The process of counteracting corruption and reducing misbehavior sometimes requires systematic efforts to reform and improve organizations. Organizations typically pursue one of two broad strategies. The most common response, to make structural changes (e.g., new codes of conduct, changes in policies and practices, external oversight), rarely succeeds, especially when the norms of the organization continue to support or tolerate misbehavior. The other option is to change the behavior of members of the organization. If the problem is limited to top leadership, a change of leaders can be effective. In most cases, however, it is necessary to try and change the norms, standards, values, and beliefs of organization members. Top-down changes can be effective, particularly when top leaders actively model the desired norms and behaviors, but resistance to top-down change can be significant, especially if deviant norms are well established in an organization. Some organizations undertake broad-based organizational development (OD) efforts, but again, the success of this approach depends substantially on the willingness of members across the organization to change.
Recovery from corruption is challenging, but there are definite sets of actions organizations can take to increase the likelihood of success. These include disclosure, apology, and restitution. Careful efforts to redefine roles in organizations to include systematic consideration of the ethical dimensions involved when making decisions in organizations also have the potential to pay off. The OD process of unfreezing, changing and refreezing might be especially useful in making these changes.
Finally, this chapter considers the question of defining the purpose and responsibilities of organizations in the modern world. Avoiding corruption and misbehavior are good, but they are probably not sufficient. The corporate social responsibility (CSR) movement suggests that organizations have affirmative responsibilities to many stakeholders. At a minimum, corporations have responsibilities to their owners and stockholders, to the people who work for the organization, to their families, and to the communities and the environment within which they operate. Virtually all large organizations engage in some activities that go beyond the bottom line to focus on improving communities and the environment. The effects of these activities are sometimes hard to evaluate, but on the whole it seems reasonable to believe that both organizations and their many stakeholders have at least a reasonable chance to benefit from organizations’ commitment to CSR.