Abstract

Organizational misconduct has become increasingly prevalent, driving scholarly interest in what causes organizations to engage in this behavior. Despite the fact that nonprofit, public, and for-profit firms coexist, collaborate, and compete, we know little about how these organization types differ in how and when they engage in misconduct. We describe how legal governance rules and key stakeholders influence the objectives of each organization type, and, in turn, the expected costs and benefits of misconduct. We draw implications for the distinct ways that organizations of each type are likely to engage in misconduct. We provide empirical support for our theoretical predictions by comparing for-profit, nonprofit, and public firms in a field setting that allows us to leverage a policy change to identify misconduct: the liver transplant market. We contribute to an understanding of how nonprofit, public, and for-profit organizations vary in how and when they engage in misconduct.

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Citation

Burbano, Vanessa, and J. Ostler. "Differences in Misconduct by Nonprofit, Public, and For-profit Organizations." Columbia Business School, 2019.

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