Enron, WorldCom, and Parmalat have some noteworthy features in common. In most
instances, the fraudulent acts involved knowing cooperation among numerous employees
who were upstanding community members, givers to charity, and caring parents—far
removed from the prototypical image of a criminal. The involvement of such individuals
in corrupt acts, and the persistence of the acts over time, is both disturbing and puzzling.
We argue that the above phenomenon can be explained in part by the rationalization
tactics used by individuals committing unethical or fraudulent acts. Rationalizations are
mental strategies that allow employees (and others around them) to view their corrupt
acts as justified. Employees may collectively use rationalizations to neutralize any regrets
or negative feelings that emanate from their participation in unethical acts. Further,
rationalizations are often accompanied by socialization tactics through which newcomers
entering corrupt units are induced to accept and practice the ongoing unethical acts and
their associated rationalizations. We describe the different forms of rationalization and
socialization tactics and the ways in which firms can prevent or reverse their occurrence
among employees. The onset of these two tactics can establish enduring corruption in
organizations and become institutionalized in seemingly innocuous processes.
……………………………………………………………………………………………………………………………………………………
In the past, fraud was viewed as a rare event
that happened to unlucky organizations. Now
it is commonly accepted that fraud is taking
place at virtually every organization, every
business. The only question is how big it is
and how can we catch it before it gets out of
hand and destroys a company or organization
as it has done with some companies recently,
such as Enron.” (Tony Bishop, President of the
Association of Certified Fraud Examiners)1
If we look within the organization and iden-
tify the individual who seems most closely
connected with the harm—for instance, the
foreman who orders the workers down the
dangerous mine shaft or the corporate execu-
tive who orders the marketing of an unsafe
drug—we do not find an individual whom we
recognize as evil but someone who looks
rather like us.2
The intense focus on corporate corruption started
by Enron and WorldCom has continued with more
recent discoveries of fraud in other organizations
such as Tyco, HealthSouth, and Parmalat. A nota-
ble and disturbing feature of these and many other
corruption cases is that they did not result from the
actions of single individuals; the corrupt acts typ-
ically required knowing cooperation among nu-
merous employees. Employees typically went
along with activities that were obviously unethi-
cal. Most such acts were committed by individuals
who were upstanding members of the community,
caring parents, and givers to charities—clearly
different from the image of a typical criminal. It is
unsettling that such apparently ethical individuals
engaged in patently unethical practices in the
workplace. Equally unsettling is that many of
these practices apparently prevailed for a signifi-
cant duration. New employees—who typically had
no prior history of unethical acts—adopted and
� Academy of Management Executive, 2005, Vol. 19, No. 4 Reprinted from 2004, Vol. 18, No. 3
……………………………………………………………………………………………………………………………………………………
9
continued the prevalent unethical practices, per-
haps despite some initial qualms.
Taken together, rationalizations and
socialization practices allow perpetrators
of unethical activities to believe that
they are moral and ethical individuals,
thereby allowing them to continue
engaging in these practices without
feeling pangs of conscience.
We address the above phenomena in this article.
Drawing on a wide range of literature, we discuss
how employees perpetrating corrupt acts engage
in “rationalizing tactics”—describing their actions
in such a way that they do not appear to be uneth-
ical at all. We describe the different types of ratio-
nalizations that individuals use to neutralize their
negative feelings or regrets about their behavior.
We also discuss how newcomers in unethical or-
ganizations are subjected to specific socialization
processes that lead them to accept the prevalent
activities as normal. Taken together, rationaliza-
tions and socialization practices allow perpetra-
tors of unethical activities to believe that they are
moral and ethical individuals, thereby allowing
them to continue engaging in these practices with-
out feeling pangs of conscience. Figure 1 illus-
trates our model of how rationalization and social-
ization, in conjunction with certain facilitating
factors, allow for the acceptance and perpetuation
of corruption in organizations.
