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Global Financial Crisis: Organizational Behaviour and Analysis

Corporate organisations are social entities or systems where people of different ethnicities, socioeconomic backgrounds, cultures, and calibres merge to form an organisational structure. According to Boddy (2011), modern organisations exist in a hierarchical arrangement where leaders and subordinates interact and share views. Socialists have argued that almost all organisations are social in nature, but only a few are true social entities (Boddy 2011).

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Recently, the debate about the issue of corporate psychopaths has heightened due to an increase in the cases of workplace dissatisfaction, conflict, discrimination, and redundancy. Corporate psychopaths are people with socially deceiving or malevolent personalities. They pretend to be virtuous within social systems, but only pursue personal interests (Boddy 2011). Fundamentally, this essay seeks to provide a comprehensive insight into organisational psychopaths and explore the impacts that they can pose on organisations.

Organisational Psychopaths and Related Social Theories

A continuing social assumption is that corporate organisations are social entities or systems comprising of different individuals mutually bound to achieve certain desired corporate goals and objectives (Gao, Raine & Phil 2010). Although the prevailing notion is that organisations are social systems, very few have proven to be truly social. Through analysing the modern nature of social relationships, some socialists and social theorists have argued that the true meaning of socialism in modern companies is complex (Hopen 2010).

As a result, the modern form of organisational social systems is characterised by ambiguity, anonymity, and maliciousness among people. In modern hierarchically designed organisations, workplace enmity, discrimination, and conflicts are common occurrences, though their causes and magnitude differ (Wilson 2010). Whereas most organisations possess the literary assumptions and designs of structures in their workplaces that make them seem social, a few are indeed social organisations.

Organisations comprise of diverse individuals of different nature, intentions, traits, and behaviours within the organisational social structures (Hopen 2010). Such assumptions present the unique nature of organisations as social entities in which their structures take the form of complex adaptive systems. The theory of complex adaptive systems is a modern conjecture that assumes that corporate organisations have social structures with inherent complexities or intricacies.

Organisational social structures are complex because of the interaction and interrelationship of individuals from diverse backgrounds and with different intentions in the workplace (Hopen 2010). The theory of the complex adaptive systems also assumes that organisations comprise of many different natural systems such as societies, intellectualities, and ecologies with nonlinear and spatial interactions. Richards (2008) states that social systems of corporate organisations have individuals with complex personalities whose intentions and behaviours are not easy to detect, deter, or control within the intricate social entities.

Recently, the issue of corporate psychopath has become a highly controversial issue within workplaces as some individuals suffer from malicious behaviours of these psychopaths. According to Boddy (2011, p. 256), “psychopaths are people who, perhaps due to physical factors to do with abnormal brain connectivity and chemistry, have no sympathy or empathy for other people.” Psychopaths are socially deceiving individuals who portray themselves as normal, charming, honest, caring, and virtuous people with persuasive and fake leadership abilities (Boddy 2010).

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However, the friendly, charming, and innocent exterior nature of psychopaths is often misleading as these individuals are ruthless and malevolent people whose intentions within social structures are to fulfil their personal desires and interests. In most occasions, typical psychopaths in workplaces are individuals often seeking professional positions and responsibilities maliciously to possess power, prestige, and affluence (Boddy 2010). The concept of the workplace psychopath has become a pervasive issue with an increasing number of esteemed workers reporting frustrations and stress instigated by psychopaths.

Impacts of Psychopaths on Corporate Organisations

While people may assume that psychopathic behaviours in organisations are undoubtedly harmful, the extent of the damage they can impose on the organisation has always remained undermined. Any staff member can decide to become a psychopath and inflict serious harm to corporate organisations (Gao, Raine & Phil 2010). Psychopathic behaviours may prove extremely injurious depending on the manner in which corporate organisations view the issue.

Their effect can be felt in employee affairs and productivity of an operating firm. In organisations where democracy, rights, and freedom of employees receive less attention the human resource departments face challenges due to strained relationships amongst workers. The existence of psychopaths can cause workplace problems ranging from mere workforce stresses to enormous financial losses. Champoux (2006) postulates that psychopathic behaviours can result in a series of negative impacts on an organisation ranging from employee dissatisfaction, workplace conflicts, reduced cooperation, bias, fraudulent activities, illegal practices, disheartened workforce, and unfair dismissals.

Employee dissatisfaction

The most detrimental part of psychopathic behaviours is when these forms of behaviours occur in organisational leaders where tyrannical leadership and hierarchical order is a norm in the corporate culture (Richards 2008). Although leadership is a practice that entails training, individual management behaviours are natural and can often influence the leadership techniques that managers use on workers. Destructive leadership behaviours have always associated with low motivation and dissatisfaction among employees who normally demonstrate discomfort and fear in the workplaces (Champoux 2006).

