Ananya Pillarisetty (22010443)

Suryanshi Singh (22010397)

Varun Karthik A. (22010479)

The Psycho-Sociology of Corporate Deviance: A Legal Psychology Perspective

Workplace Deviant Behaviour 4 P's (Ishak, 2006)

ABSTRACT

Organizational deviance refers to certain behaviours or actions by members of an organization

which violate established norms, principles, or rules within said organization. These may range
from petty infractions to severe misconduct and occur at various levels within the organization,
from individual employees to teams or even entire departments.
This paper aims to delve into the psychological and sociological motives and implications of
organizational deviance and to assess the material available for studying the same. For
specificity, we will be focusing on organizational deviance within corporate structures since
most of the existing research on the topic majorly focuses only on factory-level deviance.

To enable a multi-disciplinary approach to our study and offer a multifaceted understanding of

the topic, weaving it within the scope of the course on Legal Psychology, we will be looking
lastly at the correctional mechanisms dealing with corporate deviance and assessing whether
they are adequately informed by and considerate of the psycho-social underpinnings of what
they are dealing with.

Ultimately, the paper aims to answer the following questions:

1. How does Corporate Deviance differ from other forms of organizational deviance?
2. What psychological and sociological factors inform and affect such deviance in its
occurring?
3. In what manner can these findings inform correctional mechanisms addressing
organizational deviance, i.e., is it at all feasible or desirable to incorporate them for
moulding the control procedures?

LITERATURE REVIEW

Examining the psychological underpinnings of organizational deviance falls under the

umbrella of “Psychology of Law” which Andreas Kapardis describes as psycholegal research
into specific issues, for example, why people obey/disobey laws, and public perceptions
towards penal sanctions (Kapardis, 2010).

The available literature on organizational deviance mainly focuses on workplace misconduct

by factory-level employees and the management’s top-down approach to dealing with them.
Most of the material is highly nuanced, delving very deeply into very specific factors affecting
misbehaviour in workers. There also appears to be considerable research on how organizational
deviance varies across different levels of organization.
In the case of organizational deviance in corporate structures, there appears to be little to no
material available, and even within that, most publications focus on White-Collar crimes and
completely disregard the multitude of other aspects/occurrences.

METHODOLOGY

The method of research used for the current study is a mixed methods approach combining
data analysis and archival study, since the paper is written for collegiate purposes, and within
a university space, control group assignments are not feasible/desirable.

However, the authors of this paper are of the opinion that in the field of legal psychology,
especially if the research aims to find areas or concerns where psychological findings can be
applied to better inform or mould the law, control group experiments or surveys are of little
use, since the specimen, in such experiments, would be randomly selected individuals. Such a
study would be beneficial if the study is purely dealing with the subject of psychology, and
hence understanding a givenhuman mind would provide valuable information.

On the other hand, if the researcher wants to, for example, look at the effect of psycho-social
stimuli affecting jury decisions, studying and analysing previously delivered jury verdicts and
the proceedings leading to them, or approaching former jury members for interviews, should
be the only kind of methods considered as it is near impossible to re-create the veracity and
emotions involved in a criminal proceeding, say, for example, of a child rape and murder case,
in a control group setting. Hence, the results of such experiments attempting to mock the real
incidents are bound to be grossly inaccurate due to the vast but inevitable limitations.

Therefore, the current paper focuses on academic research articles and the published statistics
on organizational deviance, the former ranging from general baseline material to focused
perspectives on particular aspects of said deviance, and the latter mostly relating to the
correctional mechanisms for such misconduct. We will attempt to delve deep into corporate
organizational deviance, the sociological underpinnings and whether and how societal status,
generational wealth, and other social indicators correlate with the occurrence of such
behaviour.

ANALYSIS AND ARGUMENTATION

Relevance of Psychology

Psychology tends to play a significant role in understanding organizational deviance within the
context of legality. Legal sanctions are mechanisms imposed by the legal system to deter and
punish deviant behaviours. This integration of psychology in law, as above-mentioned, is
essential for effective management and prevention of organizational deviance.

Firstly, a psychological perspective can provide insights into the individual and group
dynamics underlying deviant behaviour within organizations. By analyzing personality traits,
motivations, attitudes, and social influences, et. al. psychologists can identify the root causes
of deviance. For example, research has shown that certain personality traits, like narcissism or
Machiavellianism, may predispose individuals to engage in unethical conduct (Jones &
Paulhus, 2014). Understanding psychological mechanisms enables policymakers and legal
practitioners to develop focused interventions for mitigating organizational deviance.