In this article, we use the term corruption loosely
to refer to misuse of an organizational position or
authority for personal or organizational (or sub-
unit) gain, where misuse in turn refers to depar-
tures from accepted societal norms.3 The above
definition allows for the possibility that individu-
als termed “corrupt” by societal standards may
nonetheless see themselves as ethical within the
context of their organization. Indeed, the rational-
izations and socialization tactics described in
this article mediate the tension between societal
norms and corrupt practices, creating a local re-
ality that recasts unethical acts as justifiable if not
laudable.
Rationalizing Corruption
[People who have engaged in corrupt acts]
excuse their actions to themselves, by viewing
their crimes as non-criminal, justified, or part
of a situation which they do not control. (Tony
Bishop, President of the Association of Certi-
fied Fraud Examiners)4
One of the most intriguing findings in the white-
collar crime literature is that corrupt individuals
tend not to view themselves as corrupt. People con-
victed of white-collar crimes tend to acknowledge
their errant behavior but deny criminal intent and
FIGURE 1
Facilitating Rationalization/Socialization in Organizations
10 NovemberAcademy of Management Executive
the label of criminal.5 They avoid the tag of being
corrupt by using a number of rationalizing tactics
that allow them to look at their corrupt acts in a
way that makes them appear to be normal and
acceptable business activities.
Rationalizations often capitalize on the inherent
complexity, ambiguity, and dynamism that per-
vade organizations. Actions that look patently cor-
rupt in the clarity of hindsight may have been
undertaken on the fly, under pressure, and with
incomplete and contradictory information. Further,
initial acts of corruption tend to gain a certain
institutional momentum as the organization comes
to count on the rewards of such acts. With the
decision already made (at least implicitly) to en-
gage in the acts, it may become easier to perpetu-
ate the acts than to stop them—particularly if they
were instigated by others.
As Daniel Chambliss cogently argues, articles
on organizational ethics tend to exaggerate the
amount of discretion that individuals actually
have in organizations to do unalloyed good. In fact,
individuals are often responding in real time to
institutional precedents, routines, pressures, and
dilemmas that allow scant room for reflective
questioning and that require messy trade-offs.6 For
the individual, then, ethical musings may at times
seem like a distant luxury and rationalizations all
too available and tempting. Indeed, given these
constraints, the line between a specious rational-
ization and a justifiable interpretation is often
quite fuzzy. Moreover, what makes rationalizations
chilling is that individuals often convince them-
selves that their rationalizations are in fact quite
justified. Our standard in this article for labeling
something an unjustified rationalization is what
we believe a reasonable, independent person
would conclude about a situation.
Rationalizations can be invoked prospectively
(before the act) to forestall guilt and resistance or
retrospectively (after the act) to ease misgivings
about one’s behavior.7 Once invoked, the rational-
izations not only facilitate future wrongdoing but
dull awareness that the act is in fact wrong. In-
deed, if the rationalizations become a shared re-
source in the organization’s (or industry’s) culture,
they may pave the way toward defining the prac-
tice as “business as usual—the way things work.”
Based on a review of research on corrupt prac-
tices, Ashforth and Anand identified several ratio-
nalization tactics used by employees to justify cor-
rupt practices.8 From their list, we identify six
tactics that we believe are most commonly used in
organizations (see Table 1).
Denial of Responsibility
Denial of responsibility is a rationalizing tactic
where individuals convince themselves that they
are participating in corrupt acts because of circum-
stances—they have no real choice. The circum-
stances may involve a coercive system, dire finan-
cial straits, peer pressure, “everyone does it”
reasoning, and so on. Researchers first used this
term in connection with juvenile delinquents who
saw themselves as “billiard balls” helplessly pro-
Table 1
Rationalizing Corruption
Strategy Description Examples
Denial of responsibility The actors engaged in corrupt behaviors perceive that
they have no other choice than to participate in
such activities.
“What can I do? My arm is being twisted.”
“It is none of my business what the
corporation does in overseas bribery.”
