Abstract

Prior literature suggests many benefits stemming from founders’ strong identification with their firms. We suggest, however, that there is also a potential dark side. We argue that founders can become overidentified with their organizations, making them more likely to engage in irresponsible behavior that protects the firm but harms others, as moral and societal norms are viewed as obstacles to fulfilling an organization’s goals. However, we also argue that the presence of a “second-in-command” can act as a key safeguard against founder CEOs’ overidentification by reigning in some of the founders’ worst impulses. We find support for our predictions using panel data with over 4,000 firm-years. Collectively, our findings offer fresh contributions to the literatures on organizational identification, founder leadership, and corporate social irresponsibility.

• Keyword(s):
• accounting 124
• corporate social responsibility 36
• strategy and entrepreneurship 201