Sanctions, Incentives, and Corporate Behavior

by Peter Jones



This article briefly examines a few specific cases where certain corporations changed their behavior prior to being heavily sanctioned. It also looks at other cases where no behavioral change took place until after sanctions were imposed, often because of heavier countervailing pressures, including incentives, to maintain the status quo. Both kinds of cases can be instructive as to the massive weight of pressures, whether in the form of incentives or sanctions, which often are required to bring about significant corporate behavioral change, in many instances irrespective of the nature of the particular change in question. Whether one is concerned about current corporate behavior from a declining competitive or inadequate social responsibility standpoint, or believes that if the dollar would only come down, most but not all of these problems would be solved, with a few important exceptions, more insight into corporate behavior should be useful. Many concerned and experienced observers believe that, as a nation, the United States need to offset the pressures for short-term success at any price. If one is to do this, one need counterpressures that give primacy to longer-term interdependent economic and social goals.

California Management Review

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