Denial of injury The actors are convinced that no one is harmed by
their actions; hence the actions are not really
corrupt.
“No one was really harmed.”
“It could have been worse.”
Denial of victim The actors counter any blame for their actions by
arguing that the violated party deserved whatever
happened.
“They deserved it.”
“They chose to participate.”
Social weighting The actors assume two practices that moderate the
salience of corrupt behaviors: 1. Condemn the
condemner, 2. Selective social comparison.
“You have no right to criticize us.”
“Others are worse than we are.”
Appeal to higher loyalties The actors argue that their violation of norms is due
to their attempt to realize a higher-order value.
“We answered to a more important cause.”
“I would not report it because of my loyalty
to my boss.”
Metaphor of the ledger The actors rationalize that they are entitled to indulge
in deviant behaviors because of their accrued
credits (time and effort) in their jobs.
“We’ve earned the right.”
“It’s all right for me to use the Internet for
personal reasons at work. After all I do
work overtime.”
2005 11Anand, Ashforth, and Joshi
pelled into deviance by their circumstances.9
When using this rationale, individuals do not re-
gard themselves as perpetrators of unethical acts;
rather they view themselves as morally responsi-
ble individuals being forced into unethical acts.
For instance, Fortune recently reviewed the ac-
counting frauds committed at Qwest. Several man-
agers who participated in fraudulent deals justi-
fied their actions by claiming helplessness. An
unnamed manager was quoted as saying: “What
can I do? My arm is being twisted. I just gotta do
what the boss says.”10
Clearly, denial of responsibility is a rationaliza-
tion that is rather easily adopted when experienc-
ing intense pressure from top management to meet
numeric targets.11 Consider the following state-
ment regarding accounting fraud at H. J. Heinz in
the 1970s:
To hear some middle managers there tell it,
the ‘pressure-cooker’ atmosphere at Pitts-
burgh’s H.J. Heinz Co. wasn’t confined to the
concern’s steamy food-processing plants.
‘When we didn’t meet our growth targets, the
top brass really came down on us,’ recalls a
former marketing official at the company’s
huge Heinz U.S.A. division. ‘And everybody
knew that if you missed the targets enough,
you were out on your ear.’ In this environment,
some harried managers apparently resorted
to deceptive bookkeeping when they couldn’t
otherwise meet profit goals set by the compa-
ny’s top executives.12
Under such circumstances, managers often see
themselves as being forced into corruption be-
cause of intense pressure from their superiors.
Denial of Injury
In this rationalizing tactic, employees convince
themselves that no one is really harmed by their
actions and therefore their actions are not really
corrupt. This rationalization is commonly em-
ployed in situations such as theft from an organi-
zation where the organization is assumed to be
well insured or can easily recover the costs, or
where the actual damage is slight. For example, in
a study of ongoing pilferage at an electronics fac-
tory, workers felt little guilt because no harm ap-
peared to be done. As one worker put it:
It’s a corporation . . . It’s not like taking from
one person . . . the people justify it that the
corporation wouldn’t be hurt by it . . . they just
jack the price up and screw the customer.
They’re not losing anything. The Company
told us that last year they lost $30,000 . . . but
that was for losses of all types. It gives them a
nice big tax write-off. I’ll bet you a goddamn
day’s pay that they jack that . . . write-off way
up too.13
Similarly, an Arthur Andersen consultant sup-
pressed her doubts about excessive billing of cli-
ents by rationalizing as follows:
. . . the client [a bank that had been required
by regulators to use this specific consulting
service] was desperate. So we billed our
brains out, charging more than one million for
what should have been about a $500,000 job.
We billed time on the subway, we billed time
rewriting notes . . . I rationalized what we
were doing by telling myself that they were
paying a premium for the short time frame
and intensity of the work . . . .14
A variant of the denial-of-injury tactic occurs
when a given act is rendered less offensive by
comparing it to more extreme forms. For instance,
a manager involved in price fixing rationalized
that since he was not making any personal profit
or significantly harming the customer, and that he
was just involved in correcting an adverse price
situation, he was not really doing anything
wrong.15 Thus, his acts were not really wrong be-
cause they could have been far worse had he been
so inclined.
