Process and system technology advancements have often reduced the focus from ethics and character.
Milgram newspaper advertisement
Lately it is popular to view business professionals as immoral and greedy, or more systemically that capitalism especially rewards questionable character. It is also popular to believe we can legislate morality especially in the workplace. This is not possible for both psychological and systemic reasons. In fact many of the laws enacted in the last twenty years, inspired from any number of political forums, have made the work environment a colder and more suspicious place. That is a great and unfortunate externality when the goal of any organization must be aiding each other to continuously improve.
As an earnest young teenager my discovery of philosophy and psychology became of immediate and enduring interest. I had a burning desire to understand the world around me as well as my own thoughts and motivations. I quickly became inured with character development and as I understood more of the atrocities of World War II, I began a search for deeper understanding.
Four sources eventually informed my thinking, and real world experience has buttressed those thoughts ever since:
Milgram Experiments
| Obedience to Authority: An Experimental View |
Milgram’s Electro Shock experiment generated an uproar by psychologists who often seemed more agitated by the ethics of the experiment than their profound implications on human nature. Readers unaware of these experiments and their many variations are strongly encouraged to read more deeply than this blog post. In his own words:
I set up a simple experiment at Yale University to test how much pain an ordinary citizen would inflict on another person simply because he was ordered to by an experimental scientist. Stark authority was pitted against the subjects’ [participants'] strongest moral imperatives against hurting others, and, with the subjects’ [participants'] ears ringing with the screams of the victims, authority won more often than not. The extreme willingness of adults to go to almost any lengths on the command of an authority constitutes the chief finding of the study and the fact most urgently demanding explanation.
Approximately 61-65% of participants shocked other volunteers, apparently at least to unconsciousness, on the word of an unknown ‘scientist.’ Later variations included signs on the shocking device including, “Danger, Death” etc., and having the volunteer physically restrain the ‘subject’ so they could be punished. Nevertheless, the volunteers continued.
No one ever left the ‘experiment’ and attempted to report them to authorities.
Psychologists quickly made the experiments illegal, although The Stanford Prison Experiment conducted years later by Philip Zimbardo confirmed the results in a chilling fashion.
The Banality of Evil
 | Eichmann in Jerusalem: A Report on the Banality of Evil (Penguin Classics) |
With so many thousands of civilians and soldiers helping Hitler commit mass genocide against the Jews, a concerted effort was made to understand how a significant portion of a population could commit such horrendous acts.
Hannah Arendt argues in this brilliant work that evil is not radical but simply a function of banality; the tendency of ordinary people to obey orders and conform to mass opinion without critically thinking about the results of their action or inaction. Even if they do, they cognitively excuse themselves by citing authority. In the end, evil is not thoughtful or demonic. Often it’s just bureaucratic.
The Locus of Control
In the 1950’s, psychologist Julian Rotter developed a concept bridging both behavioral and cognitive psychology which he called Locus of Control of Reinforcement. Briefly, it refers to an individual’s perception about the underlying main causes of events in his/her life. Do you believe your destiny is controlled principally by yourself or by external forces (such as fate, god, or powerful others)?
The prevailing thought was that internal individuals might exhibit greater capability in initiating action in the face of daily stress. Most research on the concept pertained to taking care of ones’ health and exercise. No compelling correlation was ever established.
Research was also attempted to demonstrate that highly internal individuals might also withstand pressure to commit illegal acts in the face of authority. It is no coincidence that Philip Zimbardo of the Stanford Prison Experiments investigated the Locus of Control. Unfortunately the results showed no positive correlation just as in the health experiments.
While an internal orientation matched with a modicum of competence, tends to be more achievement oriented and to get better paying jobs, it is also true that an external orientation tends towards easy-going, relaxed, happy lives. But here again, causality is a factor, and over-generalizations are often misleading.
The Ethics lesson here though is somewhat significant. There seems to be no correlation between people with a high sense of self-control and affectedness, and the ability to perform independently in the face of adversity.
The Rise and Decline of Nations
 | The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities |
Destructive behavior is also hugely systemic. Economist Mancur Olsen eloquently makes the point in this ground breaking book that over time a stable bureaucracy tends to develop an increasing number of special interest groups or distributional coalitions whose political power will accumulate, and therefore gradually impede and stifle economic growth of the organism even while they exert an ever larger control over operations, process and creativity.
In Olsen’s country research, the dangers of unions and cartelized industries alike are identical. His argument includes the example that West Germany and Japan enjoyed much faster growth than say, Britain, after WWII mainly because their cartelized groups were destroyed forever. The book challenged the way economists and politicians viewed special interests.
Olsen was somewhat surprised that Thatcher was able to at least partially divest Britain from these groups without the benefit of actual physical revolution. Likewise, some critics of his work make the point that he did not view democratic politicians themselves as eventual actors, substituting the goal of re-election for encompassing national advancement and progress.
His theories often put him at odds with Keynes and Monetarists, and often seem more sympathetic with Austrian economic thought, although he never addressed his proclivities directly in this manner, allowing his research to lead him. He did lay bare the absolute inability of classical macroeconomic theory to predict behavior in developed stable countries, and uncovers a number of theoretical weaknesses.
For example, his theories regarding stickiness of wages and unemployment bring a fresh approach where current macro economics admittedly falter.
The summary of his work is that any bureaucracy must be eternally vigilant against diversion of the organizational mission by powerful self-interested coalitions. Like parasites, they threaten the life of the organism as a whole. Coalitions in bureaucracies make it more difficult to adapt and change during calamities, construct barriers to entry, build edifices where sanity would fear to tread, and preclude solutions that would more quickly bring restoration due to adversity. The reason is simple; coalitions do not have the mission in mind.
Most clearly, midst globalization and increasing rates of change, special interests and rules and regulations in organizations tend to restrict empowerment of individuals to increase productivity, innovate, and adapt. Increasing control during historic rates of change is adversarial to both the individual and the long term health of organizations.
Olsen makes the convincing case that the more government involves itself in distribution and re-allocation, the poorer we all become. And it is the young and the poor who hurt the most.
Summary of authority and bureaucracy
The examples above do not portray a heartening picture. People do what we tell them. It seems to be mapped into our brain stems. Personal experience in discovering unethical and illegal behavior buttress these findings; ‘ordinary’ people commit crimes because they are either under the thrall of a mentor or aping what they consider most others would do in their place. The pressure to conform when one’s career and livelihood are on the line is immense. Certainly the research paints a picture of the power of authority and organizations not only to affect personal ethics, but the implication is very real that institutional pressure on everyone can be almost impossible to withstand. This pressure alone must surely stifle creativity at the least.
Of course the research cuts both ways. The pressure to act responsibly can also be immense, both from an authoritarian and peer perspective. Much of this website is dedicated to the idea of structure and culture as a motivating, freeing force.
Synergistically, special interests inevitably bring bureaucracies, societies and cultures to their knees. Government bureaucracies, like a parasite, tend to infest the host until it dies, or remains perpetually sick.
What then shall we do? Certainly there is potential for improvement in our traditional institutions, our audit and oversight sectors, and the complexion of our Boards. We are not expecting nearly enough. More personally, there is also potential to improve the efficacy of incentives and compensation, especially for upper management, along with a re-examination of fiduciary duty in a free market society (if we wish to retain at least some version of such a system). Lastly, we believe that structure has significant potential to improve both efficiency and efficacy. After all, ethics are hugely situational and systemic.
