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There is widespread recognition that organizational culture matters in corporations involved in systemic crime and wrongdoing. However, we know far less about how to assess and alter toxic elements within a corporate culture. The present paper draws on management science, anthropology, sociology of law, criminology, and social psychology to explain what organizational culture is and how it can sustain illegal and harmful corporate behavior. Through analyzing the corporate cultures at BP, Volkswagen, and Wells Fargo, this paper demonstrates that organizational toxicity does not just exist when corporate norms are directly opposed to legal norms, but also when: (a) it condones, neutralizes, or enables rule breaking; (b) it disables and obstructs compliance; and (c) actual practices contrast expressed compliant values. The paper concludes that detoxing corporate culture requires more than changing leadership or incentive structures. In particular, it requires addressing the structures, values, and practices that enable violations and obstruct compliance within an organization, as well as moving away from a singular focus on liability management (i.e., assigning blame and punishment) to an approach that prioritizes promoting transparency, honesty, and a responsibility to initiate and sustain actual cultural change.
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... Third, goals must be attainable or at least approachable for individuals (Locke et al., 1981). When goals are unattainable or perceived as unreachable, effort and performance may be complicated by surreptitious and even unconscious attempts to cut corners to achieve the goal (Barsky, 2008;Bazerman and Gino, 2012;Van Rooij and Fine, 2018). Fourth, "knowledge of results" or providing feedback to individuals allows them to work to improve over time if they become aware and understand the outcomes of their effort (Locke et al., 1981). ...
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In carceral settings such as prisons and jails, setting and achieving goals relates to keeping people safe, meting out punishment for prior violations of the law, and working to improve the lives of justice-involved individuals. The specific practices that transform a stated goal into a fulfilled goal tend to be more complex. In these social control organizations, corrections officers function as key agents for achieving carceral goal(s), but both organization and corrections scholars know relatively little about how corrections staff does this. This chapter frames the unique role of line-level corrections officers within the existing literature on goal setting theories from organization scholars such as Edwin Locke and John Bargh. It also explores how the American corrections officer translates and carries out organizational goals in carceral settings. In using discretionary decision making, organizational commitment, and role conflict as explanatory frameworks, both organization and corrections scholars will gain considerably from exploration of carceral goals and their achievement. As the larger criminal-legal system boasts goals uniquely situated in the social, political, and economic context of the United States, corrections practitioners and scholars must better understand how corrections officers contribute to goal achievement in carceral settings and in what ways it can be improved.
... Examples of failure and frustration and poisonous atmosphere of organisations can be pointed out as the dissatisfaction of people with the type of job, lack of accurate supervision or tasteful supervision of employees, the use of employees in jobs that are not related to their specialisation and education, the appointment of non-specialist managers and sometimes the appointment of managers due to political connections and not their expertise, discrimination among employees, lack of proper and timely use of encouragement and punishment, promotion of flattery culture in the workplace, lack of knowledge of people's abilities in the workplace by managers, Bureaucracy governing administrative complexes, inappropriate goal setting, organisation's influence on the public space, lack of trust or belief in organisational goals, providing the grounds for underemployment of people by senior managers and reducing the sense of belonging due to lack of participation in decision making and sometimes the decisions of the organisation (Raković, 2019;Villar et al., 2018;Rezende and Gonçalves, 2017). In such a critical and toxic situation i.e., when an organisation is like a sick person, it is thus necessary to come up with a solution and particularly a panacea (Van Rooij and Fine, 2018;Bazgosha et al., 2012;Hakkak et al., 2016;Antomarioni et al., 2019) and then provide a ray of hope for employees to escape from a dilemma in an organisation and to attain organisational effectiveness, to increase quality of interactions between colleagues, and to reduce negative job stress in the workplace (Dehkordy et al., 2013;Phillips, 2015). ...
Article
It is natural to think of compliance in terms of liability risk management. In the face of potentially massive liability exposure, it behooves boards of directors and senior executives to take costly steps to reduce these risks for the sake of the firm and its shareholders, akin to other serious enterprise risks. The liability risk management perspective treats compliance as a matter of business judgment rather than a moral or cultural imperative, which has important consequences. The prevailing idea is that firms are expected to invest in precaution (i.e., compliance investments) up to a level where the marginal benefits in terms of diminished liability risk to the firm equal the marginal costs associated with such efforts. This chapter explores from a multidisciplinary perspective the consequences of adopting a liability risk management perspective along three dimensions: the agency cost problem (i.e., whose risk is being managed); the social construct invoked as a result (the problem of cultural legitimacy); and the clash between a company’s own assessment of liability risk and sound public policy.
