RT Article
T1 Do the right thing: the imprinting of deonance at the upper echelons
JF Journal of business ethics
VO 180
IS 1
SP 187
OP 213
A1 Wesley, Curtis L.
A1 Martin, Gregory W.
A1 Rice, Darryl B.
A1 Lubojacky, Connor J.
A2 Martin, Gregory W.
A2 Rice, Darryl B.
A2 Lubojacky, Connor J.
LA English
YR 2022
UL https://ixtheo.de/Record/1817388142
AB This study expands the application of deonance theory into organizations’ upper echelons by examining how CEOs imprinted with a sense of duty can influence managerial decision-making. We hypothesize an imprint of bounded autonomy, an ought-force that constrains their decision-making and understanding of behavioral freedom, influences duty-bound CEOs to self-report errors in past financial reporting. We test deonance theory propositions of instrumentality for behavioral expansion, namely loss avoidance and gain attainment, related to institutional ownership concentration and CEO equity ownership.  We use CEOs that are graduates of U.S. service academies as a proxy for duty-bound executives and find firms they lead are more likely to issue a financial restatement to correct a previous reporting error. This finding is robust to alternate explanations such as being error-prone, earnings management, auditor oversight, and risk behaviors. We also find evidence that deonance may be subject to behavioral expansion. The likelihood of issuing a restatement decreases as institutional ownership concentration and CEO equity ownership increases. This study shows imprinted deonance within the C-suite influences important organizational outcomes.
K1 Deonance
K1 Financial restatements
K1 Imprinting
K1 Military CEOs
K1 Upper echelons
K1 Aufsatz in Zeitschrift
DO 10.1007/s10551-021-04903-3