Corporate Disorder and Wrongdoing

Wrongdoing in organizations is extensive and pervasive. It is also very costly. Corporate disorder creates conditions in the organization that can lead to wrongdoing. We explore two significant types of disorder, inherent and acquired, and their impact on subsequent wrongdoing. We also examine the interactive effect of these two forms of corporate disorder. We focus on wrongdoing as an occurrence of inherent disorder and M&A activity as an occurrence of acquired disorder. Thus far research has not determined whether wrongdoing tends to recur within a company over time, that is, that some firms can have a persistent propensity for wrongdoing. Prior research has also been silent regarding how other corporate activities that create disorder such as M&A might be associated with wrongdoing. This paper examines the impact of disorder, including wrongdoing, M&A, and their interactive impact, on subsequent or future wrongdoing.