#  Leroy Gonsalves – Organizational Behavior, Harvard University 

 



####  calendar\_today Date and Time 

 **September 12, 2019** 

 12:30PM - 02:00PM EDT 

####  pin\_drop Location 

 **HBS Chao 300**  



 

 



 

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 **Under Pressure: Evidence for the Strain Theory of Organizational Misconduct**

 Strain theory has long been invoked to explain the prevalence of misconduct in organizations, with underperformance creating pressure for managers to engage in illegal activities. Drawing on research on risk- taking, I theorize a ‘legal risk’ effect, where firms’ response to performance strain is contingent upon both internal legal capacity and external legal risk. I further predict that underperforming firms will be most likely to engage in proximate forms of misconduct (economic and labor misconduct) which are subject to short-term managerial discretion as compared to distal forms of misconduct (environment and product misconduct) that tend to arise from carelessness or complexity. I find support for these propositions using longitudinal data on all material legal claims filed against S&P1500 firms between 2000-2017. The study builds on the strain theory of organizational misconduct, providing a more nuanced understanding of when and how performance strain is most likely to manifest in particular kinds of illegal activities.



 

 



 

 

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