Denial of Victim
In this form of rationalization, employees define
the victim of their unethical behavior as someone
deserving to be victimized. This can be done in
several ways. A very common tactic is to convince
oneself that targets deserved their fate due, for
example, to past unfairness or corruption on their
part.16 Exploitation of the victim is thus seen as a
form of revenge and the perpetrator as a modern
day Robin Hood. One study found that the most
common explanation offered by employees for
theft of company property was unfair treatment by
the employer,17 and another study found that cor-
porations may nurse grievances against the U.S.
Internal Revenue Service to justify tax evasion.18
Although some victims may indeed contribute
to—or “deserve”—their fate, it is important to note
that denial of the victim need not be based in
reality. A recent study showed that when individ-
uals were given an incentive to lie in a negotiation
experiment, they expected their opponents also to
12 NovemberAcademy of Management Executive
lie.19 Once individuals start believing that the vic-
tim is deceitful, they are likely to feel less regret
about their own unethical actions. This could be a
double whammy for an organization whose em-
ployees are engaging in corrupt acts such as pil-
ferage: in addition to the physical loss, the employ-
ees might develop antagonistic attitudes toward
the organization to minimize their unease about
their own actions.
A variant of the denial-of-the-victim tactic occurs
when the victim is depersonalized, that is, con-
verted into a faceless statistic or, in extreme cases,
to subhuman status.20 By doing so, employees can
place significant “psychological distance” be-
tween themselves and their victims, making it eas-
ier to deny the impact of their unethical actions on
the victims.21 The classic corporate example is the
Ford Pinto saga. Ford had discovered a design
defect that often caused the car’s gas tank to ex-
plode in rear-end col
lisions. Ford performed a cost-
benefit analysis in which the forecasted 180 deaths
were converted into dollars ($200,000 each).22 Thus,
the decision was no longer about human life; it
was an economic choice between the cost of a
recall versus the cost of foregoing a recall. Ulti-
mately, hundreds died or suffered severe burns.
Depersonalization is also evident in accounts of
Wall Street traders who viewed clients not as
unique individuals but as suckers asking to be
conned.23
Social Weighting
Social weighting can occur in two ways.24 In the
first form, termed condemning the condemners,25
the legitimacy of the actor/entity who labels em-
ployee acts as unethical is questioned. If the legit-
imacy of actors/entities is questionable, then so too
is their argument. For instance, individuals may
characterize the law as vague, complex, inconsis-
tent, rarely enforced, punitive, or politically moti-
vated such that enforcement is capricious or mali-
cious.26 Since the law itself is wrong, it is not
unethical to contravene it.
A second form of social weighting is selective
social comparisons, analogous to the second form
of denial of injury (i.e., extreme comparisons).
When individuals are confronted with negative im-
pressions about themselves, comparisons with
others who appear even worse serve to bolster
them against the threat.27 Because corrupt acts can
make individuals appear bad, they are motivated
to find examples of others who are even more cor-
rupt and thereby demonstrate that “we’re not so
bad.” In an article about how longshoremen collec-
tively engage in pilferage, one commented on an-
other: “He’d take anything—he’s even taken bag-
gage—he’s nothing more than a thief.”28 In the face
of a “real” thief, the commentator’s own thievery
seemed minor.
Because corrupt acts can make
individuals appear bad, they are
motivated to find examples of others who
are even more corrupt and thereby
demonstrate that “we’re not so bad.”
