Organizational environments don’t usually outwardly promote dishonesty, but the structure and culture of the organization could tacitly approve of it. This corrupt structure may be exacerbated by the fast-paced, high-pressure modern operating environment. Organizations that suffer from outdated policies and little to no code of ethics may suffer from lying behaviors by executives. Such executives create an environment conducive to dishonesty by fostering an overzealous attitude to achieve results. They don’t want to hear about failures or setbacks.
Other executives encourage a collective defense against adversaries and challenges over innovation, risk, and employee achievement. This strength-in-numbers mentality facilitates collective self-deception. These deceptions offset the benefit of joining a team and feeling a part of something bigger than oneself that attracts people to an organization. Because the people who buy into this mentality may be more willing to allow themselves to be fooled to satisfy their need for a place in the organization, they become even more susceptible to deception from their leaders. It is important that organizations identify the structural, institutional, and systematic factors that contribute to this behavior in their strategic leaders.
Organizational Structures that Perpetuate Self-Deception
Organizational structures that perpetuate self-deception in their leaders may be formal or informal. Sometimes it’s the leaders themselves who create the informal mechanisms that allow and encourage them to deceive themselves and others. Such leaders habitually surround themselves with people who are willing to agree with them and go along with whatever the leaders think is best. These followers are less likely to provide honest upward feedback.
The organization may contribute to leader self-deception through systematic measures. They overload their leaders and managers with work, not allowing time to consider the moral and ethical implications of their actions. This undermines the leader’s ability to create a wholesome environment for their followers. Strategic leaders are constantly faced with high-stakes decisions. Not allowing them to carefully schedule their tasks with adequate time to complete them can affect their cognitive state and increase the likelihood they will transgress ethical norms.
The corporate environment promoted by the organization through its culture can be a cause of leader and corporate illegality. If one looks at corporate-level deception as being part of a social process, one can see how deceptive behavior in individual leaders can be attributed to the larger organization. Furthermore, the unnecessarily complex organizational structure that develops over time in some firms can amplify the escalation of deception. This complexity can heighten the ease and severity with which leaders deceive themselves and others. These fragmented networks serve to diffuse the moral weight of decisions by allowing leaders to push ethical elements of decisions off onto other departments.
In my interview with Cameron Cozzens of the Arbinger Institute, he stressed shrinking the distinctions between levels of an organization’s hierarchy to reduce some of the stressors that leaders face. Organizational stressors like the need to achieve organizational distinction, he explained, can encourage a leader to focus inwardly and self-elevate themselves above others at their organization. When the organization focuses on individual accomplishments and rewards over those of their teams, they invite people to focus on themselves rather than the greater good.
If corporate-level corruption can be attributed in part to a social process, then like any social process, it can be exponentially exacerbated as it takes a firm lower and lower into unethical behavior. An initial corrupt, deceptive act allowed to take root can begin a process that increases the ease and pervasiveness by individuals of further similar acts over time. Eventually, such behavior becomes an organization-wide phenomenon. Norm-transgressing acts such as embezzling company property, time-fraud, and poor treatment of subordinates may become more commonplace and accepted.
Deceptive practices by leaders can seep into the collective psyche of the organization over time, creating an unstable and rotten structure. Organizational over-complexity can amplify this rotting process. At each stage of the escalation of unethical practices, the corrupt environment taints the feedback loops that could bring an organization out of this free fall. Complicated divisions of labor can amplify this escalation of deception by allowing for low transparency of leader actions. If it is not abated, the organization may find itself not being able to operate without lying.
Reinforcing a Corrupt System
A corrupt system, allowed to flourish, feeds itself. Corruption, deception, and lying at the organizational level can stifle moral inquiry. It can create a cycle where reflection and thought about ethical scenarios for the organization are trapped in a vortex characterized by a comfortable group of like-minded executives. When this executive suite of leaders collaborates to deceive themselves, their organization, or the public, they also increase the likelihood that they too can be deceived.
The example of Louis XIV of France and his complacency in a war in 1688 given by historian Richard Place is a good example. Louis’ command structure populated by trusted advisors reinforced each other by confirming their already-held beliefs about their enemy and about French superiority. This belief went unchallenged throughout the executive decision-making body. It perpetuated the system from Louis to his decision-makers to the information gatherers in the field, and no evidence existed that would have given them pause to consider an alternative.
In contrast to the discussion that complexity helps create and reinforce unethical behaviors, the opposite could also be true. Loose controls over subordinates and their decision-making could be conducive to self-deception. Even at the top, fraud can exist because of loose controls over management activity. Self-interest in leaders may take preference over the good of the collective. An underground culture that runs contrary to the espoused corporate-level accountability can end up fostering top-level fraud. Dishonest leaders may be informally allowed to mislead stakeholders about the state of the organization, make false promises to colleagues, and cover up or blame others for mistakes.
Pressure and High-Stakes
At the highest levels of control, temptations can be great. High-risk financial stakes and pressing project deadlines can increase a strategic leader’s propensity for deception. This constant drip of high-pressure may loosen a leader’s will to act ethically. When faced with the next moral decision, a worn-down leader may opt to take the low road out of ease. The result could be theft of corporate property, spillage of confidential organizational information, or discrimination against employees based on stereotypes.
An organization does not have to promote the idea of doing anything necessary to get ahead, but the culture that their leaders perpetuate may push this mentality. The result could be an organization that tacitly accepts self-deception to achieve results. The operating environment also contributes to leader self-deception, as today’s high-pressure and high-tempo contributes to the pressure leaders face to perform.
an organization may formally or informally foster an atmosphere of deception and corruption
organizational stressors and the need to achieve distinction may encourage a leader to focus inwardly
constant, high-pressure situations may weaken a leader’s will to act ethically
 Williams et al. (2009)  Gorelik and Shakelford (2011)  Tenbrunsel and Messick (2004)  Gentry (2010)  Joosten et al. (2014)  Fleming and Zyglidopoulos (2007)  Cozzens, C., in discussion with the author (February 2021)  Fleming and Zyglidopoulos (2007)  Joosten et al. (2014)  Fleming and Zyglidopoulos (2007)  Bok (1989)  Von Hippel and Trivers (2011)  Place (1970)  Williams et al. (2009)  Tenbrunsel (1998)  Joosten et al (2014)