The Dangers of Decoupling: The Relationship between Compliance Programs, Legitimacy Perceptions, and Institutionalized Misconduct
Academy of Management Journal, Vol. 53, No. 6, pp. 1499-1520, 2010
23 Pages Posted: 10 Mar 2012 Last revised: 17 Mar 2012
Date Written: 2010
This theory-building analysis spotlights a dynamic that occurs between decoupling, legitimacy, and institutionalized misconduct. Using data gathered from a case study of widespread deceptive sales practices at a large financial services firm, we demonstrate the dangers of decoupling an organizational compliance program from the core business activities of an organization. We illustrate how decoupling created a “legitimacy facade” that enabled the institutionalization of misconduct and precipitated a loss of external legitimacy.
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