Unscrupulous executives with psychopathic behaviours cause workplace chaos, attrition, fear as well as physical and emotional torture to the workforce. Devoid of charisma and idealised influence necessary to maintain workers and raise staff motivation, leaders with psychopathic behaviours rule in an unethical manner and thus, pose developmental dangers to organisations (Andrews & Furniss 2009). These unscrupulous executives are heartless, cruel, and fond of violating the rights of others. Subsequently, they cause emotional trauma and workplace stress that result in employee dissatisfaction.

Workplace Conflicts

Corporate organisations are social units where individuals with different intentions, behaviours, and backgrounds meet with the main working aim of fending for personal economic needs (Wellons 2012). Although workplace conflicts are inevitable and inescapable, psychopathic behaviours are often the source of aggressiveness and antagonism in the work environment. Psychopaths make irrational and emotionless decisions purposely to fulfil their personal desires, but fail to possess the charisma required to manage their social interactions with others.

Huczynski and Buchanan (2006) argue that psychopaths possess the traits of irresponsibility, have poor behavioural control, live a parasitic lifestyle, and are selfish and manipulative. These psychopathic behaviours tend to erode the mutual responsibility and accountability expected of employees and make genuine employees to suffer the consequences of ill motives or actions of psychopaths. According to Wellons (2012, p. 44), “corporate psychopaths often demonstrate low perception levels of corporate social responsibility.” This means that psychopaths often act contrary to the norms of business ethics and standards that guide relations.

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Low Workplace Cooperation

Empirical evidence on human capital has revealed that cooperation is one of the most influential components of workforce productivity because leads to enhanced performance and informed decision-making. According to Gratton (2011), workplace cooperation is achievable when individuals behave charismatically and show empathy to others within the group. The greatest spoiler of workplace cooperation is conflict associated with the irresponsible actions of employees or managers with merciless and manipulative traits (Gratton 2011).

Humble or charismatic employees willing to interact and share ideas in the workplace normally face the socialism challenge and feel nervous when they mingle with corporate psychopaths who possess manipulative personalities. When psychopathic individuals demonstrate unruly behaviours, genuine and determined workers tend to escape employee teams designed to create workplace solutions and problem-solving mechanisms (Gratton 2011). Such issues result in greater losses in the productivity of organisations, since teamwork is normally essential in problem-solving and critical decision-making in organisations.

Business Financial Losses

The hierarchical order in modern corporations has allowed the prevalence of departmental portions where organisations remain divided into sectors with appropriate leadership design (Boddy 2011). Organisational psychopaths have the tendency of eyeing top positions and leadership favours within corporate sectors that have the possibility of giving them career growth opportunities. The persuasive nature of psychopaths allows them to secure serious professional positions, including those that directly link with financial matters, those that present gainful economic opportunities, and those that associate with lucrative corporate resources (Boddy 2011).

Psychopaths are misleading individuals who seek personal triumph as opposed to corporate stability and growth. An empirical research on the most financially affected organisations during the global financial crunch revealed that unscrupulous corporate leaders contributed to the financial scandals witnessed (Boddy 2011). Evidence of dark leadership from stealth and highly psychopathic senior directors was amongst the major contributors to the financial downbeats that companies faced during the Global Financial Crisis.

Fraudulent Activities and Illegal Practices

Organisational laws and regulations develop from polices that come from ideas that the management and employees contribute to their formation and reformation (Lee 2005). Psychopaths are malevolent persons who present themselves as socially and morally decent individuals, but they are normally the perpetrators of illegal activities and fraud that often results to enormous workplace discomfort (Lee 2005). When psychopaths lead crucial departments such as finance departments and other departments associated with lucrative resources, their manipulative traits brings corporate wrangles and crises.

According to Lee (2005), when fraud pervades in an organisation, employees begin feeling discontented with the practices of top leadership that seem to allow fraud activities. Such scenarios lead to low motivation towards achieving corporate goals as the attention of most workers shifts to fulfilling personal financial or economical desires (Lee 2005). Consequently, the focus on the most important issues of the corporation loosens and the inspiration to fulfil personal desires increases tarnishing the organisation’s reputation.

Disheartened Workforce and Unfair retrenchments

Organisational psychopaths, especially those who have managed to manipulate leadership and found themselves in the top management levels, tend to act and react on loyal employees and other junior managers. Since psychopaths possess a retrogressive attitude towards the company, esteemed subordinates and young managers face challenges dealing with psychopathic leaders (Sellbom & Verona 2007). The selfish nature of psychopathic leaders makes them scorn others in the workplace, manipulate the subordinate staff, introduce discouraging policies, and break social bonds among workers.

When they possess power, psychopathic leaders unnaturally tend to use confrontations or force to dismiss or retrench workers who fail to cooperate and cope with their form of authoritative and manipulative leadership (Sellbom & Verona 2007). Due to obstructions that loyal employees pose to the psychopathic managers concerning corruption and other unethical business practices, the most inappropriate weapon that these managers use is unfair and forceful dismissals (Luthans 2004). Such situations leave the company with a disheartened workforce with high levels of stress and job dissatisfaction.

