c. mackenzie, et al. - dysfunctional behavior in organisations

7/25/2019 C. MacKenzie, et Al. - Dysfunctional Behavior in Organisations

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Dysfunctional Behavior in Organisations: Can HRD reduce the impact of dysfunctional

organizational behaviorA Review and Conceptual Model

Keywords: DYSFUNCTIONAL ORGANIZATIONAL BEHAVIOR, S/HRD, MULTI-LEVELANALYSIS

Clodhna MacKenzie, University of Limerick

Thomas N. Garavan, University of Limerick

Ronan Carbery, University of Limerick


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Abstract

This article provides a review of the literature on dysfunctional organizational behaviorand its relationship with human resource development (HRD) interventions. This paper willfirstly, define dysfunctional organizational behavior, secondly, describe environmental factorsargued to influence dysfunctional organizational behavior and finally provide insight on the

negative impact of dysfunctional organizational behavior at an individual, organization andsocietal level. Applying the current financial crisis as the context of this paper, we argue thatdysfunctional organizational behavior has the capacity to negatively affect not just the stability ofthe firm but society and the larger economic community. In this paper we propose a re-conceptualization of the HRD framework through a dysfunctional behavior lens using a multi-level analysis (individual, organizational and societal) and argue that dysfunctional behavior hasthe potential for significantly negative societal impact that HRD academics and practitioners willneed to address in a new economic landscape. We conclude that HRD may not be able to fully

prevent dysfunctional organizational behavior; however, through thoroughly understandingantecedents that influence dysfunctional behavior the capacity exists to reduce the potential fordysfunctional behavior and minimize the impact at an individual, organization, institutional and

societal level. Finally, we propose a new organizational governance and agency mediation controlrole in the new post economic landscape. The creation of this role may be the difference betweenhistory repeating itself and HRD becoming a credible organizational partner, not just to the

business but to society.


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Analysis of the global economic crisis that has adversely affected almost every country inthe world illustrates the societal impact of organizational behavior that was neither safe nor sound(Honohan 2010). In terms of impact felt at a societal level, the International Monetary Fund

(IMF) estimated that banking losses in Ireland [2010] alone may be as high as 35 billion with acontraction of 14 per cent of Irelands GDP (Mody 2009), that figure revised to 73 billion(Oliver 2010; Barrett et al. 2010) in order to ensure the survival of the Irish banking system andsolvency of the country. The US bank bailout is expected to exceed US$11 trillion with US$3trillion already committed (Goldman 2009), the knock-on effect on the US economy is the worstsince the Great Depression in the 1930s. Andrew Haldane of the Bank of England estimates theglobal loss of economic output from the financial crisis may be as high as US$200 trillion(Hannon 2010). An ex-postanalysis points to a number of causes for the international financial &

banking failure: regulatory enforcement not equipped to deal with complexity of the market;socially harmful risk-taking behavior (Honohan 2009); failure of governance, knowledge andcognition (Power 2009); and macroeconomic policy ill-equipped to deal with innovation andsystemic risk in the financial system (Blanchard, Caruana, and Moghadam 2009). The agreed

consensus within the financial community is that the systemic, or macro-prudentialinterconnectedness (Federal Reserve System 2010) of the global financial & banking system was

improperly regulated and as a result of this light touchregulation, excessively-risky investmentstrategies in terms of securitized products, sub-prime mortgage exposure, commercial propertyinvestment strategies coupled with and historically low interest rates and access to a cheap moneysupply culminated in events over the past 24 months.

There are lessons to be learned in terms of ensuring organizations have sufficiently robustrisk-management & assessment apparatus in place to mitigate the risk of a repeat of the currentfinancial crisis; however, a more thorough understanding of the dysfunctional dimensions of

organizational behavior is an imperative for organizations and more crucially, for HRD.Contemporary organizations are a complex and multi-dimensional construct in which membersshare an organizational identity, broadly defined as a process of interaction betweenorganizational members and senior management that serves to affirm who or what the

organization is and the individuals self-identification (Chreim 2002; Cornelissen, Haslam, and

Balmer 2007; Hatch and Schultz 2002; Herrbach 2006) that is influenced by the organization s

social construct of values, norms and beliefsits culture (Denison and Mishra 1995; Hatch 1993;

Schein 2004; Zheng, Qu, and Yang 2009). Hatch and Schultz (2002) argued that knowing how

organizational identity dynamics works helps organizations to avoid organizational dysfunction

(p.1014) with Zheng et al.,(2009) positing that organizational culture exerts its influence through

shaping the behavior of its members (p.3). These arguments are quite salient if it iscontextualized in terms of the international financial crisis that has impacted societies across theglobe.

The concept of dysfunctional organizational behavior is not a contemporary phenomenon,it has been examined and analysed from multiple perspectives over the past decade (seeBalthazard, Cooke, and Potter 2006; Bennett and Robinson 2000; Dellaportas, Cooper, andBraica 2007; Duffy, Ganster et al. 2006; Kets de Vries and Miller 1984; Lawrence and Robinson2007). Whilst the capacity for dysfunctional behavior among individuals/teams or withinorganizations is a concern for most senior management teams, the institutional / community /societal impact of the behavior has far wider reaching consequences. The Enron collapse is

perhaps the most cited and easily recognizable in terms of organizational failure as a result of

dysfunctional behavior. In the case of Enron, both agency issues and unethical / corrupt businesspractices were linked to the collapse of the company cited six times in Fortune magazine as

innovative company of the year (Stein 2007). Levine (2005) provides insight into how


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unethical and corrupt behavior was viewed by one of the executives at Enron, stating they viewed

rules differently than other people (p.727), this acceptance of rule bending became an

organizational norm, embedding in the organizational orthodoxy whereby organizational

members derived a certain pride in getting around the rules. Enron is a classic example ofdysfunctional behavior that led to the collapse of an organization; however, it is also perhaps avery good example of how social contagion can spread from individual to team and become

deleterious to organizational performance, development and survival. Mid-level managers,traders and professionals comprised the core of Enron (Werther 2003) and proclaimed themselvesto be the smartest guys in the room. Kets der Vries and Miller (1984) provided some insight on

organizational neuroticism that reflects the inner workings of Enron, they argued .theprevailing neurotic style can give rise to shared fantasies and permeate all levels of the

organization(p.22). In the aftermath of the Enron collapse the public outcry for more stringentand robustly enforced regulations led to the creation of The Sarbanes-Oxley Act (2002), a risk-

aversion intervention aimed at ensuring no repeat of the Enron story recent events illustrate that

symptomatic responses are limited in their effect.Regulations, rules and societal norms do not insure against dysfunctional organizational

behavior that has the capacity for institutional / societal reach, indeed as Werther (2003) argued,

in light of organizational failure, perhaps it is time to supplement legal and regulatory rules with

insights from organization theory and research (p.571). There is a significant opportunity forHRD to contribute to the managementof dysfunctional organizational behavior by examining theantecedents, influences, motivational dimensions and impact at individuals, organization,institutional and societal levels. It is unlikely that HRD interventions will remove dysfunctional

behavior from the organization; however, it can potentially reduce the risk of dysfunctionalorganizational behavior occurring and minimize the impact at an individual, organization andinstitutional level and negative outcome at a societal level when it does occur. The global effectof the financial & banking crisis provides a rare opportunity of HRD scholars and practitioners toaddress the crisis by focusing on the four primary practice areas of HRD: Organizational

