Toxic Corporate Culture: Assessing Organizational Processes of Deviancy

Van Rooij, B., & Fine, A. (2018 ). Toxic Corporate Culture: Assessing Organizational Processes of Deviancy Administrative Sciences, 8(3), 23-61.

UC Irvine School of Law Research Paper No. 2020-11

39 Pages Posted: 31 Mar 2020 Last revised: 1 Apr 2020

See all articles by Benjamin van Rooij

Benjamin van Rooij

University of California, Irvine School of Law; University of Amsterdam - Faculty of Law

Adam Fine

Arizona State University (ASU) - School of Criminology & Criminal Justice

Date Written: June 22, 2018

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.

Keywords: compliance,organizational culture,organizational crime,ethical climate,business ethics,social norms

JEL Classification: m14

Suggested Citation

van Rooij, Benjamin and Fine, Adam, Toxic Corporate Culture: Assessing Organizational Processes of Deviancy (June 22, 2018). Van Rooij, B., & Fine, A. (2018 ). Toxic Corporate Culture: Assessing Organizational Processes of Deviancy Administrative Sciences, 8(3), 23-61. , UC Irvine School of Law Research Paper No. 2020-11, Available at SSRN: https://ssrn.com/abstract=3563093

Benjamin Van Rooij (Contact Author)

University of California, Irvine School of Law ( email )

401 E. Peltason Dr.
Ste. 1000
Irvine, CA 92697-1000
United States

University of Amsterdam - Faculty of Law ( email )

Amsterdam, 1018 WB
Netherlands

Adam Fine

Arizona State University (ASU) - School of Criminology & Criminal Justice ( email )

411 N. Central Avenue
Phoenix, AZ 85004
United States

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