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Lost Reputation in the Labour Market

Psychopathic individuals often tear down organisations both from within and externally, especially when the human resource management system seems compromised (Sellbom & Verona 2007). Modern aspiring workers and managers tend to seek working opportunities in organisations with effective and fair human resource practices that respect human dignity. Psychopathic leaders pose great dangers to the reputation of a company in terms of its association with inspiring workforce, since a disturbed workplace can barely attract new workers with innovation and competence (Luthans 2004).

Therefore, companies with psychopathic leaders normally lose their reputation in the labour market because they create a hostile working environment that increase staff turnover. The aspiring workforce and experienced managers in the labour market would definitely fear reprimands, intimidations, coercions, and frustrations that may arise from psychopathic leaders in the workplaces they anticipate to join (Boddy 2005). Consequently, companies affected by psychopathic leadership may also fail to attract new talented employees and even retain their brilliant workforce.

Workplace Biasness and Corruption

The most frustrating issue for a workforce is when their managers downplay the important issue of equity and fairness in the distribution of resources, opportunities, and responsibilities. Psychopathic human resource leadership is among the factors contributing to the growing menace of racial, religious, and cultural prejudice in workplaces. According to Wilson (2010), psychopaths found in organisational leadership often fight for self-sufficiency, self-growth, and growth of fellow relatives or ethnic members because they focus on personal success is greater than the achievement of corporate objectives.

Wilson (2010) claims that such tendencies lead to discrimination and workplace bias whereby members allied to the psychopathic leaders enjoy more workplace privileges than those opposing these psychopaths. Unfair distribution of resources and opportunities in the workplace results in workplace stresses, enmities, confrontations, vengeances, and racial or ethnic divide that further raise questions concerning business ethics (Richards 2008). A frustrated workforce tends to lose motivation, demonstrates reduced competency, and loses corporate focus.

Conclusion

While analysts have focused on incarcerated criminals who endanger public safety, little is known about the existence of non-criminal psychopaths who pose serious threats to corporate stability. The prevalence of corporate psychopaths who ruthlessly portray opportunistic and manipulative behaviours in workplaces is a growing concern for many organisations willing to practice ethical governance.

Corporate psychopaths are malicious individuals capable of destroying cooperation in the workplace, practicing fraudulent activities, instigating workplace violence, causing low employee satisfaction, fuelling workplace bias, and killing the reputation of an organisation in the labour market. Human resource or social capital is a crucial component that determines stability in the growth and development of organisations. When psychopaths frustrate a determined workforce, issues of employee productivity and business ethics arise with detrimental impacts on corporate performance. Reports on the global financial crisis seem to associate psychopathic leadership with the financial losses experienced by firms during the world economic crunch.

References

Andrews, H & Furniss P 2009, ‘A successful leader or a psychopathic individual?’, Management Services, Vol. 53, No. 4, pp. 22-24.

Boddy, C 2005, ‘The Implications of Corporate Psychopaths for Business And Society: An Initial Examination And A Call To Arms’, AJBBS, Vol. 1, No. 2, pp. 30-40.

Boddy, C 2010, ‘Corporate Psychopaths and Organisational Type’, Journal of Public Affairs, Vol.10, No. 4, pp. 300–312.

Boddy, C 2011, ‘The Corporate Psychopaths Theory of the Global Financial Crisis’, Journal of Business Ethics, Vol. 102, No. pp.255–259.

Champoux, J 2006, Perception, Attitudes and Personality, Organisational Behaviour: Integrating Individuals, Groups and Organizations, Thomson publishers, Ohio.

Gao, Y, Raine, A & Phil D 2010, ‘Successful and psychopaths: A neurobiological model’, Behavioural Sciences & The Law, Vol. 28, No. 2, pp. 194 -210.

Gratton, L 2011, ‘Workplace 2025 – What will it look like?’, Organizational Dynamics, Vol. 40, No. 2, pp. 246-254.

Hopen, D 2010, ‘The changing role and practices of successful leaders’, The Journal for Quality and Participation, Vol. 33, No. 1, pp. 4-9.

Huczynski, A & Buchanan D 2006, Organizational Behaviour: An Introductory Text, 7th ed., Financial Times Prentice Hall, Harlow.

Lee, I 2005, ‘Is there a cure for, “corporate psychopathy”?’, American Business Law Journal, Vol. 42, No. 1-6, pp. 65-95.

Luthans, F 2004, Stress and conflict: Organizational Behavior, 10th ed., McGraw-Hill Publishers, Boston.

Richards, J 2008, ‘The many approaches to organisational misbehaviour: A review, map and research agenda’, Employee Relations, Vol. 30, No. 6, pp. 653-678.

Sellbom, M & Verona, E 2007, ‘Neuropsychological correlates of psychopathic traits in a non-incarcerated Sample’, Journal of Research in Personality, Vol. 41, No. 2, pp. 276-94.

Wellons, S 2012, ‘The Devil in the Boardroom: Corporate Psychopaths and Their Impact on Business’, PURE Insight, Vol. 1, No. 1, pp. 42-45.

Wilson, F 2010, Organisational Behaviour and Work: A Critical Introduction, Oxford University Press, New York.

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