Moreover, psychology can help design and implement legal sanctions which are fair and
effective at the same time. Given that the criminal justice system is motivated by more theories
than the deterrent theory, such as reformative and behavioural theories, punishments should
aim to not only deter future misconduct but also address the underlying psychological factors
driving deviant behaviour at present. For instance, interventions like cognitive-behavioural
therapy and restorative justice programs may be more beneficial than traditional punitive
measures alone (Tyler, 2017). By incorporating psychological principles into the legal
framework, legal sanctions can work to promote rehabilitation and reduce recidivism among
offenders.

Therefore, psychology plays a vital role in shaping legal sanctions for organizational deviance
by providing insights into the psychological mechanisms driving misconduct, informing the
design of effective interventions, and assessing organizational factors influencing behaviour.
By integrating psychological principles into the legal framework, policymakers and legal
practitioners can develop more comprehensive strategies to prevent and address organizational
deviance.

The current paper, since it focuses on corporate deviance in particular, delves into how such
principles play a significant role in justice and deterrent mechanisms within the organizational
structure itself. In fact, focusing on more holistic approaches and incorporating rehabilitative
measures is more feasible and desirable in organizational justice and welfare programs, as
compared to legal sanctions and penalties. This is largely because organizations can practically
have access to the funds and resources required to put such principles into practice, whereas
the legal system, owing to the vast swathes of masses it is duty-bound to deal with, may, at
times, not possess the capacity to incorporate them.

Furthermore, psychology plays a pivotal role in assessing organizational culture and climate,
which are crucial determinants of deviant behaviour. A “toxic” work environment
characterized by high levels of stress, job dissatisfaction, and perceived injustice may foster
misconduct (Kish-Gephart, Harrison, & Treviño, 2010). Researchers can identify
organizational risk factors through psychological assessments and surveys and develop
strategies to promote a positive workplace culture conducive to ethical conduct.

Relevance of Sociology:

While psychology can provide data on how specific psychological stimuli produce results in
the form of deviant behaviour, sociological theories give us the basic framework for
understanding the systemic root causes and dynamics that underpin deviance. It is imperative
to understand sociological indicators affecting organizational deviance to form a well-rounded
psycho-social perspective of the same, and in turn, apply it in shaping legal sanctions.

For instance, structural functionalism examines how deviant behaviours emerge from
continued dysfunctional aspects of organizational processes. Symbolic interactionism focuses
on how social interpretations and interactions may shape deviant behaviours in an
organizational context (Blumer, 1969). By applying sociological perspectives, legal authorities
can gain insights into which systemic factors contribute to deviance and enable more effective
sanctioning strategies.

Sociology highlights the role of organizational culture in shaping deviant behaviours and the
following responses to legal sanctions. Cultural theories portray how shared beliefs, values and
norms can influence the individual’s perceptions of deviance and adherence to legal standards
(Schein, 1985). Legal interventions aiming to address and curb organizational deviance could
greatly benefit from considering cultural dynamics to foster genuine behavioural change and
compliance.

Basics of organizational deviance:

To subsequently analyze the various studies conducted on corporate deviance, the factors
driving it, and their potential inculcation into legal mechanisms dealing with such deviance, it
is essential to first gauge a bird’s-eye view of what organizational deviance is, and how the
prevalent academic literature appreciates it.

Workplace deviance can occur and be expressed in a multitude of ways, ranging from minor,
extreme, violent and non-violent behaviour. Ultimately, it is understood to be activities that
reduce the productivity of an organization. This is said to occur in two main forms:

1. Organizational: This can be defined as any deviance which is aimed directly at the
organization (Pulich & Tourigny, 2004). It refers generally to production or property
deviance, which can be expressed as excessive absenteeism, tardiness etc. (Everton, et
al., 2007) Some researchers have termed them as “withdrawal behaviours”, allowing
employees to emotionally and physically withdraw from the organisation (Everton, et
al., 2007).

