BUS 374 Lecture Notes - Lecture 11: Loss Aversion, Banking In India, Corporate Social Responsibility
16 Apr 2018
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Status and corporate illegality: illegal loan recovery practices of commercial banks. This study considers the possibility that status theory might have over- estimated the relative security of high-status organizations. We examine our theory that an inability to meet associates" expectations about quality might be the source of insecurity, using data on the illegal loan recovery practices employed by commercial banks in india between 2005 and 2009. High-status banks were found to be particularly likely to engage in illegal recovery practices. This was especially true when a high- status bank had experienced a decline in its financial asset quality or had fallen behind the financial asset quality of its peers. Volkwagon defect system: why do high-status organizations involve in illegal activities, to avoid loss (status loss or revenue loss). When the integrity of the partner becomes a relevant for the exchange partners, then organizations have more reason to avoid illegal activities rather than to use it to gain benefits.
