Information misbehavior: How organizations use information to deceive (original) (raw)

Harming by Deceit: Epistemic Malevolence and Organizational Wrongdoing

Journal of Business Ethics, 2023

Research on organizational epistemic vice alleges that some organizations are epistemically malevolent, i.e. they habitually harm others by deceiving them. Yet, there is a lack of empirical research on epistemic malevolence. We connect the discussion of epistemic malevolence to the empirical literature on organizational deception. The existing empirical literature does not pay sufficient attention to the impact of an organization's ability to control compromising information on its deception strategy. We address this gap by studying eighty high-penalty corporate misconduct cases between 2000 and 2020 in the United States. We find that organizations use two different strategies to deceive: Organizations 'sow doubt' when they contest information about them or their impacts that others have access to. By contrast, organizations 'exploit trust' when they deceive others by obfuscating, concealing, or falsifying information that they themselves control. While previous research has focused on cases of 'sowing doubt', we find that organizations 'exploit trust' in the majority of cases that we studied. This has important policy implications because the strategy of 'exploiting trust' calls for a different response from regulators and organizations than the strategy of 'sowing doubt'.

The Escalation of Deception in Organizations

Journal of Business Ethics, 2007

We develop a process model that explains the escalation of deception in corrupt organizations. If undetected, an initial lie can begin a process whereby the ease, severity and pervasiveness of deception increases overtime so that it eventually becomes an organization level phenomenon. We propose that organizational complexity has an amplifying effect. A feedback loop between organization level deception and each of the escalation stages positively reinforces the process.

The Psychology of Corporate Dishonesty

Despite the large amount of literature that has been written over the last 30 years on the regulation of corporate misconduct, relatively little attention has been addressed to developing a detailed understanding of the human element of corporate dishonesty. Corporations are not by themselves dishonest. Their dishonesty comes from the decisions and actions of individuals within the organization. Yet, important questions on what affects individuals in their decision-making on dishonesty have received limited scholarly attention. This article assists in addressing this gap by developing a psychologically informed perspective on the problem of corporate dishonesty. Drawing on a range of literature from cognitive and organizational psychology, it argues that we need to understand well behaviors that we seek to regulate well. All regulation rests on assumptions and predictions about human behavior. If we do not accurately recognize the factors that affect decision-making on corporate dis...

We’re leaking, and everything’s fine: How and why companies deliberately leak secrets

Although the protection of secrets is often vital to the survival of organizations, at other times organizations can benefit by deliberately leaking secrets to outsiders. We explore how and why this is the case. We identify two dimensions of leaks: (1) whether the information in the leak is factual or concocted and (2) whether leaks are conducted overtly or covertly. Using these two dimensions, we identify four types of leaks: informing, dissembling, misdirecting, and provoking. We also provide a framework to help managers decide whether or not they should leak secrets.

Secrecy, silence, and corporate crime reforms

Criminology & Public Policy, 2010

H enk van de Bunt (2010, this issue) explores how both secrecy and silence are artifacts and explanations of some of the most notable corporate fraud in recent years. Two iconic cases are offered that point to a variety of individual-and firm-level factors that contribute to corporate deviance (e.g., employee inaction, deliberate indifference, and an unwillingness to hear or disclosure the truth). The solution to the successful concealment of illegal activities, we are told, is to focus on more than just failed supervision or the need for more and better regulation. 1 Instead, frauds of this kind must be countered by encouraging inquisitiveness and promoting disclosure in ways that defeat the deadening silence and inaction of employees and other insiders. van de Bunt's (2010) argument is undervalued or overlooked too often in extant accounts of large corporate frauds where the default reaction is to suggest new legislation and regulation (see, e.g., Markham, 2006). To van de Bunt's credit, focusing on the harm that comes from secrecy and silence inside and outside the firm encourages something more than the uncritical acceptance that failed supervision, incompetent gate-keeping, and inadequate or poorly enforced regulations combine to explain all corporate deviance (cf. Coffee, 2006). And van de Bunt's argument resonates well with anecdotes of firms that are characteristically opaque and with corporate cultures that inhibit dissent, free communication of allegations of wrongdoing, active whistle-blowing, cooperation with law enforcement, and acknowledgment of wrongdoing (Miceli and Near, 1992). It also connects with accounts of firms that, on the surface, seem compliant but actually are not. Here, the failure may be one of governance, where there is insufficient oversight by the board of directors of the compliance function carried out by senior management (Laufer, 2006).