Development (OD), Career Development, Learning and Development (L&D) and PerformanceManagement (Garavan 2007; Peterson 2008; Ulrich and Brockbank 2005) in pursuit ofdeveloping new theories that result in a more robust application of HRD interventions aimed atminimizing dysfunctional organizational behavior. The development of an organizational levelgovernance role that will augment the four key practice areas of HRD in ensuring sociallyresponsible behavior is the organizational rule rather than exception.

The purpose of this paper is to examine how SHRD can minimize the impact ofantecedents that have the capacity to influence, motivate and facilitate dysfunctionalorganizational behaviour. Whilst the literature on both SHRD and dysfunctional organizational

behaviour is vast and diverse in terms of definitions and context of the phenomenon beingexamined, this paper aims to provide a narrow focus using a multi-level analysis (Garavan,

McGuire, and O'Donnell 2004) of the relationship between SHRD and organizational antecedentsthat can influence dysfunctional organizational behaviour. This paper will examine and definerecent instances of dysfunctional organizational behavior in the context of the internationalfinancial and banking crisis, examine implications for individuals, organizations and society andreconceptualise the HRD framework through a dysfunctional organizational behavior lens.

Context:

The intellectual failure some argue is central to the global economic crisis (FSA 2009;Power 2009) may have a noticeable impact on how future risk-management interventions aredeployed and managed within the organization. The impact of the crisis is highlighted by

McSweeney (2009) who argues that extensive financial market failure precipitated andcontinues to perpetuate widescale economic and social problems(p.844) arguably, the

dysfunctional behavior may have been influenced by environmental factors as Kish-Geparts


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(2010) research suggest, antecedents in an individuals workplace environmenthadsimultaneous and significant unique impacts on either unethical intention or unethical behavior(p.15). The capacity of human resources to add to the sustained competitive advantage of theorganization is accepted; however, paradoxically, human resources are also capable ofcounterproductive work behavior (Levine 2010) which can have the opposite effect organizational/institutional failure.

In the context of the current international financial & banking crisis, property lendingteams [in Irish banks] were anecdotally guilty of reckless lending practices (Honohan 2009)despite economic indicators of a property bubble. Between 2003 and 2007 Irish banks

increased their borrowings from abroad by 50 per cent of annual GDP (Honohan 2008:3) in aneffort to compete with one another, loan to value (LTVs) ratios were increased, lending

standards and stress testing of loans were relaxed and the reckless lending practices became themodus operandi de jour. The procyclicality of bank lending behavior is well accepted (Berger andUdell 2004) but the excessively risky strategies were as Honohan (2010) argues, neither safe norsound and described as socially harmful risk-taking behavior. The lending practices engagedin by Irish banks were potentially hazardous to the organization but as the evidence shows,detrimental to the Irish economy as a whole. At an individual level, the leadership in many of

Irelands previously well respected banks had engaged in egregious activities that resulted inthe majority of those banks becoming nationalized (NAMA 2010). The behavior of seniormanagement in the Irish banks prior to their collapse is now viewed as ethically questionable andwas not in acting in the best interest of any of the stakeholders, indeed, the office of the directorfor corporate enforcement (ODCE) is pursuing legal advice and may prefer criminal chargesagainst many of the senior management in Irish banks. Leaders have a central role in developingand influencing organizational culture (Schein 2004), this was reflective of many of the Irish

banks who engaged in excessively risky strategies in pursuit of profits, Berson et al., (2008)argued that organizations that emphasize risk-taking and advantage taking behavior do so evenat the risk of stability and growth. This risk-taking strategy became a normative value with the

banking culture, not just in Ireland but in many of the banks prior to the collapse. If taking a risk

is viewed as a cultural value, excess risk taking may override rational decision making in whatSchein refers to as the cultural amplifier hypothesis (Schein 1994: 168).

In both the UK and US, dysfunctional organizational behavior may have contributed tothe failure of notable commercial/investment banks and insurance giant AIG; however, thedysfunctional behavior may have been more on the deviant scale as incentive structures may havemotivated individual and team investment strategies that were socially irresponsible (Levine2010) and may have existed within a culture or subculture that facilitated the behavior. Hackman(cited in Felps, Mitchell, and Byington 2006) elucidated group (team) members co-regulatetheir behavior through ambient and discretionary stimuli to elicit group uniformity, this

insight may illustrate how collective thought processes may have rationalized excessively riskylending practices in Ireland and ignored sound economic data in the US. The financial collapse in2008 of Lehman Brothers, AIG, Bear Sterns, Citigroup, Freddie Mac and Fannie May highlightsa number of common dimensions. Firstly, there was an overreliance on complex financial modelsto reduce risk exposure (an intellectual and learning & developmentfailure), secondly, there wasa degree of hubris among the senior management of many of these groups (a failure in leadershipdevelopment), finally, there may have been an excessive success culture (Probst and Raisch 2005)which exacerbated the failures (a cultural and organizational developmentfailure). The incentivestructures at the time of the collapse almost certainly contributed to the excessively riskystrategies and highlights agency issues prevalent in many organizations. In recent days, theannouncement by the SEC (2010) that it intends bringing a charge of fraud against GoldmanSachs and one of its vice presidents citing it acted deceptively and in a conflict of interest

with its clients relating to a collateralized debt obligation (CDO) related to subprime mortgagesagain illustrates failings at a leadership and organizational level. The charges by the SEChighlight agency or moral hazard issues many claim were central to how senior management,


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traders and brokers in US banks operated prior to the crisis; this was also a common featureamong senior management in Irish banks. These practices, if found to be true in a court of law areon the upper scale of dysfunctional organizational behavior defined as unethical or corrupt (Kish-Gepart, Harrison, and Trevino 2010).