Appeal to Higher Loyalties
When using this form of rationalization, employees
argue that some ethical norms need to be breached
to fulfill more important goals. Unlike the other
rationalizations, this form may go beyond neutral-
izing the negativity of corruption to actually valu-
ing it. The most common higher cause appears to
be group-based loyalties. When a group becomes
highly cohesive, employees often believe that the
goals of the group are more important than those of
other groups or society. For instance, one study
found that many police officers, when forced to
choose between testifying against a colleague and
committing perjury, usually choose the latter and
experience remarkably little conflict in doing so.29
This is because they value loyalty to colleagues
above loyalty to the justice system.
A less commonly invoked higher loyalty is, iron-
ically, to moral principles. A group may act counter
to universal ethical norms if they regard those
norms as an obstacle to particular principles or
goals. For instance, another study documented the
“normal lies” told by police officers in court to per-
suade judges to convict defendants that the officers
believe are guilty: the ends justify the means.30
Balancing the Ledger
A sixth type of rationalization occurs when individ-
uals believe that good works (whether actual or
anticipated) have earned a credit that can be used
to offset corrupt acts.31 For instance, a recent study
found that individuals engaging in cyber-loafing
felt no guilt pangs because they thought that they
had accrued sufficient credit in the organization
through the time and effort they had put into com-
pleting their work. As one cyber-loafer put it: “It’s
all right for me to use the Internet for personal
reasons at work. After all, I do work overtime with-
out receiving extra pay from my employer.”32
A common variant of this form of rationalization
is when employees bask in the past glory of an
2005 13Anand, Ashforth, and Joshi
organization to justify current unethical behavior.
For instance, in her book Final Accounting, Bar-
bara Toffler describes how Arthur Andersen em-
ployees billed clients excessively as a matter of
routine. When she queried a partner who had over-
billed a client, she was told: “Relax. We’re Arthur
Andersen. They need us. They’ll pay.” As Toffler
pointed out, “The prestigious name was being used
to justify behavior that never would have been toler-
ated in the past.”33 Ethics and laws were for lesser
firms; Arthur Andersen was above the law.
The tactics described above are instrumental
in aiding individuals to commit corrupt acts
while maintaining belief in their personal moral
integrity. However, it should be noted that ratio-
nalization tactics in themselves are often useful
to the organization. Executives operating in tur-
bulent 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 manufac-
turing sites overseas for efficiency reasons often
need to use rationalization processes (e.g., de-
nial of responsibility) to help them cope with the
undesirable and visible consequences of their
actions. Individuals involved in “dirty work”
such as grave digging, trash removal, and so on
consistently use rationalizations to maintain a
positive self-image (e.g., social weighting).34
Hence, in many cases rationalization tactics are
essential for organizations and employees to op-
erate. Our point is that these tactics are simply a
tool, one that also can be used to excuse patently
unethical practices, resulting in disastrous con-
sequences for society—and, eventually, the orga-
nization itself.
Socializing Newcomers into Corrupt Practices
In any organization or subunit, corruption can con-
tinue only if newcomers also start exhibiting the
behaviors. When newcomers are first exposed to
ongoing unethical practices, they often experience
significant dissonance and apprehension. Individ-
uals may be so uncomfortable that they leave the
organization. Ironically, this helps perpetuate the
corruption by weeding out those who are most
averse to it. However, researchers examining cor-
ruption in organizations have found that there ex-
ist potent socialization tactics by which newcom-
ers are induced to accept corrupt practices. This is
often done in conjunction with the rationalizing
tactics. Based on a review of white-collar crime in
the past century, Ashforth and Anand identified
three such processes: (1) cooptation, (2) incremen-
talism, and (3) compromise.35
Co-optation
In co-optation, rewards are used to induce attitude
change toward unethical behaviors. Numerous ex-
amples exist, such as financial brokers who push
offerings with high commissions, contract re-
searchers who spin their findings to support their
sponsor’s preferences, and public officials in reg-
ulatory agencies who take pro-industry stands in
the hope of getting jobs in industry. An interesting
example of co-optation is provided in the book
Power Failure, which describes how executives at
Merrill Lynch (ML) were co-opted in Enron’s efforts
to cook the books:
Faced with an earning’s crisis in 1999, an En-
ron finance executive came up with an irreg-
ular solution. He approached Merrill Lynch
and suggested that they purchase three Enron
barges containing electricity generators that
were floating off the coast of Nigeria. Enron
would book the sale in that year’s accounts
and subsequently buy the barges back and
sell them to a real seller. There was intense
debate in ML, with one executive pointing out
that by doing this ML would be abetting En-
ron’s “income statement manipulation.” But
the fact that Enron was a large customer with
the prospect of large fees appeared to color
the judgments of Merrill executives. In an in-
ter-office memo, one of Merrill’s top bankers
argued that: “Enron is a top client to Merrill
Lynch. Enron views the ability to participate
in transactions like this as a way to differen-
tiate ML from the pack and add significant
value. I completed several financings like
this . . . and they all worked out . . . ” Ulti-
mately, ML formed a company called Ebarge
and entered the deal.36
ML’s executives were aware that what they were
doing was not completely ethical. However, the
prospect of a closer relationship with Enron (and
thus the possibility of higher fees) appears to
have softened their stance toward the corrupt
action.
