What the U.S. Government Shutdown Teaches Us about Organizational Corruption


Organization Eaten by Conflicts of Interest.  B Pinkowski
Organization Eaten by Conflicts of Interest. B Pinkowski

The 2013 U.S. Government shut down demonstrates the powerful and destructive effects of conflicts of interest on groups, nations, and the global community.  Skipping past the news stories that lay blame on one group or another, we can see this incident as one of a series of escalating conflicts among the political class in the U.S. over many decades.

However, even the “media spin” on this most recent conflict portrays the real stakes for both the Democrats and Republicans – advantages and disadvantages in the outcome of the next election.

That spin also reveals an important learning point about the destructive impact of conflicts of interests on organizations and society.

This most recent contest between Democrats and Republicans in the U.S. costs private businesses $160 Million each day, and has a serious long term impact on the many other significant matters for the U.S. and the world at large.  The financial impact on those businesses is merely collateral damage in the election contest.

By engaging in incessant fighting and putting the interests of the political parties ahead of the survival of the communities they represent, and society at large, they have corrupted the very goals and purposes of the U.S. Constitution.

The U.S., as a nation, shares the same group characteristics as any other group.  (See What is Anticorruption?)

Conflicts of Interest Overshadow Public Interests

5 Characteristics of Groups

Groups are identified by 5 primary characteristics.

        1. Identity
        2. Purpose
        3. Ability to carry out Group Purpose
        4. Intent to Survive into the Future
        5. Ability to defend itself.

All groups, whether the U.S. Government, Rotary Clubs, sports teams, corporations or Al Qaeda operate with these same basic characteristics.

Attack on Group Purpose

From a group perspective, the purpose of the U.S. Government is set out in the Preamble to the Constitution, which is widely taught in U.S. schools.

“We the people, people, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.”

Alignment of Organization Activities.  B. Pinkowski
Alignment of Organization Activities. B. Pinkowski

We can see that the political class in the U.S. has lost sight of this group purpose and is actively fracturing the society with their conflicts of interest, and weakening the group identity.

Alignment of purposes within the subgroups of an organization. B. Pinkowski
Alignment of purposes within the subgroups of an organization. B. Pinkowski

Attack on Group Identity

The impact on group identity is manifest in the “choosing sides” behavior of U.S. Citizens as they gravitate to the identity of the smaller groups – Democrats or Republicans.

The political leadership of the U.S. government has lost their willingness to develop and strengthen the group characteristics of “the United States” in favor of the group characteristics of the subgroups – the political parties.

To the degree that U.S. Citizens fall into that choice, they contribute to the corruption of their country. My country.

I fully expect angry responses from U.S. Citizens and others as they justify the vitriole and deny their responsibility and contribution to the corruption of the United States.  If the anger contributes to a dialogue – I welcome it.

Regardless of any such denials, the learning point is how this models the corruption – decay – of other groups.

A large organization can be destroyed by conflicts of interest and unaligned purposes. B. Pinkowski
A large organization can be destroyed by conflicts of interest and unaligned purposes. B. Pinkowski

Disagreement with Group Purpose and Policy

Like the political parties in the U.S., smaller groups, such as a corporation, or a single government institution, contain subgroup members that (unwittingly) destroy the five characteristics of their group via conflicts of interest.  Like the U.S. political parties they also attempt to “spin” their conflict of interest as something that is somehow still in line with larger group policy.

For example, a government office may hire an employee simply because he has personal relationships with a local government official.  Such a hiring is against multiple policies of the government office, but is rationalized as being nonetheless important.

This employee, knowing that he was hired despite the rules, concludes that the policies designed to help the organization reach it larger goals do not apply to him.  Correspondingly, he then carries out other actions in violation of organization policy – misusing government authority to attack and suppress any activity inconsistent with his personal interest.  He has reached a rational conclusion because the rules are – obviously – not serious and do not apply to him.