The failure of the Icelandic banking systems was in many ways similar to that of Ireland,the three main banks accounting for approximately 85 per cent of the banking system (Thomsen

2008) collapsed in quick succession. The highly leveraged banks engaged in a foreign -fundedboom to expand abroad and accumulated assets of almost 900 per cent of GDP by end of 2007,

this was similar to the Irish banking failure, although not as exposed, the Irish banks engaged in aproperty speculative business model that was also negatively impacted by the global financialcrisis. The negative impact on both the Icelandic and Irish economies was also quite similar; bothcountries have experienced a dramatic decrease in the standard of living with Iceland going from

being one of the lowest indebted countries in Europe, to one of the must indebted advanced

countries in Europe (IMF 2008). Similarly, Ireland is experiencing a decreased standard of livingas a result of the bank lending behavior and lax regulatory enforcement (Barrett et al. 2010). Thedysfunctional behavior of senior leadership may have been in line with organizational objectives;however, the negative impact in terms of loss of output (GDP) and rising unemployment

highlights the central role HRD must play in developing tomorrows leaders and organizations toensure their behavior does not become socially irresponsible.

It is important to illuminate how individual and collective dysfunctional contagion canspread within the organization negatively impacting an organizationsability to achieve its goalsand objectives.

In notable cases of dysfunctional organizational behavior involving the banking &financial sector over the past decade, there is evidence that dysfunctional behavior can and doesresult in fundamental damage to the organization or its failure. The Socit Gnrale Fraud(Allen 2008) highlighted the fraudulent and deviant behavior by Jerome Kerviel which resulted inlosses of $7.2 billion (4.9billion). The Lehman Brothers collapse was argued to be the result ofa culture of hubris, imprudence, corruption and fraudulent behavior (Gaffney 2009;

Jameson 2009), the knock-on effect of the Lehman Brothers failure was at an institutional levelthat generated a contagion effect impacting other banking institutions. Schlich and Prybylski(2009) argue for the adoption of risk awareness culture in US banks in the aftermath of thefinancial collapse, this argument was echoed by Professor Patrick Honohan (2009) who calls for

banks [Irish] to renew and reform business models and their culture. Dysfunctional behavior inIrish banks is not a recent phenomenon, with reported cases of corruption and unethical

behavior (Knights and O'Leary 2005) that existed within a culture of unacceptable behaviorand practices (IFSA 2004) and most recently Irish bank failures have been blamed on lending

behavior that was questionably ethical and socially irresponsible. These examples ofdysfunctional behavior in the financial & banking sectors provide a solid basis with which to

pose the questioncan anything be done to reduce the impact of this behavior?The recent economic crisis demonstrates that dysfunctional organizational behavior has

the capacity for systemic failure that extends beyond the individual and organization and into thelarger societal landscape (Ely 2009; Federal Reserve System 2010; FSA 2009; Honohan 2009;IMF 2008; Power 2009). Kulik (2005) argued, agency culture was potentially as detrimental tocorporate America as it was to Enron (p.358), a wake-up call that may have been ignored byorganizational theorists. The question now remains can HRD interventions do anything tominimize dysfunctional organizational behavior in the post economic crisis landscape?

Literature Review:

The concept of dysfunctional organizational behavior provides for a multitude ofdescriptors, many of which are beyond the scope of this paper. The search criteria included butwas not limited to: Organizational Dysfunction, Dysfunctional Organizational Behaviour,Counterproductive Work Patterns, Dysfunctional Ethical Behaviour, Team Dysfunction,


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Management Dysfunction, Financial Collapse, Banking Failure and Workplace Deviant

Behavior using standard academic databases such as: Business Source Premier, Academic SourcePremier, Econlit, Web of Science and Web of Knowledge. From the results of the searches anumber of distinct themes emerged such as: Anti-Social Behaviour, Socially-UnderminingBehavior, Ethics, Corruption, Deviant Behavior and Dysfunctional Behavior. The search criteriawas not confined to S/HRD results, dysfunctional organizational behavior is present at individual,

team, organizational and institutional levels and the search criteria was designed to capture this.Within this paper, the term dysfunctional organizational behavior will refer to any behavior thatis counterproductive to organizational performance, development or long-term viability.

Defining Dysfunctional Organizational Behavior:

Dysfunctional organizational behavior is observable on a number of levels, it exists at theindividual, organizational and institutional level and the impact of dysfunctional behavior canrange from a mere annoyance to organizational destruction.

Individual / Team Level Dysfunctional Behavior

At the individual/team level of analysis, a number of notable papers identify the negativerole anti-social behavior, socially-undermining behaviour, deviant behavior, abusive supervisionand unethical behavior can have on the organization. There is however, some overlap in terms ofdysfunctional behavior that resides within all levels of analysis, e.g. morally questionable

behavior and unethical intention / behavior (Kish-Gepart, Harrison, and Trevino 2010) andorganizational wrongdoing (Palmer 2008). While the definitions are diverse, there are moresimilarities than differences (see Duffy, Ganster et al. 2006; Griffin and Lopez 2005; Mitchelland Ambrose 2007). Griffin and Lopez (2005) defined bad behavioras any form of intentional

behavior that is potentially injurious to the organization and/or individuals within theorganization (p.988) with Duffy et al., (2006) arguing that socially-undermining behavior is

intended to hinder over time an organizational members ability to maintain a positive andsuccessful work-related reputation. Individual behavior is reflective of organizational cuesandthe behavior of other colleagues and supervisors could arguably indicate a cultural or subcultureenvironmental influencing force.

In their study of the negative consequences of abusive supervision, Tepper et al., (2008)found that workplace norms play a moderating role in organizational deviance (p. 729). Theyargued that abused subordinates withdraw and should experience less affective commitment tothe organization (p.722). The impact of withdrawal and reduced commitment to the organizationin terms of positive organizational citizenship behavior (OCB) can have a bottom-line affect onorganizational efficiency, productivity and development. Cole et al.,(2008) posited dysfunctionalteam behavior is any observable, motivated behavior by an employee or group of employees thatis intended to impair team functioning (p.945) with Litzky et al., (2006) identifying social

pressures to conform (p.94) as antecedents of dysfunctional behavior. The darker side ofleadership behavior (Resick et al. 2009) illuminates a narcissistic personality characteristic thathas the capacity through pervasive patterns of grandiosity, to spread throughout theorganization and influence organizational cultural norms and behavior. Indeed, there areexamples of narcissistic behavior in some of the banking collapses and near collapses. Theformer head of Allied Irish Banks plc (AIB) Eugene Sheehy was famously quoted as saying[AIB] would rather die than raise equity, this comment was in relation to AIBssolvency - thisstatement was reversed within weeks with the Irish government now a majority shareholder in the

bank.


