The Dynamics of Corruptogenic Organizations

Abstract

Corruptogenic organizational dynamics have been largely ignored in reporting about recent corporate scandals. Using a large group framework, the author identifies factors within an organization that create a breeding ground for unethical or illegal behavior and attract individuals unconsciously looking for ways to damage themselves or others. An organizational culture that promotes questionable attitudes and behaviors along with subgroups that produce powerful corruptive forces can destroy a firm and damage the economy. Enron and the Madoff investment group are identified as corruptogenic organizations put together by founders and a leadership core bent on self-destruction and traumatizing the community–outcomes beyond that which are usually linked to greed. Suggestions are provided to organizational consultants and policy makers as to how to determine the potential for corruption hidden in their midst and to implement countervailing structures and processes.