Chapter 1

The Perverse Organisation

The idea of perversion conjures up many images of dark and sinister practices; evil and sadistic; masochistic and filled with secret lust; trespass into forbidden places, dungeons and hidden lairs; not a part of everyday life. Yet, small perverse acts and intentions are a constant part of the social psychological landscape. There is the sadism of the office bully who gains pleasure from the discomfort of others; the fetishistic attraction of consumerism and commodification, with their endless quest for more, never quite satisfying so rapaciously creating new and better markets; the suicidal backdrop of substance abuse and workaholism, out of control; and the voyeuristic pleasures found in the culture of celebrity which acts as a substitute for real intimacy. Good and bad, the presence and effects of perverse dynamics are an integral part of our culture and imbued within our working lives. This book will examine the nature of perversity and its presence in collective corporate and organisational life.

There is evidence of a movement from a culture of narcissism toward elements of a perverse culture. This book will bring forth and examine that evidence as it reveals itself through one of the major institutions of our time - the work organisation. Corporations and organisations for work, production and service are major centers of social activity. In many senses they provide a critical source of identity for their members, just as do families and religions. Their examination gives access to most of the dynamics operating within our society and reveals some of the deeper assumptions upon which our lives are based. To call them simply a reflection of human social organisation and proclivity, perhaps is to underrate their importance in shaping today's psyche. To look at the formation of perverse practice, structure and culture within organisations is also to look at that development in society more broadly.

The narcissism and individualism present in late 20^th Century establishment has, through its values of self, greed, consumerism, acquisition and exploitation, promoted the emergence of perversion through the process of turning a blind eye. This is relevant to, and has an effect on organisational life. Unconscious perverse dynamics become more evident, as do the conscious accompaniments of corruption. Perversion and corruption are not the same and, in respect to examining organisational life, we are more familiar with the idea of conscious corruption. But, the two are often linked as in those cases where, for instance, organisation leaders attempt to cover up perceived failures in an attempt to manipulate the share market and provide leverage for a hoped for recovery. The denial involved in turning a blind eye can become a conscious attempt to disguise a reality all too evident. The psychological dynamics of corruption are manifest in 'greed, arrogance, a sense of personal entitlement, the idea of virtue as personal loyalty, and the inability to distinguish between organisational and personal ends'. The personal and organisational personna displayed through such characteristics as these are the eventual outcomes of an unconscious perverse societal dynamic. Perverse dynamics eventually lead to corrupt behaviours within the system.

The Deadly Sins of Organisations

Manifestations of perversity in organisations and corporations, I call the deadly sins of organisations because, when evidenced in ways that dominate the organisation's culture or 'character', they are destructive. Regarding an organisation as having character is quite a step beyond the ideas of corporate culture made popular since the 1980s where corporate culture was simply defined as 'the way things are done'?: a kind of collective set of learned habits, attitudes, values and ways of thinking. Character, psychopathic or otherwise, is more deeply engrained and infers a more firmly established collectivity, as if the company has a mind of its own, together with attendant emotions. The idea of a corporation or organisation being swamped by particular emotions, thoughts and desires that become akin to character traits is implicit in this view. Leaving aside for now the full question of the possibility of the 'character of an organisation' and how individuals are related to, or are a part of this, I shall propose the idea that organisations and corporations may seem to have character and beg my reader to stay with such an idea for the present. For, if the organisation is a piece of social reality constructed in-the-mind as much as in bricks and mortar, then in-the-mind it may have character as much as any other social construction, such as 'mother' or 'the police' or 'a manager'. That is, we may experience the organisation as an entity with volition and character and behave with this in mind.

By seeing the organisation as imbued with character, I shall explore the way certain organisational character traits inform the actions taken by organisational leaders and members. Many such character traits may, of course, foster corporate growth. However, when other destructive traits dominate the actions of organisational members from within an unconsciously perverse social structure, we can regard them as corporate sins.

The following chapters look at various forms of perversity as they appear in organisations. My basic argument is that organised corporate corruption is a conscious manifestation, the iceberg tip of an unconscious perverse societal structure and dynamic. Corruption builds on an underlying social fabric of perversity. But, conscious corruption is not the only manifestation of collective perversity. Other manifestations within various forms of organisation also need to be examined.

Although many people work in small businesses and not-for-profit organisations, the large corporate form is a modern archetype that has deeply influenced other forms of organisation. 'Corporatisation' is highly valued and has become equivalent to being 'business-like'. Bakan's book and then film The Corporation  took as its theme: 1) the idea of the corporation created as a legal entity similar to an individual in the law; and following this, 2) the evaluation of the behaviour of corporations against descriptions of psychopathic syndromes in the DSM IV, the recognised handbook of psychiatric nosology. The conclusion was that many corporations are psychopathic. Does this conclusion seem extreme? Perhaps it only fits some cases? But, such extreme manifestations as referred to in the book and film are extensions of practices that are in fact within the limits of the law, part and parcel of how we believe business should operate. In accepting them we may have become acclimatised to perverse practice.

