Status and Corporate Illegality: Illegal Loan Recovery Practices of Commercial Banks in India

Tue, 26 Nov 2013 2:00 PM


In this Pacific Region Forum we will examine the motivations for high status organizations to engage in corporate illegality. While engagement in illegality has often been attributed to the strain created by the difficulty in achieving status goals, received wisdom in status research suggests that high status organizations are shielded from such status strains due to their relative security in their high status positions. In this forum, we integrate arguments from a role theoretic conception of reputation and insights from status theory to argue that high status organizations are indeed more insecure in their incumbent high status position, as they have to continuously uphold high reputation for quality in the eyes of their incumbent associates. This insecurity, we argue, motivates them to engage in corporate illegality to improve their reputation for quality. And this effect will be stronger when they fall short of their historical reputation for quality or the reputation for quality of their high status peers. But the effect weakens when incumbent high status associates also hold high expectations for reputation for integrity from them. Data on illegal loan recovery practices of commercial banks in India between 2005 and 2009 lend strong support to these arguments.


Rajiv Krishnan Kozhikode
Assistant Professor, International Business / Management and Organization Studies
Beedie School of Business

Dr. Kozhikode holds a Ph.D. in management from the Hong Kong University of Science and Technology. His primary research interest is in the consequences of institutional pluralism on organizational choices. He is also interested in the sociological foundations of organizational misconduct and organizational innovation in emerging economies in the Asia Pacific region. In Dr. Kozhikode's dissertation he examined how commercial banks and newspaper new ventures manage the institutional pluralism in India. The first essay from his dissertation has appeared in the Academy of Management Journal in 2012 and was one of the three finalists for the journal's best paper award that year.

2–3:30 pm, November 26, 2013

SFU at Harbour Centre (room 2270)
515 West Hastings Street, Vancouver
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