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Tuesday, 19 July 2011

Euphemisms for Morally Disengaged Managers

Presentation, Not Content

Presentation is at least as important as content and don’t let anyone tell you otherwise: words matter, deeply and importantly. Just not in a very nice way.

Whatever we do we accompany with a logic of self-justification which is frequently built on an architecture of euphemisms designed to support such behaviour, no matter how immoral and unethical it might be. This is part of a psychological process known as moral disengagement, and is key to understanding why corporations go bad and their managers believe they’ve done nothing wrong.

Fired

As we’ve previously seen the fundamental attribution error is endemic in human life: when we make money it’s skill and when we lose it, it’s bad luck. Governments take credit for the good times and disclaim all responsibility for the bad. Chief Executives are masters of the universe when their massive and decentralised self-replicating corporations are doing well and permanently surprised when stuff goes wrong.

Euphemisms are one way of doing this: by framing things using euphemistic language we can make the unacceptable more palatable and less difficult to handle. Take the obvious example of losing your job. It’s a simple enough process, you’d have thought, if not especially pleasant.

But we can’t simply be told this in a straightforward and honest fashion: we have to be let go, to be given new career opportunities, to find that we’ve been reorganised, displaced, suffered career upgrading, right-sized – sometimes we’re especially lucky and are dynamically right-sized. At other times we’re redeployed, subjected to transitioning or, surprisingly, have discovered that we’re not strategic. At others we’ve been restructured (painful), re-engineered (ditto), employment challenged and offered the opportunity to spend more time with our families as part of a reduction in force. These are alternative career enhancements where we find we’re going in different directions, have been freed up for the future and have had our positions optimised.

Poop.

Plausible Deniability

All this is done by a “human resources” group who have apparently exterminated the old personnel department, presumably a case of collateral damage – or perhaps it was down to friendly fire. Inevitably, the employer has no choice in this matter, it’s not really their fault, they don’t really want to do it, but it’s out of their hands. It’s the law of the markets.

And, of course, in a sense it is out of their hands, it’s the iron hand of the markets demanding that corporations become more efficient and more effective – or at least more profitable for the next quarter. However, the use of euphemisms in this context is about making the job of firing someone more palatable for the person doing it, to allow them to disassociate themselves from the act itself, to make it more possible for them to relieve themselves of any moral responsibility.

Moral Disengagement

This process is, in a very minor way, the same one as is used by perpetrators of far more unpleasant behaviours than corporations reducing their staff count. Politicians misspeak and are economical with the truth – they lie. Nuclear reactors occasionally suffer energetic disassemblies – they explode. Arms dealers trade in “consumer needs” – i.e. they sell guns to any genocidal mass murderer who has enough money.

This is all part of what Albert Bandura calls the process of moral disengagement by which people stand back from the consequences of their actions. As he has shown, this is achieved by many means – of which the framing of situations through the use of euphemisms is only one – and not necessarily the worst by a long way. However, it’s a key element in the psychological process of moral disengagement where we find various methods of blaming others for the things that go wrong.

Corrupt Corporates

Bandura points out, that there are far worse things caused by this than corporate fraud, but it certainly seems to be a major contributor to the process. As Anand, Ashforth and Joshi suggest in Business as Usual: The acceptance and perpetuation of corruption in organizations:
“One of the most intriguing findings in the white-collar crime literature is that corrupt individuals tend not to view themselves as corrupt. People convicted of white-collar crimes tend to acknowledge their errant behavior but deny criminal intent and the label of criminal”.
The methods of moral disengagement used are multifarious: rationalizing that they have no real choice, arguing that no one was harmed by their actions, redefining their victims as deserving their fates, arguing that ends justify means and so on. As the researchers point out:
“Executives operating in turbulent environments need to make hard choices that often have undesirable consequences. For example, managers laying off close associates to ensure firm survival or relocating local manufacturing sites overseas for efficiency reasons often have to use rationalization processes (e.g. denial of responsibility) to help them cope with the undesirable and visible consequences of their actions”.
Self-Righteous Criminals

Quite so. In fact the list of rationalizations is remarkable long and, in many cases, uncomfortably familiar. These are actions that, all too easily, end up ingrained in the operating processes of corporations without employees even being aware of them.

This has far, far more dangerous consequences than dumb investors blaming other people for their dumb decisions. At the limit it allows us to disclaim responsibility for our actions, no matter how horrendous. As Bandura states:
“Self-exoneration is also achievable by viewing one’s harmful conduct as forced by compelling circumstances rather than as a personal decision. By fixing the blame on others or on circumstances, not only are one’s own injurious actions excusable but one can even feel self-righteous in the process”.
Milgram on Obediance

As we've seen before the classic psychological study of this behaviour was conducted by Stanley Milgram, as described in this paper on corporate governance by Robert Morck. Milgram's experiment is justly famous, because it showed how a participant could be persuaded to apply violent electric shocks to an innocent subject (actually an actor) simply because an authoritative researcher told them to.

In fact the only way Milgram found of stopping this was to introduce a second researcher who dissented with the instructions. As soon as dissent amongst authority figures occurred the participant stopped applying the shocks. This complete cut-off is almost as shocking as the experiment which, incidentally, wouldn't be allowed today.

Yet, as Morck describes, moral disengagement and obedience to authority seems to extend to company boards as well: misplaced loyalty to CEO’s lies behind many corporate scandals:
"The directors of Encron, WorldCom, Hollinger, Parmalat, and all the other companies currently embroiled in scandal attended regular meetings to favorably assess the performance of their CEOs. Despite increasing attention being drawn to their legal and ethical responsibilities, directors seem paralysed in the presence of powerful CEO's".
Lessons from the Top

The lesson here is key: authority figures can’t simply disclaim responsibility for what happens on their watch unless they have repeatedly, clearly and unblinkingly made it clear what ethical and moral standards they expect of their followers. This is as true for company executives as it is for leaders in other fields. As Anand, Ashforth and Joshi state:
“Clearly, rationalizing and socialization are facilitated if top management is perceived as being unethical. Rationalization tactics receive a tremendous boost if they are also being used by top management. It is not sufficient that top management be ethical: they should be seen to be ethical”.
A failure to institute proper checks and balances around CEOs means the ever present danger of other board members defaulting to a mode of automated deferral to authority. Unquestioning obedience to authority allows for moral disengagement and moral disengagement opens the door to far worse horrors than corporate fraud:
"The Law, government, and academia all developed institutions to check excessively zealous obedience to authority. This took centuries, even millennia, and still we have an occasional Guantanamo Bay established in the name of patriotism, an occasional Robert Mugabe running an economy into the ground amid cheering sycophants, and an occasional bogus stem cell paper by an eminent scientific authority".
At least, as investors, the worst we're likely to suffer is a nasty portfolio malfunction.


Related articles:

Related books:


Obedience to Authority: An Experimental View (Perennial Classics)The Man Who Shocked The World: The Life and Legacy of Stanley Milgram Conspiracy of Fools: A True Story

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