This case is aboutÂ ORGANIZATIONAL STRUCTURE
PUBLICATION DATE: April 01, 2004
Hidden Costs of Organizational DishonestyÂ Case Solution
Businesses deploying dishonest approaches toward customers, suppliers, vendors, and others typically do so to increase short term gains, and in that respect they might succeed. But the misconduct probably will fuel social emotional processes within the organization that have the prospect of ruinous financial outcomes, outweighing short term increases. There are three kinds of impacts to organizational dishonesty: reputation degradation, (mis)matches between worth of employees and the organization, and increased surveillance. These results can lead to decreases in repeat business and job satisfaction–and increases in worker turnover, employee theft, and other hidden costs.
These results will, like tumours, spread and eat increasingly at the organization’s well-being and vigor. They are going to also be challenging to identify through typical accounting methods and might lead to corrective efforts that overshoot the true causes of poor productivity and profitability. Without a comprehensive understanding of the three types of results, an organization could make an effort to command one financial hemorrhage (for example, losses from employee theft) by creating another (specifically, investments in increasingly expensive security systems).