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In psychological theory and research, compliance is generally seen as the most superficial and weakest form of behavioral adaptation. The current contribution examines how the social context of work – the organizational culture – can be organized to stimulate ethical business conduct. By reviewing social psychological theory and research, we illustrate how an ethical culture can be developed and maintained through ethical leadership and by mainstreaming ethics into existing business models. This is markedly different from more common legal approaches. It requires that a commitment to ethical business conduct is visible from the tone at the top, that organizational leaders “walk the talk” on the work floor, and that this matches the implicit messages that organizational members receive on a day-to-day basis about what really matters and what should be prioritized. Attempts to increase rule compliance are bound to fail when organizational incentives and rewards focus on individual bottom-line achievement regardless of how this is done. Empirical evidence supports the claim that organizational culture is an important factor in stimulating ethical conduct. By creating an ethical culture, organizations develop an “ethical mindset” in organizational members, which helps them not only to understand and internalize existing guidelines in their current work but also to apply the “spirit” of these guidelines to new dilemmas and emerging situations. This makes investing in an ethical culture a sustainable business solution.
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After the COVID-19 pandemic many employers have recognized increased voluntary turnover which became known globally as the great resignation. Some countries have been experiencing this trend more than the others. This paper explores the reasons behind the great resignation, and especially the role of toxic organizational culture in the occurrence of such events. After the analysis of the available literature on turnover, great resignation and toxic culture, this paper concludes that toxic culture alone can not be the reason behind the great resignation. Further empirical research is necessary to identify the true reasons behind the great resignation.
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Recent scholarship on U.S. regulatory federalism has tended to focus on conflict between the states and state resistance to federal initiatives. Less attention has been given to federal–state cooperation and how it affects regulatory enforcement. In this article, we examine intergovernmental cooperation in multistate lawsuits filed by state attorneys general to ascertain trends in multistate regulatory enforcement through litigation over time. We pay particular attention to the increasing use of compliance monitoring by both state and federal regulators, including through monitors independent of the regulated industries. Relying upon a dataset of legal settlements, scoping interviews, and two case studies of recent multistate litigation, we find that federal–state cooperation in multistate lawsuits has become more institutionalized over time. This increased cooperation has created a two-way street in which state and federal regulators often combine resources and learn from each other through the process of compliance monitoring.
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Leaders are seen to embody the vision and goals of the organization, by their subordinates as well as outsiders. The key issues addressed in this chapter indicate how leaders – who define the tone at the top – set the standard for moral behavior in organizations. Unfortunately, it is not easy to specify the characteristics of a moral leader: many great leaders have done praiseworthy as well as shameful things. Situational factors can invite neglect of moral concerns, even for leaders with a strong moral identity. Our analysis highlights the impact of social contexts and organizational identities on displays of ethical leadership. We show how common organizational practices that set leaders apart from their subordinates can introduce a range of moral hazards. Placing leaders on a pedestal conveys a sense of entitlement causing them to devalue concerns that detract from their own achievements. Assigning leaders control over others makes them less mindful of the needs of followers. Inducing fear of losing their privileged position causes leaders to justify their own decisions, while resisting input from others. The research reviewed in this chapter points to solutions organizations can adopt. Avoiding conditions that invite moral disengagement, moral exclusion, and moral justification reduces the emergence of unethical behavior among leaders and their followers. Building a shared identity defined by trust, loyalty, and responsibility among people working at different levels in the organization points the way towards moral leadership.
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Compliance, or the behavioral response to legal rules, has become an important topic for academics and practitioners. A large body of work exists that describes different influences on business compliance, but a fundamental challenge remains: how to measure compliance or noncompliance behavior itself? Without proper measurement, it's impossible to evaluate existing management and regulatory enforcement practices. Measuring Compliance provides the first comprehensive overview of different approaches that are or could be used to measure compliance by business organizations. The book addresses the strengths and weaknesses of various methods and offers both academics and practitioners guidance on which measures are best for different purposes. In addition to understanding the importance of measuring compliance and its potential negative effects in a variety of contexts, readers will learn how to collect data to answer different questions in the compliance domain, and how to offer suggestions for improving compliance measurement.
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Compliance, or the behavioral response to legal rules, has become an important topic for academics and practitioners. A large body of work exists that describes different influences on business compliance, but a fundamental challenge remains: how to measure compliance or noncompliance behavior itself? Without proper measurement, it's impossible to evaluate existing management and regulatory enforcement practices. Measuring Compliance provides the first comprehensive overview of different approaches that are or could be used to measure compliance by business organizations. The book addresses the strengths and weaknesses of various methods and offers both academics and practitioners guidance on which measures are best for different purposes. In addition to understanding the importance of measuring compliance and its potential negative effects in a variety of contexts, readers will learn how to collect data to answer different questions in the compliance domain, and how to offer suggestions for improving compliance measurement.
Chapter
Compliance, or the behavioral response to legal rules, has become an important topic for academics and practitioners. A large body of work exists that describes different influences on business compliance, but a fundamental challenge remains: how to measure compliance or noncompliance behavior itself? Without proper measurement, it's impossible to evaluate existing management and regulatory enforcement practices. Measuring Compliance provides the first comprehensive overview of different approaches that are or could be used to measure compliance by business organizations. The book addresses the strengths and weaknesses of various methods and offers both academics and practitioners guidance on which measures are best for different purposes. In addition to understanding the importance of measuring compliance and its potential negative effects in a variety of contexts, readers will learn how to collect data to answer different questions in the compliance domain, and how to offer suggestions for improving compliance measurement.