2. Interpersonal: Interpersonal deviance is deviant behaviour “targeting specific

stakeholders, especially coworkers” (Pulich & Tourigny, 2004). This may include
assigning blame to coworkers and/or gossiping about them. Researchers believe that it
occurs when employees feel a “sense of entitlement associated with exploitation”
(Pulich & Tourigny, 2004).
There are two fundamental reasons underpinning deviant behaviour within organizations, as
identified by researchers and academics, namely:

1. Abusive Supervision: Abusive supervision is defined as the way “subordinates perceive

the extent to which their supervisors engage in a sustained display of hostile verbal and
nonverbal behaviours” (Mitchell & Ambrose, 2007). This could consist of ridicule,
silent treatment, failure to credit, fits of rage, and wrongful assignment of blame
(Larsen, 2007).
2. Psychological Contract: Beyond and apart from the existent employee contract and the
benefits promised to them by the organization, employees tend to create a set of
expectations about their workplace, and this way make psychological contracts with
their respective organizations. The metaphorical “breach” of these contractual
obligations by the organization leads to employees feeling mistreated in some manner.
Therefore, workplace deviance in this manner can be understood as a form of “negative
reciprocity”.

The third component of a background understanding of organizational deviance is

understanding organizational justice, i.e., how organizations attempt to reduce/curb deviant
behaviour. This can be termed the most important part in gauging a beneficial/informed
perspective of organizational deviance since the correctional mechanisms used and the overall
“attitude” the employees have towards an organization go a long way in determining whether
or not they engage in deviant behaviour.

Organizational justice can be organized into 3 sub-categories, namely:

1. Procedural: This is concerned with how the decision-making process has come into
being.
2. Distributive: This, alternatively, considers the decision itself.
3. Interactional: This involves the interpersonal relationship and a sense of fairness that
the employees perceive with their supervisors and other authority figures in the
organization.
 Findings and Discussion:

In detailing the key findings of this study, it would be beneficial to put things in perspective by
organizing them under the 3 thesis questions enlisted in the abstract of this paper.

I. How corporate deviance differs from other forms of deviant behaviour within
organizations:

In focusing our paper on corporate deviance within the broader umbrella of organizational
deviance, it is imperative to first define the former in contrast with the latter, highlighting the
differentiating factors which are specific to corporate deviance.

When the term, ‘Organization’ is used, it is nowhere implied that the body’s main motive is
necessarily profit maximization, whereas a ‘Corporation’ does, primarily, exactly that. Hence,
although the majority of literature on corporate and organizational deviance, conflates the
definitions of both, for the current paper we will be focusing on deviant behaviour taking place
within bodies that chiefly work towards profit maximization, i.e., corporations. It makes the
most logical sense to start the analysis by noting this distinction as the latter parts of this paper
shall delve into how the organization’s goal, as a whole, being profit maximisation interacts
and interplays with the psychological and sociological factors driving the behaviour(s) of the
individuals forming it.

The fundamental caveat in looking at psycho-social factors interacting with the

environment/culture of a corporation and resulting in deviant behaviour is that unlike in other
types of organizations, in corporations, the larger goal of profit-maximization, at least
theoretically, runs in contravention to the individual goals of its employees.

The aforementioned deduction is relevant, even if assuming that it is untrue in practicality,

since its presence in theory is, on its own, enough to produce a whole set of social motivations
for deviant behaviour. To illustrate, employees who feel that the corporation is maximizing its
profit at the expense of their individual economic growth and well-being, i.e., opt into the
Marxist labour exploitation theory, would naturally be more driven to “act out”, deviating from
the organizational goals, subconsciously wanting to impede the growth of the corporation.
 II. The psycho-social factors affecting corporate deviance

Beyond abusive supervision, employees’ psychological contracts, et al., there can potentially
be a myriad psycho-social factors driving deviant behaviour within workplaces that might just
have nothing to do with the organizational culture, type of work, pay grades, or any other
factors within the organization itself.

All individuals coming together to work in an organization bring their own set of “baggage”,
i.e., psychological and emotional impressions they collected long before joining the
organization. Studies show that these factors, besides psycho-social stimuli within a workplace,
can play a huge role in determining how an individual conducts themself while working in an
organization.

A pertinent example of this is childhood trauma. Data obtained from the 2012 cycle of the
Canadian Community Health Survey showed that the prevalence of any form of child abuse
was 32.8%, physical abuse being the most common form with a prevalence of 26.9%
(Kanyinga, et. al., 2017). A population-based study conducted to examine the correlation
between child abuse and work stress in adulthood showed that “child abuse was significantly
associated with greater odds of job dissatisfaction, job insecurity, and self-perceived low
support. It was also associated with high levels of psychological demand and job strain”
(Kanyinga, et. al., 2017).