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Within the literature on counterproductive organizational behavior, Levine (2010)succinctly illuminates the negative effect of counterproductive behavior on the organization[Arthur Andersen], he argued counterproductive behavior by the individual was a critical

dimension of organizational success or failure, more importantly however, were his remarksabout counterproductive behavior being permitted or encouraged by the organization (p. 4). Levine defined counterproductive work behavior (CWB) as actions or behavior taken by a

substantial number of organizational members throughpolicies or norms that the organizationeither intentionally overlooked or implicitly or explicitly encouraged that adversely affected

customers, competitors, government agencies and entire nations (p.6).The influential role of leadership should not be underestimated when examining

dysfunctional behavior, as Prati et al., (2009) posit leaders develop quality relationships withorganizational members and can influence norms and guide behavior (p.411). It is thisdysfunctional behavior that may have metastasized into organizational level and institutionallevel dysfunction. The failure of Freddie Mac and Fannie May in the US was predicated on adestructive race(Timiraos 2010) to lower lending standards in an attempt to compete with WallStreet banks. Ultimately, poor management and lax regulation were identified as central to thefailure of these banking institutions; this was also true of the banking crisis in both the UK and

Ireland.

Organizational Level Dysfunctional Behavior

There are numerous definitions of dysfunctional behavior at an organizational level withinthe literature with Lange (2008) defining organizational corruption as the pursuit of individualinterest by one or more organizational actors through intentional misdirection oforganizational resources or perversion of organizational routines. Levine (2005) howeverargues that corruption entails a higher end, something more than increasing ones personalwealth, there must be a perversion of public trust. In examination of the current crisis, it isapparent, that Levines proposition holds true. Indeed, there are striking similarities between the

collapse of Enron in 2001 and events that led up to the current financial crisis. Deregulation in theenergy market led to an elimination of norms in terms of legally imposed limits, there was , asLevine argues, a general acceptance of treating accounting practices (in the case of Enron) asrules to get around. During the current economic crisis, a similar organizational culture emerged,one of engaging in unethical behavior (Kish-Gepart, Harrison, and Trevino 2010) not at anindividual level but at an organizational level. In terms of the current economic crisis, this

behavior could be categorized as counterproductive to organizational survival. At anorganizational level, Levine (2010) defined counterproductive behavior as actions taken by asubstantial number of organizational members that adversely affects customers, competitors,

government agencies and even entire nations. In light of the global economic crisis and financial

cost, counterproductive behavior at an organizational level may have had an impact at aninstitutional and macro-institutional level. Investment teams within US banks dealing withsubprime mortgages and securitized products such as CDOs knowingly and intentionallylabelled high-risk investment products as low-risk products with the aid of ratings agencies suchas Moodys and Standard & Poors who colluded in the deceptive practices.

The proclivity of banks to engage in risky strategies that were unsound and incontravention of their fiduciary responsibilities highlights what Palmer (2008) refers to ascollective wrongdoing, defined as behavior perpetrated by organizational officials (i.e.,directors, managers, and / or employees) in the course of fulfilling their organizational roles

judged by social control agents to be illegal, unethical or socially irresponsible (p.107). Corruptorganizational behavior Pinto et al., (2008) posit, is when a group of employees carries out

corrupt behaviors on behalf of the organization, this is primarily a top -down phenomenon(p.689) that benefits both the organization and the dominant coalition. It is important to notethat external environmental factors such as regulations, shareholder pressure and analysts


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expectations may have influenced the collective dysfunctional behavior in US, UK and Irishbanks. The violation of organizational rules such as prudent risk assessment and loan stresstesting may have been in pursuit organizational goals and as Lehman and Ramanujam (2009)argue, rule violation is higher when the expectation that regulatory enforcement is low. Initial

evidence from the current financial crisis would support this position. What led so many financialand banking institutions to engage in this type of dysfunctional behavior? The procyclicality of

bank lending behavior (Berger and Udell 2004) explains only the mechanics behind lendingpractices in the banking industry and its relationship to the business cycle it does not fullyexplain the irrational behavior of banks at an organizational level or institutional level.

Rational behavior gave way to irrational exuberance and overreliance on complex riskmodels, there was as Krugman (2009) argues, a romanticized and sanitized view of theeconomy that led economists to ignore bubbles and bust cycles, this myopic perspective spread tothe financial & banking institutions with devastating consequences. What is interesting about thecurrent economic crisis is the institutional level of dysfunction which was not contained withinthe financial & banking institutions but existed on a macro level and included government andthe regulators.

Institutional Level Dysfunctional Behavior

The benefit of the institutional level of analysis is that it takes a systemic or aggregateperspective of organizations, i.e.: financial & banking organizations, insurance organizations,accountancy & auditing practice and their interaction with for example: government agencies,financial regulators, auditing firms. This level of analysis according to Dimaggio and Powell(1983) is that it directs our attention to not just the inter-organizational interaction but to thetotality of relevant actors (p.148). In examination of the current economic crisis, it would seem

an appropriate level of analysis to view dysfunctional behavior on a macro scale given themimetic isomorphic pressure on banking institutions to seek legitimacy among other bankinginstitutions in what became a race to the bottom in terms of lending behavior and investment

strategies. Institutional level dysfunction has been defined by Misangyi, Weaver, and Elms(2008) as misuse of a position of authority for private or personal benefit with Venard andHanafi (2008) arguing that corruption in financial institutions relies on transgressions of legalnorms. Both of these definitions provide insight into corruption as a dysfunctional behavior thatcan be applied at an institutional level; however does not fully capture the macro dimensions thattypify the current financial crisis. Nielsens (2003) definition on the other hand, illustrates themacro dimensional reach of institutional corruption that was evident in the international financial& banking crisis. Nielsen argued corruption at an institutional level was characterized as sub-systems of corruption that extend beyond geographic, socio-political and political-economicsystems. This is perhaps the most accurate description of institutional level corruption that

applies to the current economic crisis.The macro-prudential interconnectedness of the global financial system manifested in a

contagion effect that spread from bank to bank as they questioned their exposure to the subprimemarket following the collapse of Lehman Brothers in September 2008. What is interesting from aHRD perspective is the herding behavior that senior management engaged in at the largest UScommercial and investment banks. Rajan (2005) argued that because [investment] managerscompensation relates to returns, there is a greater incentive to take risks (p.316). The behaviorof their peers was also cited as a dimension that provided insurance against underperformance

an institutional culture influence of sorts? This prescient argument resonates in the mostvisceral way in light of the US banking collapse in 2008-2009. When Lehman Brothers collapsedit started a contagion effect among US investment banks which then spread globally, severely

impacting and prolonging recovery from the recession. It also highlights how bank behavior issometimes not based on sound business decisions but those of the herd.In the case of the Irishbank AIB, aggressive lending practices by a competitor Anglo Irish Bank pushed AIB to relax


