The Dark Side of Organizations
Introducing Organizational Deviance: Routine Nonconformity
When studying organizations, we can find unanticipated suboptimal outcomes. Diane Vaughan calls this organizational deviance ‘routine nonconformity’. This “Dark Side” of organizations is not solely the result of chance or system breakdown but is often a predictable and recurring by-product of (1) organizational characteristics, (2) the environment, and (3) individual cognition.
The environment of organizations consists of interorganizational relations and broader social conditions. Environmental uncertainty is linked to routine nonconformity, as organizations struggle to predict and adapt to unforeseen circumstances.
Power Struggles within Organizations
Power struggles within organizations can lead to co-optation and goal displacement, where outcomes deviate from normative standards or expectations. Power is both a means and an end in organizations' competition for resources.
The Role of Theoretical Frameworks
New Institutionalism and Economic Embeddedness are theories that show how prevailing values and beliefs, as well as social relations and structures in the environment, can lead to suboptimal and unpredictable outcomes within organizations. Aspects of organizational structure, such as complexity, centralization, formalization, and structural secrecy, can contribute to routine nonconformity. The pursuit of trust and control can create opportunities for deceit and misconduct within organizations. Organizational processes, such as informal organization, decision-making, and feedback mechanisms, can lead to unanticipated adverse outcomes. Power struggles, decision traps, and the micropolitics of knowledge are highlighted. Tasks and technology are intertwined. Technology can contribute to negative outcomes and how imperfect knowledge and scientific uncertainty are inherent in technological work.
Routine nonconformity often arises from uncertainty, ambiguity, and the social construction of knowledge; interpretive flexibility, tacit knowledge, and representational technologies play a role here.
Structuration theory and cultural theory are tools to explain how the environment can shape cognitive limits to rationality. The gap between what is known and understood can lead to unanticipated consequences and social reproduction of institutionalized practices.
Cultural knowledge is instrumental in simplifying complexity, narrowing understanding, and potentially leading to unexpected adverse outcomes. Institutionalized cultural beliefs mediate between the environment and individual cognitive processes.
Cognitive Limits to Rationality
Several classic theories reveal cognitive limits to rationality within organizations:
- notions of habit,
- bounded rationality,
- the garbage can model of decision-making, which emphasizes loosely coupled problems and solutions within organizations.
At the micro-level, symbolic interactionism plays a significant role in understanding cognitive processes associated with routine nonconformity, with concepts like impression management (Goffman), deception, framing, and subjective understandings. The social context is an interpretive device and constraint.
Sensemaking theory focuses on how individuals perceive and select objects and activities for sensemaking, leading to potential misperceptions and unanticipated consequences. Meanings are inseparable from social structure and relations, resulting in misunderstandings and incomplete knowledge.
Types of Organizational Deviations
Three distinct types of organizational deviations are mistake, misconduct, and disaster. These types are context-dependent and socially defined based on the norms of specific groups. So defining these types of deviations happen in retrospect, after outcomes are known, and these definitions evolve over time.
Mistakes in Organizations
Mistake in nonroutine work within organizations can result in tangible social harm, such as loss of life, injury, psychological consequences, property damage, or mistreatment by agents of social control. The research often emphasizes typologies and patterns associated with mistakes, exploring how they are produced within the social organization of work. Some research looks into the role of the environment, particularly competition for limited resources, in contributing to mistakes. But these studies often focus on the macro-level aspects of the competitive environment without going into how it impacts individual micro-level actions and decisions. The relationship between organizational structure and mistake is not well-explored, although some research suggests that factors like complexity can lead to mistakes. Studies on the processes of power and hierarchy highlight how hierarchies suppress mistakes and protect individuals and professions within organizations. Ethnographic research examines the role of tasks, task complexity, uncertainty, and risk in generating mistakes.
The historical and temporal aspects of tasks and how they intersect with cognition and choice are still open research questions. Sociological research explores how individuals and professionals neutralize, normalize, and construct accounts for certain types of mistakes within the workplace. It also investigates how social and cultural conditions influence cognition and choice, leading to professional misdiagnoses and errors. Understanding the social origin and form of mistakes is crucial. Sociological theories and concepts remain largely untapped until now and require systematic exploration. Future research possibilities include studying the human-technology interface, the emotional aspects of mistakes, and how individual experiences with mistakes affect subsequent occurrences. The research has been imbalanced, often focusing on high-impact mistakes while neglecting more mundane yet pervasive errors in various organizational contexts.
