THE DARK PATTERN

Two academics explore the roots of corporate scandals.

Sometimes, it seems that every day brings news of another corporate scandal. In many cases, unethical behavior results in stern punishments from regulators, ranging from prison sentences to fines. Often, though, there are few changes in organizations, and similar issues arise again. Both Swiss academics, the authors of this book cast a broad net, examining scandals in the U.S., Europe, and Asia, looking for common elements in cases such as Theranos, Enron, Wells Fargo, Foxconn, and France Télécom. They reject the idea that scandals are simply the result of a few bad actors and focus instead on the corporate context that permits, encourages, or even requires unethical behavior. They define nine “building blocks” of what they call “ethical blindness,” with rigid ideology being the most important. This framework allows Palazzo and Hoffrage to examine how ordinary people are drawn into unethical behavior. The process often begins with small transgressions but soon slides into acceptance of criminal acts. The prevalence of warlike language and groupthink are signs of increasing psychopathy. Once these toxic patterns are embedded in an organization, change is difficult, and getting rid of a few people, even at the senior level, is not sufficient. The authors provide a program for reform at every tier, with built-in checks to monitor improvements. They emphasize that unethical practices are not limited to large corporations, so all managers and business owners should be aware of the potential for problems. This book is a good place to start.

An incisive examination of how corporate malfeasance develops and how it can be fought.