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its lending standards (Kenna 2010). Levinson (2009) provided some insight into how seniorexecutives in US banks made decision on their investment strategies, Chuck Prince ex-CEO ofCitigroup was quoted by the Financial Times as saying when the music stops in terms ofliquidity things will be complicated but as long as the music keeps playing, we have to dance.The admission by the ex-CEO of one of the largest banks that collapsed in the crisis provides astark reminder that despite evidence to the contrary, their decision making can be based on little

more than neuroticism (Kets de Vries and Miller 1984). Venard and Hanafi (2008) illustrate theisomorphic nature of organizations at an institutional level, they argue that similarity is the resultof organizations quest to attain legitimacy within their environment(p.484). This institutional

level dysfunction is evident in the financial and banking institutions affected by the currenteconomic crisis. Competitive isomorphism within the financial and banking sector illustrates the

pressure toward similarity resulting from market competition; an example of this was the practiceof a large portion of US banks to engage in the business of selling securitized products broughtabout by pressure from their competitors. The inability or complacency of the financial regulatorin the US, UK or Ireland to enforce financial regulations may have stemmed from not wanting toalienate powerful constituencies in the process of rule enforcement (Lehman and Ramanujam2009: 649).

In Ireland, there was a similar mindset in operation, however, the focus was on theproperty market and not securitized products. Competition among banks in the commercialproperty market may have fuelled their risk appetite to a point where their lending decisionsexposed them to potential failure Canoy et al., 2001 (cited in O' Sullivan and Kennedy 2007).This embedded risk culture may have prevented banks from recognizing or understanding theiroverexposure, this type of behavior was, with hindsight, injurious to the organization (Griffin andLopez 2005) but more crucially, injurious at an institutional level. In both the Irish case andinternationally, regulatory bodies were operating in a complacent and permissiveway with alight touch regulatory approach (Honohan 2009), the UK was no different, in the UK theFinancial Services Authority (FSA) concluded that there were deficiencies in supervision andan opaque understanding of the macro-prudential characteristics of the financial and banking

sector (FSA 2009) that contributed to the banking failure there. Nielsen (2003) argued thatcorrupt sub-systems quite often choose to ignore the dysfunctional behavior because of theircompromised positions. An example of this in the Irish context is the close relationship

between senior management in Irish banks and the regulators office in which annual growth of 36per cent in Anglo Irish Bank failed to attract the attention of the regulators office, Central Bank orDepartment of Finance (O'Halloran 2010).

This socially irresponsible behavior has had a detrimentally negative effect on society andillustrates the very worst outcome as a result dysfunctional organizational behavior. In monetaryterms, the dysfunctional organizational behavior is expected to be in the region of $11 trillion USand the impact on the Irish economy is thought to be in the region of 75 - 80 billionwith aglobal loss in economic output estimated at US$200 trillion (Hannon 2010). The human costs aremuch higher with organizations failing or significantly reducing their workforces as a result ofthe dysfunctional behavior. Unemployment levels globally have risen sharply resulting inemigration from the worst affected economies with the knock-on effect of prolonged recoverythat may last for a number of years. The announcement by the SEC of pursuing Goldman Sachsand one of its vice presidents on a charge of fraud illustrates the institutional effect ofdysfunctional behavior. Following the announcement, Goldman shares plummeted 13% wipingout US$12 billion in shareholder wealth with a knock-on effect in other major banks such asJPMorgan Chase, Morgan Stanley and Citigroup who lost between 3% - 5%.

In the context of this paper, we define dysfunctional organizational behavior as beingbehavior that has the capacity to negatively affect the well-being of the individual, team and/or

organization in terms of psychological safety, positive affective organizational commitment andorganizational development and has potential for organizational, institutional and/or societalreach that is potentially harmful.


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Author Dysfunctional Behavior

(I ndividual / Team Level)

Definition

Duffy et al.(2002); Duffy et al. (2006a);Duffy et al.( 2006b);

Social Undermining behavior intended to hinder, over time, a workers ability to establish andmaintain positive interpersonal relationshipsfavourable reputations

Berry et al.(2007); Brown and Trevino(2006); Diefendorff and Mehta (2007);Dunlop and Lee (2004); Flemming andZyglidopoulos (2007); Glomb and Liao(2003); Griffin and Lopez (2005); Judge etal.(2006); Lawrence & Robinson (2007);Litzkey et al.(2006); Robinson & Bennett(1995); Palmer (2008)

(Bad Behavior) Deviant behavior; Aggressivebehavior; Anti-social behavior2Organizational Wrongdoing

...any form of intentional behavior that is potentially injurious to the organization

and/or individuals within the organization

voluntary behavior that violates organizational normsthreatening thewellbeing of the organization or its members

2behavior perpetrated by organizational officials (i.e., directors, managers, and

/ or employees) in the course of fulfilling their organizational roles judged by socialcontrol agents to be illegal, unethical or socially irresponsible

Tepper et al.2008 Negative effect of Abusive Supervision .. organizational members will experience less affective commitment to theorganization (p.722)

Cole et al.2008; Felps et al.(2006) Dysfunctional Team Behavior any observable, motivated behavior by an employee or group of employees thatis intended to impair team functioning (p.945)

Author Dysfunctional Behavior

(Organi zational L evel)

Definition

Levine (2010) Counterproductive organizational behavior actions that adversely affect customers, competitors, government agencies, evenentire nations taken by a substantial number of organizational members, and the

organization through its policies or norms permits, intentionally overlooks or

encourages such actions either explicitly or implicitly

Ashforth et al.(2008); Kish-Gephart et al.(2010); Pinto et al.(2008); Pfarrer et al.(2008)

1Unethical intention 2Unethical Behavior /3Corrupt Behavior

1the expression of ones willingness or commitment to engage in an unethical

behavior 2any organizational member action that violates widely accepted

(societal) moral norms (p.2) 3in which a group of employees carries out

corrupt behaviors on behalf of the organization

Van Fleet and Griffin (2006); Guerra et al.(2005); Lehman and Ramanujam (2009)

