• Entry
  • Reader's guide
  • Entries A-Z
  • Subject index

Legal Sanctions

An adverse action by a company may subject it to legal sanctions. The bad news about company misbehavior may propel a regulator to initiate an investigation or a plaintiff’s lawyer to file a lawsuit, and the company could end up being ordered to pay a hefty financial fine. The same bad news may also subject the company to “reputational sanctions.” That is, the company’s reputation may take a hit: Investors hearing about a corporate governance scandal may start demanding higher returns for their investment, consumers reading about a product defect may stop purchasing products, and so forth. The aggregate of diminished future business opportunities constitutes the reputational sanction. This entry focuses on how legal and reputational sanctions interact with each other. Specifically, how does ...

    • Loading...
    locked icon

    Sign in to access this content

    Get a 30 day FREE TRIAL

    • Watch videos from a variety of sources bringing classroom topics to life
    • Read modern, diverse business cases
    • Explore hundreds of books and reference titles