The result is an immediate weakening of organization purpose, and failure to reach larger organization goals in his area – because that employee and those that hired him, disagreed with the larger organization policies, and put their own judgment ahead of the goals of the government institution.

Organizational Destruction by conflicts of interest, criminal activity and non-aligned purposes.  B. Pinkowski
Organizational Destruction by conflicts of interest, criminal activity and non-aligned purposes. B. Pinkowski

I have seen this specific violation result in the defeat of organization objectives, weakening of organization purposes and broken intergovernmental relationships – all because individuals were able to place their personal goals and interests/purposes above the group goals and purposes.  (Nepotism is also form of conflict of interests.)

Fundamentally, this is a disagreement with the larger policies and disagreement on the primacy of the larger purpose.

Political parties in the U.S., however, understand the importance of adherence to their own purposes and policies and have systems in place to impose “party discipline.”  Again, their willingness to “discipline” their party officials for failure to stay focused on party goals (ahead of larger U.S. goals), creates a conflict of interest that is destructive to the larger group.

How to Correct the Impact of Conflicts of Interest Within Groups

Groups, whether corporate or government, face similar difficulties.  Subgroups within a corporation will periodically oppose or disregard otherwise rational goals and policies, sometimes to extreme or even criminal ends.

It should go without saying, that the most serious result can be death of the organization.  Whether corporate or government, history is littered with the death of corrupted nations and groups.  The impacts on the group members are often substantial.

In Why Nations Fail – the authors discuss many varieties of the failure of the larger groups called Nations.  The authors cite the Arab Spring countries and other such examples of the national leadership causing harm to the entire population as they place their personal interests to supersede their responsibilities to the country.

The analogy applies to corporations and other groups as well.

The solution, of course, is for organization’s leadership to (re)focus on the goals and purposes of the organization, and be diligent about ensuring policy adherence, and group focus on those goals.  Simple? Of course not.  The conflict of interest overwhelms the ability of many in power and they are unable to refocus.

Where the organization’s leadership is unable to find the discipline needed to correct their behavior, or simply refuses, the stockholders (or citizens) can select new leadership or permit the organization to continue on its downward path to death.

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5 thoughts on “What the U.S. Government Shutdown Teaches Us about Organizational Corruption

  1. Brian, Truly an excellent article, thank you. I must comment, however, on the website photo and suggest that corruption can be depicted in a more ‘egalitarian’ fashion than that communicated through this photo—which is quite raced….and we are all quite aware that there are no racial boundaries when it comes to corruption….all the best, Sue

    1. Sue, thanks for the feedback. You are correct that corruption is colorblind. Indeed, I have been working in multicultural environments for so many years that the idea that people continue to use race or color as a basis of thinking is frustrating to me.

      The photo was provided by a South Sudanese journalist when asked to give me a photo that communicates the idea of “corruption.” Thus, the idea of race was certainly not included by the South Sudanese or me.

      Regardless of our subjective views, you correctly observe that someone without knowledge of the background could see the image from a race or color perspective. As my Blog has over 15,000 reads from all over the world, I’ll give some thought to a different image right away.

      Good luck to you out there.

      BJP

  2. Brian (and Sue),

    Excellent article and comments. Understand that racism wasn’t intended, but could be so perceived! Thanks for thinking of solutions.

    You say in the penultimate paragraph The solution, of course, is for organization’s leadership to (re)focus on the goals and purposes of the organization, and be diligent about ensuring policy adherence, and group focus on those goals. Simple? Of course not. The conflict of interest overwhelms the ability of many in power and they are unable to refocus.

    May I just add that leadership must be seen to be ‘walking the talk’ (sorry for over-used expression but it is very fit for purpose). I Senior Leaders are often insufficiently aware that they are being watched by their staff 24/7. Unfortunately for them, there is no private moment: they are always in the public spotlight. Being seen to live by their own values is crucially important. I think we have all seen examples where there was a dissonance between the two……

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