Corruption via co-optation is often subtle be-
cause the individuals themselves may not realize
how the rewards have induced them to resolve the
ambiguity that often pervades business issues in a
manner that suits their self-interest. Bargh and
Alvarez37 describe how power tends to noncon-
sciously activate personal goals and biases, guid-
ing information processing and behavior—which
the individual then rationalizes in socially desir-
able terms. Thus, a broker may honestly conclude
14 NovemberAcademy of Management Executive
that the offerings he is rewarded for pushing are in
fact the best investments—indeed, the broker is
likely to perceive herself as a victim when the
practice is exposed.
Incrementalism
In this form of socialization, newcomers are grad-
ually introduced to corrupt acts.38 Initially, the
newcomers are induced to perform an act that is
only slightly deviant. This act, although small, cre-
ates some cognitive dissonance. To relieve the dis-
sonance, the newcomer grasps at ready rational-
izations offered by peers. As the individual comes
to accept the act as normal, he or she is introduced
to another, more corrupt act, with its attendant
rationalizations. In this way, the individual climbs
the ladder of corruption and is eventually engag-
ing in acts that he or she would previously have
rejected outright.
For instance, Gerald Mars39 studied unethical
practices prevalent among the sales staff of spe-
cialty copiers:
The copier manufacturer had announced dis-
counts as high as 50 per cent and asked their
sales staff to pass on the savings to their cus-
tomers. However, rather than pass on the dis-
counts, the staff approached potential custom-
ers with the original price list. The customers
were informed that lower prices could be ob-
tained if the salesperson negotiated with the
manufacturer but that the process would lose
them [the sales staff] their commissions.
Hence, the low prices were available if cus-
tomers were willing to reimburse sales staff
by issuing them compensatory checks. The
customers, happy to get the “low” price, paid
the commissions to the sales staff. There also
existed an elaborate socialization process to
introduce new sales personnel into the corrupt
system: “On regular rounds with myriad cus-
tomers, suggestions about adding a penny on
here and there and advice on who to ‘watch
out for’ . . . are made jokingly, as if only half-
meant. At this stage they are only half-meant;
if the trainee objects to these suggestions,
they can always be withdrawn and no harm is
done.” The newcomers began hesitantly and
in a small way but over time became part of
the system.
Compromise
In the third avenue to corruption, compromise,
individuals essentially “back into” corruption
through attempts (often in good faith) to resolve
pressing dilemmas, role conflicts, and other intrac-
table problems. For instance, politicians accrue
power by forming networks, currying favors, and
cutting deals, often causing them to support ac-
tions and causes they would otherwise avoid.40 It
thus becomes very difficult for senior politicians to
act exclusively according to their own ethical prin-
ciples and preferences.
