Flimsy Sanity: When Power Corrupts

Flimsy Sanity

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. - Friedrich Nietzsche

Thursday, October 16, 2008

When Power Corrupts

When Power Corrupts: 'Those People' Look a Lot Like Us
In the hindsight of headlines and media coverage, it's easy to see the executive being led away in handcuffs as a corrupt individual. But that same person probably perceives himself as ethical within the context of their organization. "These people sincerely believe that this is the way things are done at their company," Ashforth says.

Indeed, by convincing themselves that their behavior really is not unethical, employees can engage in corrupt business practices without feeling any pangs of conscience. Corrupt individuals depend on rationalizations to justify their behavior, including:

Denying responsibility: actors convince themselves they had no choice but to participate in unethical behavior.
Denying injury:if no one is hurt, the behavior isn't really unethical.
Denying victims: blaming violated parties for what happened on the grounds that they "deserved it."
Social weighting: this rationalization includes condemning anyone who questions their actions as a way of mitigating the charges. Individuals may also focus on other companies that are "worse than we are" as a way to deflect responsibility.
Appeal to higher loyalties: unethical behavior is justified if it was "for a good cause" like loyalty or higher ideals.
Metaphor of the ledger: using seniority or other variables to justify unethical behavior on the grounds that they have earned the right.

As a group, department or organization systemically adopts rationalizations, employees reinforce each other's behavior and corruption is accepted as valid business practice. But this is not to say that individuals are not aware that their behavior violates societal norms –- that's why people don't talk about their actions outside of work. Instead, they compartmentalize their lives so that work becomes a separate world with different rules and norms -- a world that neighbors and friends wouldn't understand.

Socialization is another critical factor in understanding how corruption becomes institutionalized. To survive, newcomers must be initiated into the organization's corrupt systems. "You cannot coerce corruption in an organization because people will rebel," Ashforth says. Instead, organizations subtly socialize newcomers by rewarding attitude change toward unethical behaviors, gradually introducing corrupt activity, and creating situations where individuals feel they must compromise their values to solve problems. The key is to convince the newcomer that she or he has a choice all along when in fact, they really don't.

Often an organization is just too mired in corruption to be helped from within. In those cases, a strong external force -- often a lawsuit or criminal charges -- is needed to bring about change. Organizations can recover and even thrive after a bout of corruption, but it requires that current leadership -- scarred by too many years of rationalizations and excuses -- be replaced with new management that has a clear mandate to clean up the organization and the authority and support needed to get the job done.

I was doing a little math this morning. I read that subprime mortgages made up about 20% of the mortgages. According to 2000 statistics, there were about 106 million households and I rounded that up to 110 million. Dividing 20 percent of those into 700000000000 means those poor people were buying houses valued at over 300 thousand. Talk about your welfare queens and/or those mortgages were sold many times and it will take trillions to balance the books.

Or as one commenter said:
The normalization of white collar crime without punishment is now complete. I have not read of a single instance of any leaders responsible for the largest collapse of financial institutions in recent history being prosecuted for illegal activity. Most are receiving huge payments as they leave their wrecked organizations. The legitimization of cunningly crafted misrepresentation has permeated every sector of government and industry, leaving us a profoundly sick and dysfunctional economy. We will now reap the consequences.

There is no quick structural fix for societal decadence. It will take decades to recover."


  • At 9:49 AM, Anonymous R J Adams said…

    "....organizations subtly socialize newcomers by rewarding attitude change toward unethical behaviors, gradually introducing corrupt activity, and creating situations where individuals feel they must compromise their values to solve problems.....
    Is that the same as talking a poor man into taking part in a bank robbery?


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