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Misconduct is wrongful, improper, or unlawful conduct motivated by premeditated or intentional purpose or by obstinate indifference to the consequences of one's acts. It is an act which is forbidden or a failure to do that which is required. Misconduct may involve harm to another person's health or well-being.
Misconduct is of particular importance in professional settings (e.g. lawyers, doctors, military personnel), in the workplace and various institutions (e.g. schools, prisons). Two categories of misconduct are sexual misconduct and official misconduct. In connection with school discipline, "misconduct" is generally understood to be student behavior that is unacceptable to school officials but does not violate criminal statutes, including absenteeism, tardiness, bullying, and inappropriate language.[1] Misconduct in the workplace generally falls under two categories. Minor misconduct is seen as unacceptable but is not a criminal offense (e.g. being late, faking qualifications). Gross misconduct can lead to immediate dismissal because it is serious enough and possibly criminal, e.g. stealing or sexual harassment.


Organization and management scholars have paid much attention to the causes, forms, modes of development, and consequences of misconduct within or among organizations.[2] They have studied different types of misconduct, such as white-collar crimes, insider trading, or deceptive accounting.[3][4] Financial misconduct became prominent after the financial crisis of 2007–2008 that revealed how financial organizations can operate profitable illicit activities over decades.[5] Organizational misconduct can involve many organizations that collaborate, such as the case of cartels where firms reduce competition by agreeing on production or pricing, then conceal their actions together and maintain collective secret.


The failure to understand and manage ethical risks played a significant role in the financial crisis. The difference between bad business decisions and business misconduct can be hard to determine, and there is a thin line between the ethics of using only financial incentives to gauge performance and the use of holistic measures that include ethics, transparency and responsibility of stakeholders. From CEO's to traders and brokers, all-too-tempting lucrative financial incentives existed for performance in the financial industry.
The past widespread financial misconduct led to a call for financial reform. The Dodd-Frank Wall Street Reform and Consumer Protection Act was passed in 2010 to increase accountability and transparency in the financial industry and protect consumers from deceptive financial practices.[6]


  1. ^ Special education dictionary (in Spanish). Horsham, PA: LRP Publications. 1997. ISBN 978-1-57834-002-6. OCLC 36543485.
  2. ^ Greve, Henrich R.; Palmer, Donald; Pozner, Jo‐Ellen (2010). "Organizations Gone Wild: The Causes, Processes, and Consequences of Organizational Misconduct". Academy of Management Annals. 4 (1): 53–107. doi:10.5465/19416521003654186. ISSN 1941-6520.
  3. ^ Harris, Jared; Bromiley, Philip (2007). "Incentives to Cheat: The Influence of Executive Compensation and Firm Performance on Financial Misrepresentation". Organization Science. 18 (3): 350–367. doi:10.1287/orsc.1060.0241. ISSN 1047-7039. JSTOR 25146106. S2CID 23443477.
  4. ^ Zahra, Shaker A.; Priem, Richard L.; Rasheed, Abdul A. (2005). "The Antecedents and Consequences of Top Management Fraud". Journal of Management. 31 (6): 803–828. doi:10.1177/0149206305279598. ISSN 0149-2063. S2CID 146237606.
  5. ^ Klimczak, Karol Marek; Sison, Alejo José G.; Prats, Maria; Torres, Maximilian B. (2021-05-06). "How to Deter Financial Misconduct if Crime Pays?". Journal of Business Ethics. Springer Science and Business Media LLC. doi:10.1007/s10551-021-04817-0. ISSN 0167-4544.
  6. ^ Ferrell, Fraedrich: Business Ethics, eleventh edition Ethical Decision Making and Case, Sexual Harassment in Workplace. February 17, 2017. p. 80

Further reading[edit]

  • Ghaiye, B. R. (2015). Misconduct in Employment (Hardbound ed.). EBC. ISBN 9789351450252.

External links[edit]