III. Potential Application to Correctional Mechanisms and Resultant Implications

Most corporations, while formulating correctional strategies, focus only on factors within the
workplace which may drive deviant behaviour. However, as evidenced by the aforementioned
findings, there could be a lot of ‘background’ or ‘underlying’ psychological and sociological
drivers behind the deviance of an individual employee.

Opting for a realistic and non-utopian approach, it may be first conceded that the burden to
acknowledge and address the presence of childhood trauma, learning disabilities, and mental
illnesses in individuals working at a given corporation, cannot be attributed, at least solely, to
the corporation.
Before analyzing how corporations can account for such factors in their employees, it is natural
for certain elementary questions to arise: Why should an organization should even begin to
take such factors into consideration. How broadly can the umbrella of Corporate Social
Responsibility be stretched? Finally, is investing time, labour and resources into addressing
these concerns going to proportionately bolster the productivity of an organization?

At the outset, the analysis that shall follow is going to be generalized in nature as focusing in-
depth on any one organization is not within the scope of this paper since organizations are
barred from providing public access to data such as employee files, much less their
psychological evaluations if existent, which would rather enormously aid in assessing the
psychological motives of employees that face issues in a workplace or engage in deviant
behaviour.

However, among research that can be ethically accessed, the WHO published data revealing
that in 2019, 1 in every 8 people, or 970 million people around the world were living with a
mental disorder, with anxiety and depressive disorders the most common (Mental Disorders,
2022). Further, ample statistics show that the majority of workers in a given organization suffer
from spiked stress levels ranging from unsustainable stress to moderate stress, with only 5% of
workers reporting a stress-free lifestyle.
 Stress Levels Reported by Full-Time Office Workers in the U.S. (Kumar, 2023)

Keeping with the above-mentioned limitations, it is rather beneficial to confine the discussion
to how addressing these psycho-social concerns would be beneficial to the organization, and
not delve into the potential social responsibility of an organization to address such factors in
its employees.

Since data shows that most workers grapple with psychological hurdles like stress, mental
health issues, and childhood trauma, and with the ever-evolving diversity quota requirements,
implications of systemic discrimination and socio-economic limitations as well, it logically
follows that accommodating such factors in its correctional procedures and work/production
schemes has the potential to boost the productivity of an organization and lead to an increase
in its overall profit.
Recommendations:

It should, however, be noted that this paper in no way argues that the following
recommendation(s) are feasible for small-scale organizations, and limits its exploration of
possible recommendations to large-scale, high-profit corporations, for example, the ‘Big-4’
Law Firms that can afford to expend resources and focus on arguably minor areas like the
mental health and social standing of each of their employees to increase their productivity. It
is a given that this is reserved for those organizations which already have all the other, more
primary, mechanisms like marketing in place for profit maximisation.

Most large corporations do have Company-Provided therapists whose services their employees
can avail as part of Employee Welfare Programs undertaken to improve loyalty to an
organization. Yet, these professionals are completely isolated from the mainstream workforce
of an organization, and hence cannot provide any valuable information or insights on how to
tailor the work allocated or other conditions more efficiently for each employee respectively.
The possible integration of psychology and psychiatry professionals into the mainstream
workforce, as a sub-department of Human Resources, could be immensely beneficial to a
corporation’s productivity and in deterring deviant behaviour in employees, arising from
clashes between workplace conditions and their respective psycho-social limitations.

CONCLUSION

Limitations and Ethical Considerations:

One cautionary factor to this approach could be the thin line between how much a therapist can
reveal to HR personnel or other authorities without violating an employee’s privacy and patient
confidentiality. This could be a serious implication as even an accidental breach in
confidentiality can lead to the employee(s) losing confidence and trust in the corporation’s
policies and safeguards, amalgamating in a culture of distrust and eventual disintegration of
the entire organizational culture.
Hence, confidentiality is an important consideration to keep in mind while implementing such
a policy, and protective measures like obtaining the approval of the concerned employee and
discussing with them the information being disseminated by the psychology professional,
before it takes place, are to be necessarily undertaken.

Lastly, there remains the question of whether or not it would be more cost-efficient for an
organization to simply focus on promoting and allocating important workload to those
employees without such psychological or social hindrances, instead of working with each
employee to accommodate these factors within the workplace. The answer to this lies in the
statistical evidence reproduced in previous sections showing that, on average, the majority of
the population grapples with such issues. Therefore, while organizations which can’t afford to
exercise such intricate mechanisms are forced to work within the presumption that it would be
‘cheaper’ not to, the large corporations, which this paper focuses on, would benefit from
engaging in them.
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