Over the last decade, scandals within the UK Financial Service sector have impacted their legitimacy and raised questions whether a compliance culture exists or not. Several institutional changes at the regulatory and normative levels have targeted stakeholders’ concerns regarding compliance culture and led to changes in the legitimation process. This paper attempts to address a gap in the literature by asking the following question: How is the UK financial institutions’ compliance culture shaped by the institutional environment and changing legitimacy claims? (...) Towards achieving this objective, the paper draws on the institutional theory and pays attention to the various configurations of the legitimacy notion :451–478; 2017). The paper utilises a longitudinal interpretive design and undertakes a qualitative content analysis of fines issued by the UK regulator and the communicated response of violating firms as well as non-sanctioned firms. Our findings indicate that there is a cyclical ‘evolutionary compliance’ rather than the more widely recognised state of ‘compliance culture’. This culture is fuelled by interchangeable isomorphic forces where the majority of violating firms are seen to issue similar responses to the regulators sanction to maintain their reputation and legitimacy in the market. Notably, legitimacy is now defined within an interactive process between the regulator and firms rather than being static and achieved by ticking the box. (shrink)

Whistleblowing is regularly identified as corporate control mechanism to prevent and uncover fraud. We review and compare the legal situation for whistleblowers in the People’s Republic of China and India. In a survey of 942 employees from private companies in both countries, we take a look at the status quo of whistleblowing system implementation, explore preference of channels to disclose fraud or corruption, and analyze under which conditions and what kind of employees prefer external over internal whistleblowing. We find that (...) provisions for mandatory whistleblowing systems can be found in the law of both countries. In China in particular, protection is scattered across many different laws in the private sector. Indian companies seem to have systems in place more often, although this difference becomes smaller the larger the company. The general preference of internal over external channels is similar across countries. Our regression models suggest that external channels are preferred over internal ones when fear of retaliatory measures is higher, the company is smaller, and the whistleblower is female. In line with prior literature, the effect of fear of retaliation is moderated by gender: women are less influenced by retaliation. All in all, implementation of whistleblowing systems seems ubiquitous in both countries; legal protection and comprehensive measures to decrease retaliation are lacking. Additional implications of findings are discussed. (shrink)

AbstractIntegrity is considered an important corporate value. Yet recent global events have highlighted the challenges firms face at living up to their stated values, especially when extended supply chain partners are involved. The concept of Supply Chain Integrity (SCI) can help firms shift focus beyond internal corporate integrity, toward supply chain integrity. Researchers and managers will benefit from an understanding of the SCI concept toward implementing SCI to better align supply chain partners with stated corporate values. This research fully develops (...) and empirically grounds the firm-level, inter-firm-oriented SCI concept. The thematic analysis of six firms’ archival and website content elaborated empirical descriptions of SCI themes and enabled the development of a process model for SCI, presenting a novel view of the underlying process by which firms can assess, develop, and maintain SCI across their supply chains. We propose the SCI model as an evolutionary process to improve a firm’s supply chain sustainability, rather than a dichotomous end state where firms either “have” integrity or they don’t. The SCI model could be used as a tool to help leaders create necessary change to better align values and supporting statements with culture, while influencing and affecting stakeholders across the supply chain. This is particularly important in today’s world, where business leaders must consider all stakeholders and address important stakeholder-driven issues such as supply chain sustainability, resilience, and security, which are now at the forefront in the ever-changing environment. (shrink)