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This paper aims to establish how organization and management research, an extensive field that has contributed a great deal to research on corruption, could apply insights from other disciplines in order to advance the understanding of corruption, often considered as a form of unethical behavior in organizations. It offers an analysis of important contributions of corruption research, taking a ‘rationalist perspective’, and highlights the central tensions and debates within this vast body of literatures. It then shows how these debates can be addressed by applying insights from corruption studies, adopting anthropological lens. The paper thus proposes a cross-disciplinary approach, which focuses on studying corruption by looking at what it means to individuals implicated by the phenomenon while engaging in social relations and situated in different contexts. It also offers an alternative approach to the study of corruption amidst claims that anti-corruption efforts have failed to achieve desirable results.
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In September 2015, the Volkswagen Group (VW) admitted the use of 'defeat devices' designed to lower emissions measured during VW vehicle testing for regulatory purposes. Globally, 11 million cars sold between 2008 and 2015 are affected, including about 2.6 million in Germany. On-road emissions tests have yielded mean on-road NOx emissions for these cars of 0.85 g km⁻¹, over four times the applicable European limit of 0.18 g km⁻¹. This study estimates the human health impacts and costs associated with excess emissions from VW cars driven in Germany. A distribution of on-road emissions factors is derived from existing measurements and combined with sales data and a vehicle fleet model to estimate total excess NOx emissions. These emissions are distributed on a 25 by 28 km grid covering Europe, using the German Federal Environmental Protection Agency's (UBA) estimate of the spatial distribution of NOx emissions from passenger cars in Germany. We use the GEOS-Chem chemistry-transport model to predict the corresponding increase in population exposure to fine particulate matter and ozone in the European Union, Switzerland, and Norway, and a set of concentration-response functions to estimate mortality outcomes in terms of early deaths and of life-years lost. Integrated over the sales period (2008–2015), we estimate median mortality impacts from VW excess emissions in Germany to be 1200 premature deaths in Europe, corresponding to 13 000 life-years lost and 1.9 billion EUR in costs associated with life-years lost. Approximately 60% of mortality costs occur outside Germany. For the current fleet, we estimate that if on-road emissions for all affected VW vehicles in Germany are reduced to the applicable European emission standard by the end of 2017, this would avert 29 000 life-years lost and 4.1 billion 2015 EUR in health costs (median estimates) relative to a counterfactual case with no recall.
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This article demonstrates how the content and meaning of California’s consumer protection laws were shaped by automobile manufacturers, the very group these laws were designed to regulate. My analysis draws on and links two literatures that examine the relationship between law and organizations but often overlook one another: political science studies of how businesses influence public legal institutions, and neo-institutional sociology studies of how organizations shape law within their organizational field. By integrating these literatures, I develop an “institutional-political” theory that demonstrates how organizations’ construction of law and compliance within an organizational field shapes the meaning of law among legislators and judges. This study examines case law and more than 35 years of California legislative history concerning its consumer warranty laws. Using institutional and political analysis, I show how auto manufacturers, who were initially subject to powerful consumer protection laws, weakened the impact of these laws by creating dispute resolution venues. The legislature and courts subsequently incorporated private dispute resolution venues into statutes and court decisions and made consumer rights and remedies largely contingent on consumers first using manufacturer-sponsored venues. Organizational venue creation resulted in public legal rights being redefined and controlled by private organizations.
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Regulatory reforms and changing community expectations about organizational behaviour have increased the emphasis on the role of culture in organizational compliance. This conceptual paper proposes a framework that captures the complexities of the relationship between compliance and culture by drawing from two theories relevant to organizational culture: Neo-Institutional Theory and the Competing Values Model. By integrating elements of these theories, three core dimensions of compliance culture are identified: legitimacy, permeability and control. These core dimensions provide for a pluralist approach to theorising around compliance culture. In addition to its theoretical contribution, the paper concludes that there may be practical utility in linking organizational compliance outcomes with performance on the three core dimensions. It is also suggested that compliance culture profiles using these dimensions may be used to predict how organisations might need to respond to regulatory reforms.
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From within an organizational strain perspective, this paper examines the effects of managerial succession, CEO background, decentralized management, and product dominant strategies on the reported corporate antitrust offending levels of 43 basic manufacturing companies over a 22-year period. In the aggregate, findings suggest that past illegal involvement predicts future offending; companies headed by finance and administrative CEOs have higher offending levels than do firms headed by CEOs from other backgrounds; a turnover in top management generally decreases offending levels; the pursuit of product dominant strategies increases the number of anticompetitive acts; and offending levels are unrelated to whether new leaders are recruited from within or outside the firm, whether the CEO is also Chair of the Board of Directors, or whether management is centralized or decentralized. The effects of some variables on corporate offending interact with firm performance.