Corporations often approach ethics as an individual problem, designing oversight systems to identify the “bad apples” before they can turn the organization into a “rotten barrel.” But at places like Wells Fargo, FIFA, and Volkswagen, we can’t fully describe what happened by reading profiles of John Stumpf, Sepp Blatter, or Martin Winterkorn. Bad apple explanations also fail to explain the string of ethical crises at Uber, the long-term impunity of powerful men who sexually harass colleagues, or any of the other ethics scandals we’ve seen this year. Rather, we see a “tone at the top” underpinned by widespread willful blindness, toxic incentives, and mechanisms that deflect scrutiny. These conditions seem to persist and metastasize. They replicate despite changes in leadership and in management systems.
5 Signs Your Organization Might Be Headed for an Ethics Scandal
All too often, when an ethical scandal breaks, company leadership is taken completely by surprise. But research suggests there may be ways to predict when an organization is likely to have some underlying ethical issues. In this piece, the author uses a review of the research on ethics, as well as interviews with 23 experts, to shed light on the key organizational factors that correlate with ethical problems: a pervasive sense of urgency or fear; teams or units that are isolated, either geographically or socially; high organizational complexity or fragmentation, allowing for plausible deniability; a culture in which success begets impunity; and the use of in-group language. While there are no guarantees, companies can reduce their chances of experiencing scandals by identifying and eliminating these signs of a toxic culture.