Several of the defining characteristics of formal organizations have the potential to contribute to misbehavior. Roles and authority structures define and limit people’s actions in ways that can dramatically increase the likelihood of harmful behaviors because they support rationalizations like “I was just doing my job” or “I was following orders”. Organizations often develop elaborate procedures to monitor and evaluate the behavior of their members, using rewards and sanctions to channel behavior in directions that can be highly destructive. For example, large-scale corporate scandals (e.g., Enron, WorldCom, Volkswagen) require the cooperation of many individuals. As a result, the systems organizations have in place to monitor, reward, and sanction their members can be a significant part of the process that guarantees this cooperation.

Misbehavior in organizations is widespread and the consequences of this misbehavior can be substantial. Work organizations lose billions per year to theft, fraud, and production deviance. Investors have lost hundreds of billions, and tens of thousands have lost jobs because of corporate fraud and white-collar crimes. Workers are exposed to high levels of chronic incivility, bullying, and harassment, all of which have significant costs and all of which have negative effects on the physical and mental health of the targets of and witnesses to these behaviors.

Misbehavior in organizations can be sorted into behaviors directed at the organization (e.g., production and property deviance) and behaviors directed at individuals (e.g., bullying and harassment). Organizationally directed misbehaviors are often the result of the perceived failure of organizations to live up to the terms of its psychological contract with its members (e.g., a fair day’s work for a fair day’s pay). Misbehaviors directed at individuals, on the other hand, often involve efforts to assert power and achieve social dominance. The processes that contribute to both categories of misbehavior and the ways organizations respond to them are explored in detail in several of the remaining chapters.