The Effects of Bureaucratization on Corruption, Deviant and Unethical Behavior in Organizations

By Zimmerman, Jason | Journal of Managerial Issues, Spring 2001 | Go to article overview

The Effects of Bureaucratization on Corruption, Deviant and Unethical Behavior in Organizations


Zimmerman, Jason, Journal of Managerial Issues


Economists have developed a large literature on optimal contracting in a principal-agent setting, illustrating how a labor contract can overcome informational asymmetries. Authors such as Tirole (1986) have expanded upon the standard principal-agent framework to consider the possibility of collusion within firms. For instance, Tirole shows that in a three-tier hierarchy where the principal hires a supervisor to report on the agent, possibilities for corruption exist wherein the supervisor might become an advocate for the agent. The supervisor could be bribed by the agent to provide preferential performance evaluations. Such activity generates a surplus for both the supervisor and the agent at the principal's expense.

Such corrupt and collusive behavior can take many forms. Robinson and Bennett (1995) categorize deviant behavior as, for example, unjustifiably terminating an employee, working unnecessary overtime, accepting kickbacks, and lying about hours worked, and they note that consistent punishment, proportional to the seriousness of the deviant action, is crucial to preventing such behavior and maintaining organizational morale. Kacmar and Carlson (1998) focus on deviant political behavior in organizations. They document employee complaints about preferential promotions, demotions, job assignments, and performance evaluations. Some examples cited specifically portray collusive cliques at work within the firm. For example, one respondent indicated that he was asked by the V.P. of Operations to spy on another department. When he refused, his mail was opened and he was prevented from working with members of that VP's "team." As Kacmar and Carlson note, such collusion creates serious problems for the organization, ranging from inefficient use of resources to lowered morale. Raelin (1986) hypothesizes that such a political environment encourages additional deviant behavior.

Tirole and others such as Holmstrom and Milgrom (1991) and Bac (1996) speculate that bureaucratization and formalization can prevent some types of intrafirm collusion. [1] By restricting the discretion of workers, the firm can reduce the opportunities for and potential gains from corruption. Sundstrom (1988) documents one instance of such behavior by studying the wage-setting policies of an explosives factory in the WWI era. Prior to reform, wages for most workers were set by shop foremen with little or no regulation from central authority. The result was a "foreman's empire" rife with the predictable corruption and kickbacks. Such a system of wage setting would allow a corrupt foreman to sell jobs, reward workers who cooperated in other types of corruption, or simply buy the silence of potential whistle-blowers. Standardization of wages reduced this form of collusion; foremen still made most hiring decisions, but their ability to grant preferential or inflated wages was eliminated. As Tirole (1986) notes, s uch corruption was reduced even further when firms took hiring and promotion responsibilities away from shop foremen and transferred them to a central human resources department.

Similarly, other types of formalization, such as formal labor contracts, job descriptions, written evaluations, or policies and procedures manuals can reduce the autonomy of any particular employee, thereby reducing the opportunities for corruption. According to Demski et al. (1999), such formalization is useful in consulting and law firms, as well as other organizations that deal with confidential information about their clients. In the absence of codified standards, deviant employees might use this proprietary information for their own private ends, but bureaucratization can check this impulse and allow such information to flow safely and efficiently through the firm. Likewise, Miceli (1996) argues that deviant managers often are in a position to reward compliance or punish dissent, and that consistent application of rules within the firm can control these tendencies and deny such managers the opportunity to abuse their authority. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • A full archive of books and articles related to this one
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

The Effects of Bureaucratization on Corruption, Deviant and Unethical Behavior in Organizations
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

    Already a member? Log in now.