Why Organizations Cannot Do without a Bit of It
The reaction to scandals in organizations is always the same: there is outrage at the rampant hypocrisy within the organization and irritation over the contradictions between the principles that inform the way the organization presents itself to the outside world and those that inform its actual daily practices.
The basis for all this anger seems to be the widely shared view that political parties, public administrations, supranational organizations, and businesses should damn well act in accordance with what they say or how they present themselves. According to the dominant view, the decisions taken by an organization should, as far as possible, be in line with its vision, ideals, values, programme, or manifesto.
This consensus forms the basis for most criticisms of political parties – ‘they are not doing what they promised’ – because it is never possible for a party in government to do exactly what it announced it would do in its election manifesto. Outrage at hypocrisy serves as an excellent basis for a newspaper opinion piece, should a journalist find herself in the awkward position of not having something to criticize. ‘They aren’t doing what they said they would do’ is, for one thing, never wrong in the case of political parties, public administrations, and businesses; what’s more, it is the easiest way to score moral brownie points with your audience, who believe without question that talking and doing should coincide.
All these complaints about hypocrisy, however, overlook a crucial point: the usefulness of hypocrisy to organizations. The economist and expert in organization studies Nils Brunsson was the first to draw attention to the fact that, for organizations, hypocrisy is not a problem, but the solution. Whether it is a governing party, an opposition party, an international aid organization, an NGO critical of globalization, the plant manager of a large car manufacturer, or the workers’ council of the same company, an organization depends on professionally practised hypocrisy.
This unavoidable organizational hypocrisy follows from the contradictory demands that political parties, public administrations, and businesses have to meet. The Christian political party must speak to its base in the provinces but also remain attractive to more progressive city dwellers interested in a high-tech society. It must at least give the impression that it lives up to its name, but at the same time it can hardly expect every party member to lead the life of a Jesuit. A development bank must claim that it wants to eradicate poverty, even at the cost of making itself superfluous, and sound credible saying it; at the same time, the bank is compelled to increase the volume of credit it provides and thus to grow. Like all other development banks, it cannot buck the trend towards more support for smaller projects that are designed for local conditions, but the limited number of project managers means that campaigns become larger and larger so that a maximum credit volume can be achieved with a relatively small number of employees. A car manufacturer that is partly state owned has to make a profit that is comparable to other players in the sector, but it also has to pay satisfactory wages to its employees.
Of course, an organization could just decide to go one way or the other. The Christian party could focus exclusively on the hard-core Christians out in the sticks, the development bank on fighting poverty, and the car manufacturer on increasing shareholder value. Most organizations dream of squaring the circle by eliminating one element in the conflict, and thus – eagerly supported by consultancies – every business, church, or university wants to concentrate on just one thing: selling mobile phones for the greatest possible profit, achieving salvation for the faithful, or generating 100% satisfaction among the students, or rather ‘customers’, of the university. This would fulfil the requirement of purity and consistency but lead to a loss of support from many groups. The operative logic in these decisions is clear enough: a fundamental decision in favour of one group will necessarily lead to dissatisfaction in the other – a high risk for any organization.
Two sociologists from the US, Marshall Meyer and Lynne Zucker, have demonstrated that organizations that face contradictory demands, and therefore cannot effectively concentrate on one goal, are often better able to survive than those who follow the efficiency-based model of a sole focus on one target and target group. Examples of this initially surprising finding are easy to find if one looks to those political parties, universities, or companies that have existed for decades, or even centuries. They are rarely models of streamlined organization; rather, they integrate the contradictory demands they face more or less cleverly into their organizational structure, and then dress up the situation with an attractive façade.
The stronger the contradictory demands placed on an organization, the more perfect the decorative exterior has to be. The more heterogeneous a political party’s constituency, the more it depends on an attractive but not overly detailed appearance. The more obvious it becomes that a development bank cannot live up to its commitment to eradicate poverty, the more it depends on doublespeak. The more a car manufacturer is faced with demands from large shareholders, politicians, trade unions, environmental groups, and not least from its customers, the more emphasis it places on presenting itself as a company that is profitable in the short term, sustainable, employee centred, environmentally aware, and also socially responsible.
To put it bluntly, if they want to provide their goods and services, organizations must engage in professional hypocrisy. Or, in the words of Nils Brunsson, if companies, political parties, universities, and churches want ‘action’, they must produce ‘talk’. Political parties preparing to take momentous political decisions, negotiated in shady backroom deals, rely on hypocrisy. The development bank running large-scale credit programmes needs to invest a lot of energy into the production of hypocrisy. Car manufacturers that want to produce their cars without outside interference need to be seen as squeaky clean.
Organizations create special units for the production of hypocrisy, whose sole task it is to look after an organization’s public presentation. Press teams have to burnish the organization’s image, especially during crises. Departments are put in charge of sustainability issues, and have to create the impression that profit is not the be all and end all and that responsibility for the environment is just as important. Compliance officers seek to create a semblance of business integrity, especially in those areas in which organizational corruption is an essential part of the business. Departments for strategy development spend most of their time preparing presentations for the executive board of their division, while the board in turn simply sends these over to the main executive board to reassure them that something is being done. These special units for hypocrisy are very intentionally decoupled from the operative business: their function is to prevent any external disturbances from reaching those areas that are actually productive.
But of course, the matter of legitimating one’s activities by erecting these façades cannot be fully decoupled from day-to-day business. When a company, under pressure from the public, claims that some highly controversial pesticide will not be used in the cultivation of the pineapples it sells, this often has unintended consequences for the cultivation methods the company uses in developing countries. When an electronics company, with great fanfare, appoints a new head of compliance, the tried-and-tested practices of bribery, for which there is a sound economic rationale, cannot continue in the same way as before.
But the biggest danger with the newly appointed sustainability specialist or head of compliance is that these roles create the illusion that the internal functioning of the company will be governed by their agendas. In fact, these roles are primarily about burnishing the company’s public image.
