Reversed Riches and Matthew’s Curse: The Liability of Status When Organizations Misbehave

Abstract

Merton’s Matthew Effect essay led to a vast literature on the cumulative advantages associated with prestige. Most management research in this vein focuses on the benefits that come to organizations that receive greater recognition for their performance than their lower status counterparts. In this essay, we argue that increased recognition can also be associated with greater exposure to certain risks when an organization engages in misconduct. We identify two specific mechanisms through which these risks emerge and discuss implications for future research on the complex role that status can play in intensifying and mitigating the risks posed by misconduct.