TOO HOT TO HANDLE AND TOO VALUABLE TO DROP: AN EXPANDED CONCEPTUALIZATION OF FIRMS' REACTIONS TO EXCHANGE PARTNER MISCONDUCT

• 成果类型: Article
• 署名作者: Nalick, Michael; Kuban, Scott; Hill, Aaron D.; Ridge, Jason W.
• 署名单位: University of Denver; Tulane University; State University System of Florida; University of Florida; University of Arkansas System; University of Arkansas Fayetteville
• 刊物名称: ACADEMY OF MANAGEMENT JOURNAL
• ISSN/ISSBN: 0001-4273
• DOI: 10.5465/amj.2018.0657
• 发表日期: 2020
• 页码: 1976-2003
• 关键词: Loss aversion; BEHAVIORAL AGENCY; prospect-theory; Campaign Contributions; INVESTOR PERCEPTIONS; stock ownership; reputation; ORGANIZATIONS; CONSEQUENCES; Embeddedness

摘要

Multiple theories addressing firms' reactions to exchange partner misconduct coalesce to depict a trade-off. On the one hand, maintaining commitments to transgressors poses negative spillover risks, so theories posit firms are more likely to avoid such risks by ending commitments as negative spillover rises. On the other hand, exchange relationships often create embedded value, so theorizing also posits firms are more likely to avoid risking loss by maintaining commitments as relationships are more embedded. We argue this maintain or end choice oversimplifies a complex situation in which there are mixed gambles (i.e., choices offering both positive and negative outcomes). We integrate theorizing on mixed gambles and negative spillover to develop a broader conceptualization of alternative strategies for firms to reconcile these risk trade-offs beyond a binary maintain or end reaction, theorizing firms may: (a) increase or decrease commitments to transgressors, (b) hedge against risks by adding new partners while maintaining existing ones, or (c) boomerang by restarting exchange after previously ending commitments. Using firms' relationships with politicians accused of misconduct to test our arguments, findings support our theorizing. Collectively, we offer a more complete understanding of firms' reactions to exchange partner misconduct, extending theory and practical knowledge in multiple ways.