Toxic corporate culture: Assessing organizational processes of deviancy

Benjamin van Rooij, Adam Fine

Research output: Contribution to journalArticlepeer-review

17 Scopus citations

Abstract

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.

Original languageEnglish (US)
Article number23
JournalAdministrative Sciences
Volume8
Issue number3
DOIs
StatePublished - Sep 2018

Keywords

  • Business ethics
  • Compliance
  • Ethical climate
  • Organizational crime
  • Organizational culture
  • Social norms

ASJC Scopus subject areas

  • Business, Management and Accounting(all)

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