Dysfunctional Organizational Culture ..one that constrains or limits individual or group-level capabilities or thatactually encourages and rewards mediocre individual- and group-level

performance(p.699)

Lange (2008) Organizational Corruption the pursuit of individual interest by one or more organizational actors throughthe intentional misdirection of organizational resources or perversion oforganizational routines

Author Dysfunctional Behavior(I nstitutional Level)

Definition

Misangyi et al.(2008) Institutional Corruption misuse of a position of authority for private or personal benefit

Venard and Hanafi (2008) Corruption in Financial Institutions .relying on transgression of legal norms .behavior by public officials that deviates from accepted moral standards2

Neilsen (2003) Corrupt Networks .systemic sub-systems of corruption that extend beyond geographic regions andsocio-political and political-economic systems

1Nye (1967)

2Brooks (1970)


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Re-conceptualizing the strategic HRD framework

Over the past number of years strategic HRD has been extensively examined andconceptualized (see Ardichvili and Jondle 2009; Budhwar and Sparrow 2002; Garavan 2007;Garavan and McCarthy 2008; Garavan, McGuire, and O'Donnell 2004; Lengnick-Hall et al.2009; McGuire et al. 2007; O'Donnell et al. 2007; Peterson 2008), with the focus being on

presenting models or frameworks that depict how various interventions provides for positiveimpact and potentially contribute to sustained competitive advantage through utilization of theorganizations human intellectual capital. There has been little by way of examining HRDdimensions / interventions through a dysfunctional organizational behavior lens. The proposedframework illustrates organizational capacity for dysfunctional behavior through HRDinterventions, the behavior may be the bi-product of environmental and socio-environmentalconditions and in examination of these potentially negatively impacting organizational behaviors.The authors have provided linkages illustrating the negative impact on and influence of HRDinterventions as well as indicating the degree of impact using the levels of analysis approach. Theframework proposes a new level of HRD intervention primarily aimed at acting as a safeguard forthe organization. In the new economic environment, HRD will need to adopt the role of

organizational governance and agency mediation control to ensure agency culture (Kulik,O'Fallon, and Salimath 2008; Kulik 2005) does not result in negative organizational and societalimpact but also to ensure the organizational culture remains a positive dimension and does notturn toxic or dysfunctional.

The framework provides an analysis of how HRD interventions have a potentiallynegative impact on organizational behavior which has a resultant knock-on effect / impact onSHRD goals & objectives. The conceptual framework highlights areas for further study in termsof how SHRD interventions influence dysfunctional organizational behavior.

At level 1 of the proposed conceptual model, the primary unit of analysis is on individualdysfunctional behavior that is influenced by HRD interventions and/or has a negative impact onHRD interventions. Bad behavior and socially-undermining behavior (Duffy, Ganster, and

Pagon 2002; Duffy, Ganster et al. 2006; Duffy, Shaw et al. 2006; Griffin and Lopez 2005) couldpotentially be influenced by organizational culture/subculture. Griffin and Lopez (2005) arguethat a once talented and hardworking employee may engage in activities deemed to be bad or

dysfunctional if he / she were moved to a new group / team whose norms were incongruent tohis/her own, that employee may engage in dysfunctional behavior directed at the new teammembers or may embrace the team behavior and engage in dysfunctional behavior toward theorganization. Eden and Spender (1998) provide a rich analysis of the tension between the socialand systemic dimensions of cognition and the individual who acts within that social context,eventually becoming an autonomous member whose actions reflect the realityof that universe(p.33), this cultural backdrop has the ability to influence not just the cognition of the individual

but that of the collective. When we examine the impact of this behavior on HRD interventions, itis reasonable to argue that this type of dysfunctional behavior can have a negative impact onHRD interventions such as: building organizational trust, open communications, psychologicallysafe environment and commitment to perform. If dysfunctional organizational behavior such asabusive supervision (Mitchell and Ambrose 2007; Tepper et al. 2008) is ignored by seniormanagement because organizational goals and objectives are being met, it may create hostilityand result in what Mitchell and Ambrose refer to as displaced deviant behavior directed at theorganization, in turn the behavior may negatively affect how other employees perceive the

psychologically safe environment and also have a negatively impact both OCB andorganizational performance & development.

Concepts such as a culture of learning and organizational culture have the potential to

influence dysfunctional behavior such as have been described at an individual level. Thisbehavior can then snowball and infect the team or organization (Ashforth et al. 2008). In theproposed model we illustrate the potentially influencing relationships through a dysfunctional


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lens identifying how the behavior may manifest and the impact of that behavior on HRDinterventions such as those described in Figure 1. Providing interventions that address howdysfunctional behavior is influenced, motivated and facilitated at an individual level is a criticalfirst step in addressing how dysfunctional behavior can embed and spread at an organizationaland institutional level.

Werbel and Balkin (2009) argued that at an organizational level, performance rewards

aimed at employees who achieve and exceed goals and objectives through misconduct sends aclear symbolic message, it legitimizes the behavior. Further, employees engage in a process of

rational choices where the employees weigh up the opportunity gain from the reward/incentiveagainst the fear of being caught (performance assessment). The thrust of the paper illuminatedhow HR practices can potentially influence misbehaviour from an individual bottom-up

perspective; it does not address the behavior from a systemic perspective. Ashforthet al., (2008)contend that corruption as a dysfunctional behavior is both a state and a process, engaging ina symptomatic response is limited as it fails to address the complexity of the interconnections,furthermore, in their analysis of organizational corruption they argued that the corrupt behavior ofthe individual can spread like a virus (p.671). Moreover, if the actions of the individual are leftunchecked they can spread to other individuals and magnify in scope and audacity , potentially

impacting at an organizational and institutional level. What is clear from the research is thatindividual actions of dysfunctional behavior are rarely contained and can influence the behaviorof others, organizational learning and socialization is particularly susceptible in acting as aconduit for this behavior to be transmitted throughout the organization. If one examines how newEnron employees were socialized into its culture it becomes clear that the processes ofsocialization of corrupt and unethical work practices were an organizational norm that was thevision or organizational identity developed by senior leadership.