An interesting example of compromise is pro-
vided by Farberman in his study of used car deal-
ers in the 1970s:
Used car dealers typically purchased their in-
ventory from the trade-ins received by dealers
of new cars. There was a shortage of these
used cars, with the best being reserved for
sale in the new car dealership itself. Manag-
ers in new car dealerships, responsible for
distributing trade-ins to used car dealers, of-
ten took bribes to make good-quality cars
available to used car dealers. The used car
dealers were caught in a bind: they could
either avoid paying the bribes and sell lem-
ons to customers, or they could pay the bribes
and get good cars. Ultimately, several used
car dealers compromised and chose to pay the
bribes. In order to have cash to pay these
bribes, they often had to engage in short
sales—a system where, for instance, a $2,000
car was sold to a customer officially for $1,500.
Five hundred dollars was paid as cash—sav-
ing the customer tax on the $500 and provid-
ing the dealer with cash to bribe managers in
new car dealerships.41
The three forms of socialization are not mutu-
ally exclusive: they may exist simultaneously
and frequently reinforce each other. For in-
stance, the first incremental steps into corruption
are hastened if rewards exist to co-opt individu-
als into the process. Co-optation is much easier if
the individuals, at least initially, take baby steps
into the realm of corruption. And finally, when
individuals are forced into compromise situa-
tions, the rewards associated with an unethical
course of action may induce them to choose it
over the other. A common theme of all three
paths to corruption is perceived choice: newcom-
ers are far more likely to accept corrupt acts as
justifiable if not desirable if the newcomers per-
ceive that they chose their course of action. The
most insidious of socialization practices are
therefore those that provide only an illusion of
choice, subtly inducing behavior that the new-
comer would have otherwise avoided.
2005 15Anand, Ashforth, and Joshi
As with rationalization, socialization is an inte-
gral and often beneficial organizational process.
Newcomers learn about an organization’s culture
and ethical norms and obtain operational knowl-
edge through a variety of socialization processes
in the organization.42 However, just as rationaliza-
tion is a tool, so too is socialization, one that can be
instrumental in perpetuating unethical behavior.
Thus, while organizations need to ensure that they
have effective socialization tactics, they also need
to be conscious of how socialization can be used to
perpetuate undesirable practices.
The Facilitation of Rationalization and
Socialization
As we pointed out, rationalization and socializa-
tion are key processes that abet the infiltration and
sustenance of corruption in organizations. They
often act subtly, convincing corrupted individuals
that they do in fact have integrity and converting
newcomers into adherents of the deviant system.
While the two processes can exist to some extent
without any support from the organization’s envi-
ronment, certain factors therein can significantly
enhance the likelihood of the two processes emerg-
ing. Three factors depicted in Figure 1 that we
believe are especially important are described
below.
Group Attractiveness and a Social Cocoon
In many instances, corruption is widespread
among the employees in a subunit rather than
being limited to one or two individuals.43 Re-
searchers have pointed out that this is often facil-
itated by group dynamics working in tandem with
rationalizing and socializing practices to create a
“social cocoon.”44 A social cocoon is a micro culture
created within a group where the norms may be
very different from those valued by society or even
the wider organization. Social cocoons emerge
when groups develop idiosyncratic solutions to the
problems they face and actively seek to compart-
mentalize themselves from external influences.
When membership in a group is highly prized,
employees are more likely to accept and adopt the
norms of the group. For example, Toffler points
out why newcomers were unlikely to challenge
the ethical lapses they encountered at Arthur
Andersen. New recruits were socialized to believe
that membership was exclusive and that they were
therefore special.
Arthur Andersen offered something special: a
way of life . . . getting a job there meant mak-
ing it. They all knew that their chances of
making partner were slim, and that they were
in for a rigorous, exhausting few years as the
grunts. But there was that big fat brass ring at
the end.45
Thus, new recruits were unlikely to raise any
sticky questions that could deprive them of their
chance at the brass ring.
We are not suggesting that creating exclusive
conditions such as those at Arthur Andersen
should be avoided. Indeed, such practices may