internally or externally. We discuss implications for organizations and whistleblowers, and we conclude that researchers need to develop different theoretical explanations of internal and external whistleblowing processes.

Pressure, Opportunity and Predisposition: A Multivariate Model of Corporate Illegality

Corporate illegality researchers often maintain that wrongdoing occurs when factors pressure a firm to behave illegally, leading managers to make a rational decision to commit wrongdoing. Yet, corporate illegality results also from conditions of opportunity and predisposition, and it may be an unintended outcome of corporate actions. A multivariate model of corporate illegality is proposed, in which situational factors-conditions of pressure, opportunity, or predisposition-lead to unintentional and intentional illegality. The model distinguishes between intentional and unintentional illegal activities, and it recognizes that intentional illegality results from a decision to engage in wrongdoing, so characteristics of the individual decision maker affect the likelihood of wrongdoing. Implications of this model for researchers and managers are discussed.

Paying The Piper: An Empirical Examination Of Longer-Term Financial Consequences Of Illegal Corporate Behavior

Longer-term performance effects of corporate illegality were investigated. Results show that firms experience lower accounting returns over five years and slower sales growth in the third through f...

Commitment in Franchising: The Role of Collaborative Communication and a Franchisee's Propensity to Leave

Social exchange theory provides the basis for developing a model where collaborative communication from the franchisor relates positively to commitment, and commitment relates negatively to franchisees’ propensity to leave the relationship. We analyze data from a unique dataset of 200 franchisees and find partial support for this model; franchisor communication positively relates to one dimension of franchisee commitment, and one dimension of commitment negatively relates to propensity to leave. The study expands franchising theory by examining the franchising relationship from a social exchange perspective and by empirically demonstrating the important role commitment plays in the franchising context.

Horse vs. Jockey? How stage of funding process and industry experience affect the evaluations of angel investors

Angel investors make evaluations at different stages of the funding process; so we explore how the importance angels place on different investment criteria varies and how industry experience impacts their evaluations. Data were collected at the screening stage as angel investors evaluated the strength of the entrepreneur and the opportunity, and made decisions regarding whether the deal should proceed to due diligence, as well as their personal interest in making an investment. Additional data were collected regarding whether these angels made an investment at the funding stage. We tested our hypotheses using a multilevel approach to account for the nested nature of the data – multiple evaluations nested within each angel, nested within each screening presentation. Our results show that the entrepreneur matters most when angels are deciding whether a deal should proceed to due diligence; opportunity strength represents a more important investment criterion when angels switch to determining whether a deal matches their own investment goals as the deal progresses through the funding process. Additionally, we find that three types of industry experience differ in their impact on the evaluation process. The findings offer new insights and underscore the importance of considering how individual characteristics impact evaluations of funding potential.

Wrongful firing in violation of public policy: Who gets fired and why

We extend the whistle-blowing literature to the context of wrongful firings that violate a public policy. Our results suggest that the incidence of wrongful firings varies, depending on the employee’s gender and tenure, and the industry in which the organization operates. Wrongful firings do not occur more frequently in certain occupations, since firms wrongfully discharge professional and managerial employees as often as employees in technical, clerical, and laborer occupations. We also show that gender, tenure, occupation, and industry, in combination, can distinguish between three types of wrongful firings in violation of public policy. Our results support the application of theory and empirical research on whistle-blowing to the wrongful firing context, aiding researchers interested in developing explanations of wrongful firings in violation of public policy. For managers, our study points to the need to develop more effective responses to employees exercising legal rights, refusing to participate in illegal or unethical activities, and performing a public duty or obligation, such as whistle-blowing.

Wrongful Firing in Violation of Public Policy: An Empirically Based Model of the Process

Wrongful firings in violation of public Policy have received inadequate attention from managers and researchers. Such firings involve ethical issues, including employees for refusing to engage in wrongdoing, reporting organizational wrongdoing, or exercising a legal right or duty. We develop a model of the wrongful firing in violation of public policy process, based on our qualitative analysis of 63 legal cases. The model specifies that these firings arise when managers confuse an organizational problem with the employee who raises the issue. Management either fires the employee immediately or labels the employee a “deviant,” often harassing or pressuring the employee to conform and then firing the employee when he or she does not comply. We outline ways researchers can test and extend our model, and we offer specific recommendations for managers interested in preventing firings in violation of public policy

Lessons from the neural foundation of entrepreneurial cognition: the case of emotion and motivation

Our objective in this chapter is to illustrate how entrepreneurs’ brains are physiologically the same as any other person’s brain, but in terms of experiences and knowledge they are different. Using neurophysiology and relevant concepts from neuroscience, we peer inside portions of the individual’s brain to map the physiological processes involved in transmitting visual data from the periphery (environment) to conscious thought and behavior, with affective processes (emotion and motivation) modulating data flows along the way. We explain how cortical fields and subcortical nuclei (key parts of the brain) process and code neural representations, first as simple data points, but then as behaviorally relevant percepts (perceptions) and concepts (conceptualizations) that carry affective value acquired through structures specialized for emotion and motivation. We also explain how these abstract building blocks of thought—percepts, concepts and affective valuations—decouple from external stimuli owing to repeated activation (experience) and come together with real-time data in the default mode network, with emotion and/or motivation enabling the entrepreneur to adapt behavior to a given context. An understanding of this ‘standard complement’ of physiological processes may allow researchers to explain similarities and differences among entrepreneurs and the opportunities they conceive. We offer 15 researchable premises that can be examined with current social-science methodologies and illustrate the implications of our approach (i.e., detailing how the brain generates behavior) for entrepreneurial cognition theory and research.

An overview of empirical research on ethics in entrepreneurial firms within the United States

Scholars recognise that entrepreneurs may encounter different ethical issues and pressures than managers in larger corporations. This has fostered empirical research aimed at assessing ethics in entrepreneurial settings in the United States. Our emphasis on empirical research with little attention paid to purely conceptual papers allows us to highlight the narrow definition of entrepreneurship used in the US and how US researchers distinguish between entrepreneurship and other types of small businesses. This differs greatly from many other countries, especially those in which researchers equate entrepreneurship with the study of small and medium sized enterprises (SMEs). Researchers in the US often distinguish ethics from corporate social responsibility (CSR), corporate social performance (CSP), stakeholder theory and stakeholder management with different theoretical models proposed in each of these areas. After discussing these various definitional issues, we review the empirical research on ethics in entrepreneurial firms, discussing what the results tell us, identifying gaps in prior research and concluding with recommendations for future research that draws more heavily on theoretical frameworks in the field of ethics.