Level 2 / Level 3 of the proposed conceptual model examine the organizational /institutional level and antecedents of influence on dysfunctional behavior. Arguably, SHRD inputvariables such as: alignment with organizational goals, commitment to improving performanceand capacity for strategic engagement (Garavan 2007; O'Donnell et al. 2007; Peterson 2008) are

essential dimensions that potentially facilitate sustained competitive advantage. Theseinterventions however, can also influence dysfunctional behavior, a point illustrated by Palmer(2008) who suggested subtle rewards and punishments, moulded attitudes and behaviors definedthe situation (p.122), perhaps an indication of how influential cultural, social and environmental

cues are in dysfunctional organizational behavior. Dysfunctional behavior is not confined toindividual or teams, it has also been shown to originate in organizational leadership (Van Fleetand Griffin 2006) and become contagious (Godkin and Allcorn 2009), toxic (Goldman 2006)and counterproductive (Harvey and Martinko 2006). In the future organizational landscape,strategic HRD may need to assume a more moderating role, one that recognizes that forming andmaintaining strategic partnerships and capacity for strategic engagement should be in the bestinterest of not just the organization but society as well.

Alignment with organizational goals/objectives and a strategic perspective may be linkedto dysfunctional behavior that is symbolically accepted by the organization (Werbel and Balkin2009). These objectives can be a moderator in dysfunctional team behavior and deviantworkplace behavior which can negatively impact HRD interventions such as commitment to

perform, capacity for trust and organizational learning & socialization. This level has the capacityto reinforce individual level dysfunction but also infect a supra-organization level (societal) thathas the potential to have detrimental impact at an institutional and societal level.

Environmental factors both internal and external have been shown to influencedysfunctional behavior within the organization (see Balthazard, Cooke, and Potter 2006; Gelfand,Leslie, and Keller 2008; Goncalo and Duguid 2008; Harrison, Ashforth, and Corley 2009;

Linnenluecke and Griffiths 2009), a point clearly made by Chreim 2002 cited in (Prati,McMillan-Capehart, and Karriker 2009) arguing, the more a member views the organization asthe embodiment of his or her own self, the stronger the identification and higher the cognitive,


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emotional and behavioral components (p.411). It is difficult to divorce dysfunctional behaviorfrom organizational culture as individuals behave in ways that are consistent with group norms,values and beliefs, there are as Gregory et al.,(2009) argue, behavioral expectancies that dictatethe way employees behave consistent with their cultural beliefs (p. 674). In a similar tone,

Gelfand et al.,(2008)posited that dominating conflict cultures will be more prevalent in highlycompetitive industries whereby the highest value is placed on coming out ahead or beating the

competition (p.149). This type of cultural backdrop reflects an environment that is neitherconducive to nor facilitative of an operationally sound organization. Moreover, HRDinterventions in terms of creating and maintaining strategic alliances with all organizationalstakeholders and managing organizational knowledge and a culture of learning is paramount as afirst step in ensuring organizational capability does not become organizational incapacity.

This level of analysis is perhaps the most critically important, although organizationalculture may influence individual behavior, as Ashforth et al (2008) alluded to, people canengage in [dysfunctional] practices as a result of immersion in, and socialization into the social

and cultural environment of a corrupt organization. In examination of the institutional andsocietal impact of the global financial crisis 2008-2009, there are indications that incentivestructures may have influenced some of the reckless behavior, both in Ireland, UK and US

(Levinson 2009; McSweeney 2009; Schlich and Prybylski 2009; Federal Reserve System 2010;Greenfield 2010; Honohan 2010). There are also indications that organizational leadership washighly influential in infecting the behavior of organizational members at a toxic and disruptivecapacity and further indications that reckless lending practices and investment strategies existedwithin an agency culture (Kulik, O'Fallon, and Salimath 2008) that contributed to the collapse ofso many well respected organizations. We propose a new role for HRD in light of the globalfinancial & banking crisis. In this new role, HRD will assume an Organizational Governance andAgency Mediation Control mandate. This responsibility should be to sit at board level and

provide insight to senior management and executive level personnel on organizationaldimensions that are not visible but can have a significantly negative impact on organizationaldevelopment and survivalculture & socialization. This new role will also provide HRD with a

place at the table and a more influential position in developing organizational goals andobjectives rather than implementing them through the organizations human intellectual capital.

The desire for HRD to become strategic partners to the business and aligned withorganizational goals/objectives can potentially lead to instances of dysfunctional organizational

behavior in pursuit of profit. The impact on HRD is a potential reduction in organizational trust,questionable contribution to stakeholder value and short-term performance gain at the expense oflong-term viability.


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Table 4: SHRD perspectives with negative effect and levels of analysis impact

Author SHRD Intervention Negative Effect of Interventions

(Dysfun ctional Behavior)

Levels of Analysis Impact

Ulr ich 1998 Strategic partner with managementEmployee ChampionBusiness AcumenFacilitate organizational transformation

Socially-Undermining Behavior Individual / Team

McCracken & Wallace 2000 Help shape organizational goals & objectivesFormulate HRD plans & policiesPartnership with management & HRMInfluence culture

Dysfunctional Organizational CultureAbusive Supervision / Workplace DevianceCounterproductive organizational behavior /Unethical Behavior / Organizational wrongdoing

Individual / Organization / InstitutionalIndividual / OrganizationOrganization / Institutional

Ulr ich & Brockbank 2005Environment scanningDevelopers of Business StrategyEmbedded with senior managementHuman capital developers / Strategic partners /Functional Experts

Dysfunctional team behavior / Dysfunctional cultureWorkplace deviance / Dysfunctional cultureUnethical Behavior / Dysfunctional culture /Organizational wrongdoing

Organization / Institutional

Individual / Organization / Institutional

Boudr eau & Ramstad 2007 Impact / Effectiveness / EfficiencyTalent pools / Manage resources & processes /Sustainable strategic successHuman intellectual capital (capacity)

Abusive supervision / Workplace deviance /Dysfunctional team behavior / DysfunctionalCultureDependent Organization Disorder / DysfunctionalCulture



Garavan 2007 Strategic OrientationSHRD Strategies, Systems & PracticesUnderstand / Manage firm cultureStrategic partnership with senior management

Workplace deviance / Dysfunctional team behaviorWorkplace deviance / Dysfunctional team behaviorCounterproductive / Unethical behavior /Organizational Wrongdoing

Individual / OrganizationIndividual / OrganizationIndividual / Organization / InstitutionalOrganization / Institutional

Peterson 2008 Climate of supportCulture of LearningCapacity for Strategy / commitment to performAligned with Mission / LeadershipBusiness acumen / strategic perspectiveForge relationships / create HPWS / developaccountability

Workplace deviance

Dysfunctional team behaviorDysfunctional organizational cultureCounterproductive organizational behavior /Organizational wrongdoing

Individual / Organization

OrganizationOrganizationOrganization / InstitutionalOrganization / Institutional


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Figure 1:


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Implications for Theory

The academic community have contributed significantly to understanding dysfunctionalorganizational behavior from multiple perspectives. Analyzing dysfunctional organizational

behavior using a multi-level perspective provides a micro, meso-macro, macro analysis of the

impact of this behavior. The proposed model allows for analysis of HRD interventions through adysfunctional behavior lens illustrating the impact at a multi-level perspective that includesinstitutional and societal impact. As the study of HRD is concerned with systems, processes and

procedures that utilize human intellectual capital in pursuit of organization goals/objectives withthe ultimate aim of achieving sustained competitive advantage, it is in imperative that as scholars,we understand the systemic nature of dysfunctional organizational behavior and the toxicity inwhich many organizations immerse themselves.

