The three cases that follow should be familiar. By taking a look at three corporate cases, we may be able to identify the roots of the kind of misconduct that not only ruins some people’s lives, destroys institutions, and gives business as a whole a bad name but that also inflicts real and lasting harm on a large number of innocent people. Three CasesĪmitai Etzioni, professor of sociology at George Washington University, recently concluded that in the last ten years, roughly two-thirds of America’s 500 largest corporations have been involved, in varying degrees, in some form of illegal behavior. For the hard truth is that corporate misconduct, like the lowly cockroach, is a plague that we can suppress but never exterminate. By looking at these rationalizations in light of these cases, we can develop some practical rules to more effectively control managers’ actions that lead to trouble-control, but not eliminate. In my view, the explanations go back to four rationalizations that people have relied on through the ages to justify questionable conduct: believing that the activity is not “really” illegal or immoral that it is in the individual’s or the corporation’s best interest that it will never be found out or that because it helps the company the company will condone it. Reading them we have to ask how usually honest, intelligent, compassionate human beings could act in ways that are callous, dishonest, and wrongheaded.
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The stories are always slightly different but they have a lot in common since they’re full of the oldest questions in the world, questions of human behavior and human judgment applied in ordinary day-to-day situations. How can we explain the misbehavior that took place in these organizations-or in any of the others, public and private, that litter our newspapers’ front pages: workers at a defense contractor who accused their superiors of falsifying time cards alleged bribes and kickbacks that honeycombed New York City government a company that knowingly marketed an unsafe birth control device the decision-making process that led to the space shuttle Challenger tragedy. Hutton find themselves pleading guilty to 2,000 counts of mail and wire fraud, accepting a fine of $2 million, and putting up an $8 million fund for restitution to the 400 banks that the company had systematically bilked?
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What could have driven the managers of Continental Illinois Bank to pursue a course of action that threatened to bankrupt the institution, ruined its reputation, and cost thousands of innocent employees and investors their jobs and their savings? How could top-level executives at the Manville Corporation have suppressed evidence for decades that proved that asbestos inhalation was killing their own employees?