Partners in Crime: The Effects of Diversity on the Longevity of Cartels
Academy of Management Journal, Forthcoming
56 Pages Posted: 2 Mar 2015
Date Written: March 1, 2015
Despite the importance of organizational misconduct, we still do not know much about coordinated misconduct between firms. In this study, we get a better understanding of how the profile of the partners involved in cartels affects the longevity of their joint misconduct activities. Drawing upon diversity theory, we leverage a distinction between three types of diversity — i.e., variety of age-based experience, separation in uncertainty avoidance, and power disparity — in collective organizational misconduct between firms and we study their respective influence on the longevity of cartels. Our empirical analysis gives support to our main arguments: the longevity of cartels tends to be increased by the level of variety of age-based experience and power disparity between partners but reduced by their level of separation in uncertainty avoidance. Implications for the literature on organizational misconduct are discussed.
Keywords: Organizational misconduct, Diversity, Cartels, Collective concealment, Longevity
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