There are divergent thoughts on where the role of HRD lies; is it confined to primarilyorganizational level interventions or is it responsible at all levels up to, and including nationallevel. The events of the past 24 months should illustrate that HRD interventions and the study ofHRD should be focused at the organizational level with an understanding of the institutional and

societal impact of those interventions. This multi-stakeholder perspective provides the contextualbasis for future abstractions of HRD interventions that may ensure against future organizationalfailures of the magnitude witnessed in the international financial & banking crisis.

Future study of S/HRD should perhaps look beyond the systems thinking that seems to bepervasive in the research and look to analysis through a behavioral or rational choice theory lensin conjunction with the resource-based view (RBV) of the firm when considering futuredevelopments in S/HRD. It is an imperative to understand the behavioral and cognitivedimensions of organizational behavior as the recurrent them in organizational dysfunctional

behavior is not the systems, process or proceduresit is the human element.

Implications for Practice

The role of HRD professionals in the organization is a multifaceted and multidimensionalrole that interfaces with senior management, middle management and team leader / line mangersas well as organizational members on a daily basis. The ability to be cognizant of, and address theneeds of organizational stakeholders is a daunting task. As credible partners in the business, HRDis expected to provide a role of consultancy to senior management, balance realistic expectationsof stakeholders, implement strategies aimed at achieving organizational goals and objectives, be

positive change agents, develop management and leadership skills, provide career developmentinterventions, manage organizational culture and ensure organizational development remains acore function. This is a tough job.

In light of the current financial & banking crisis, the role of HRD will now need to shiftsomewhat, it will need to take a more proactive role in the development, implementation andmanagement of the new mandate of corporate social responsibility agents. In the proposed model,we argue that the creation of an Organizational Governance & Agency Mediation Control role isan imperative in fully addressing the short-comings that were present in the current economiccrisis. This new role will see HRD take an active role at board level acting in an advisorycapacity to the board, providing insight into cultural dimensions of the organization, this role willalso allow the professional body tasked with developing the organizations human resources to actas an objective intermediary between senior management and the organization to ensurecorporate social responsibility is a key feature and applied in practice not just theory.

The impact of the international financial & banking crisis has had a significantly negative

impact on many organizations and society. In the new ear, HRD professionals will need toexpand their role beyond traditional dimensions of organizational development, careerdevelopment, learning & development and performance management to consider the wider


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impact human resources have on the organization and society. At a strategic level, HRD will needto fully understand the implications and impact (positive & negative) of organizational goals andobjectives and may need to develop the ability to say no, when and where required. Thedevelopment of trust and credibility of HRD will have a much wider focus in future withinstitutional and societal measurements of delivery.

Conclusion:

This paper adds to current theory in a number of ways. Firstly, the paper provides ananalysis of HRD interventions through a dysfunctional organizational behavior lens, to the best ofour knowledge; this has not yet been done. Secondly, it proposes a conceptual framework ofHRD interventions that have the capacity to influence dysfunctional organizational behavior andfinally, suggests a new mediating role for strategic HRD in a new economic landscape that willact as organizational level governance interventions aimed at averting socially irresponsible

behavior from impacting at an organizational, institutional and societal level.Ulrich and Brockbank (2005) apply a metaphor to highlight the strategic role of HRD in

the organization suggesting that HR should be in the game not just at the game ; however, this

allegory may need to be re-conceptualized as being in the game may increase the risk of socialcontagion in terms of dysfunctional organizational behavior which may have been a contributoryfactor in the failure of the international financial and banking sectors. Godkin and Allcorn (2009)argued that a contagion perspective speaks to unconscious but shared interpersonal and group

dynamics (p.485) so arguably then, strategic HRD will need to become referees of the game,acting impartially in the best interest of all organizational stakeholders whilst also ensuring

strategic disengagementfrom management ideology or organizational orthodoxy if it is required,in order to act in the best interest of the stakeholders at an organizational, institutional and

societal level. The role of architects now takes on a new perspective for HRD in the posteconomic crisis landscapeas theorists the objective is in analyzing how HRD interventions mayhave facilitated the failures and as practitioners, the focus is on looking to rebuilding

organizational capacity, human intellectual capability and perhaps most importantly - trust andcredibility. The proposed organizational governance and agency mediation control dimension ofHRD may provide a foundation in restoring credibility and trust of all stakeholders, internal to theorganization and also externally. The macro-dimensional reach of dysfunctional organizational

behavior extends beyond the firm as failures of large organizations have a knock-on societalaffect.

If leadership sets the behavioral tone of organizational behavior as Godkin and Allcorn(2009) argue, then HRD will need to help set a new organizational tune. The global financialcrisis has implications for how HRD evolves and positions itself in a new economic reality. IfHRD are to become strategic agents for the organization in the new global environment, HRDwill need to recognize potentially disruptive dysfunctional organizational behavior antecedents,implement interventions aimed at minimizing the impact on the individual, organization &society and build organizational trust and credibility by adopting a new OrganizationalGovernance & Agency Mediation Control mandate. HRD will need to become more thanstrategic in thought and rhetoric; HRD will have to become strategic in its delivery. Therequirement for the organization to conform to societal and legal norms should not result in acheck-list approach to adherence, the development of an embedded organizational culture thatis risk-aware and cognizant of the potential for negative societal impact from dysfunctionalorganizational behavior should notbe window dressing but should be interwoven intothe veryfabric of how the organization operates (Ashforth et al. 2008). As HRD scholars and practitionersit is our responsibility to ensure socially responsible behavior is the outcome of our interventions

and not dysfunctional organizational behavior. Trust and credibility should be the mantra andguiding principle of HRD interventions is the new post-crisis economic landscape.


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