Misconduct in Organizations
While the sociology of mistake is still in its early stages, misconduct has been extensively studied. There are ongoing conceptual debates about how to define it, leading to various research approaches. Scholars have debated whether to label such behavior as white-collar crime, occupational crime, corporate crime, abuse of power, organizational deviance, or abuse of trust. This diversity of terminology reflects the various conceptual traditions in this field. Despite these debates, there's a growing coherence in research on misconduct within organizations. Many offenses originate within formal, complex organizations. Starting from the 1960s, scholars have combined the sociology of organizations with deviance and social control, emphasizing the organizational locus of wrongdoing. This integration is evident in causal theories, theoretical debates, textbooks, and increasingly sophisticated organizational analysis. Organizational misconduct includes acts, whether by individuals or groups in their organizational roles, that violate internal rules, laws, or administrative regulations on behalf of organizational goals. The extent of harm to the public can vary. Research examines both the regulatory and competitive environments.
Regulatory failures are often organized systematically and can undermine deterrence. Powerful organizations can influence the regulatory environment. In the competitive environment, it's not just economic success that drives misconduct; various organizations compete for scarce resources essential for their survival. Structural, procedural, and task-related aspects of organizations can create opportunities for misconduct. Formal structures can either facilitate or inhibit wrongdoing. Research also delves into how power and hierarchy play roles in this context. Culture within organizations provides normative support for misconduct. Scholars are recognizing the complexity and variation in organizational culture, with various professions, ranks, and informal groups within organizations having conflicting cultures. Recent research explores the impact of technological innovations, like computers and electronic surveillance, on creating new opportunities for misconduct. Finance crimes and technocrime are on the rise due to the transformation of routine tasks by these technologies. Traditionally, misconduct decisions were explained by the amoral calculator hypothesis, where individuals calculate the costs and benefits of wrongdoing. There's growing research exploring the social psychological and organizational aspects of decision-making in misconduct.
Disasters in Organizations
Initially, disaster research focused on the impact of disasters and organizational responses. Later research looked into the social origins of accidents and disasters, locating the causes in power dynamics and structural and cognitive limitations within organizations and technologies. Notable works like Perrow's Normal Accidents and Short's The Social Fabric at Risk reshaped the research agenda in this field. Disaster is a significant departure from normative experience, often causing social loss and damage to the fabric of social life. To encompass both accidents and disasters, organizational-technical systems failures are studied, that are resulting from acts of omission or commission by individuals or groups within organizations, leading to unexpected, adverse, and highly impactful outcomes.
The environment, organization characteristics (structure, processes, and tasks), and cognition play a role in the social origin of accidents and disasters. Political, competitive, regulatory, and cultural environments contribute to disasters. Complexity in organizational structures, conflicts of interest, and power dynamics are factors leading to accidents. Environmental change and high-velocity environments can increase the potential for disasters.
Both rule violations and over-conforming to rules are contributing factors to disasters. Work processes of those involved in risky tasks need to be studied. Cognition, choice, and culture are significant aspects of disaster research. Individuals construct risk and uncertainty and culture influences their choices. Cultural beliefs can promote failures of foresight, and societal and institutional beliefs can affect the interpretation of information before and after disasters.
Researching "The Dark Side"
The dark side of organizations can be researched through an examination of routine nonconformity, mistake, misconduct, and disaster. Behavior is rational within specific situational contexts. Negative consequences in organizations often deviate from formal design goals and normative standards, requiring preventive strategies to go beyond individual actions and consider institutional and organizational factors that shape behavior.
The dark side of organizations should be studied as an integrated field, bridging the gaps between these different types of organizational deviance. This integrated approach involves sharing theories, concepts, and insights across these categories. For example, concepts from misconduct research can be applied to mistake and disaster studies, and vice versa. Theoretical advancements in one area can also provide direction for another. Challenging topics for future research include the study of ethnocognition, the social organization of cleaning up routine nonconformity, the development of understandings about what constitutes deviance, and the conditions under which organizations produce positive or negative outcomes. It’s important to understand the variable relationship between organizational structures and processes and the frequency and probability of unexpected negative outcomes.
Interdisciplinary approaches, drawing from historical sociology, economic sociology, rational choice sociology, and cultural sociology, can provide valuable insights into the dark side of organizations.
Vaughan, D. (1999), The Dark Side of Organizations: Mistake, Misconduct, and Disaster, in: Annual Review of Sociology, Vol. 25 (1999), pp. 271-305.