There are very real differences between different forms of work organisation, for example, corporation or non corporatised small business; bureaucracy or association; private or listed companies. Nonetheless, each contains people who collectively give rise to similar psychosocial dynamics. It is these psychosocial dynamics and their systemic causes that will be explored. Corporations, as depicted in the film and book of that name are a special form of organisation. They allow collective ownership through shareholding and, since the middle of the nineteenth century, have a limited liability form so that shareholders are not liable for company debts. This structure gives the corporation the status of an individual in the law.

By the end of the nineteenth century, through a bizarre legal alchemy courts had fully transformed the corporation into a "person", with its own identity, separate from the flesh-and-blood people who were its owners and managers and empowered, like a real person to conduct business in its own name, acquire assets, employ workers, pay taxes, and go to court to assert its rights and defend its actions.

This institutional form has had far-reaching effects on our work lives. Despite the fact that small privately owned businesses and not-for-profit organisations employ a large percentage of the workforce, the corporate form has come to dominate the way we understand business. For example, the separation of ownership, governance and management born in the early days of corporate history, provides a general model of business functioning even in organisational forms such as partnerships. Bakan argues that because the corporate form allows for a multitude of widely dispersed owners unable realistically to collaborate, except where the owners are other corporations - and these may be highly competitive - it becomes divorced from those individuals. In a life of its own, it has a 'legally defined mandate is to pursue, relentlessly, and without exception, its own self interest, regardless of the often harmful consequences it might cause to others'. Corporate power is immense, especially in its multi-national form. Its influence on all forms of work organisation, via its culture and business dominance is insidious. Through many real-life examples, Bakan argues the case for the pathological nature of corporations, their ability to 'externalize' their effects so that outsiders suffer, their capacity to evade external regulation, and, through capital and influence, to ensure that government regulation is diminished. Dominated by a powerful elite of managers, largely beyond any control of small shareholders, modern corporations are compelled to be ruthless, despite the humanity and regardless of the personalities of those in the management roles. Even their attempted 'good works' in the long run often suit the aim of increasing profits. That is their very nature within capitalism.

Bakan's analysis is essentially political. The modern multi-national corporation is a juggernaught with dynamics extending out from its political mandate. His suggestions are to strengthen external regulation, ensuring that self regulation is not primary, to strengthen political democracy so that governments actually do regulate rather than 'partner' industry, and to create a robust public sphere. But, disturbing as his analysis is, is a political analysis enough? How can we understand the hidden psychological dimension that propels us in the first place to create and give birth to the pathological institution described by Bakan, that so dominates all of our current organisational forms?

This book looks less at a political/ economic analysis and more at understanding the perverse dynamics underlying the political surface. It examines the nature of perversion as a basic human phenomenon and how the dynamics of perversion may be established in organisations. Bakan gives some hints. The institution of the corporation has become divided from the humans who populate it. In becoming a legal person in itself, set apart from those who own and populate it through limited liability and anonymous share-holding, it has managed to move away from human ethics, feelings and responsibilities. Indeed, the people who work within the corporations are left to hold (or not hold) the ethics, feelings and responsibilities, that the corporation itself does not. Often corporate or organisation members in their private lives carry personal anxieties and misgivings about how they are compelled to act in their working roles. I argue that the process goes beyond the 'division' that Bakan suggests. Many of the thoughts and feelings that the workplace engenders are unconsciously projected into the corporation that then acts them out through corporate roles, sometimes against the conscious inclinations of the private individual. This demonstrates the effects of psychological denial and splitting at a societal level. Such institutional level dynamics are carried also into non-corporatised organisations and our everyday life.

In conducting an examination of the perverse nature of organisations, support will be drawn from social theories, depth psychology, psychoanalysis and concepts about human systems. Depth psychology and psychoanalysis provide an understanding of the inner life of a person. Here, character is regarded as influenced by inner forces that drive and shape thoughts, feelings and behaviours. How the person reacts to and makes sense of their inner life and social environment is also part of their character. In this book, psychology and psychoanalytic thinking will be applied to the organisation as a whole, or sub-parts of the organisation.

Systems thinking provokes the idea that the individual psyche is just one element in, or part of, a broader system of human culture, itself having 'character'. Discovering those aspects of a social system that represent a collective 'inner life' is the work of systems psycho-dynamics or socio-analysis. I take here what might be seen as an eclectic approach within systems psychodynamics, using arguments derived from several theories. While I understand that many theories have conflicting conceptual schemas, the task I set myself in this book is not to argue or attempt to resolve those more academic conflicts. It is to present a coherent picture of the emerging perverse culture evident in organisations, drawing from the work of others to help illuminate the nature of this perversity. So, different schools of psychological, psychoanalytic or social thought may be relevant at different times.

The seven deadly sins named in medieval times are: Pride, Lust, Wrath, Gluttony, Avarice, Envy and  Sloth. As I began to look at perverse process in organisations, I began to see how many of these emotions underpinned the group dynamics that I could discern. The deadly human sins seemed to lie at the basis of perverse organisational behaviour. At first I was attracted to research the idea of pride. While a healthy degree of pride is important for growth and progress, and while company pride is a great sustaining source of encouragement for individuals to work in collective endeavors, it seemed to me that many organisations attempt to instill a false sense of pride in their members, spreading the propaganda of the latest 'vision' statement to the internal market of employees as much as to their customer markets. This is reminiscent of the patriotism that political leaders wish to instill in citizens during war time. Perhaps corporate pride is the new form of patriotism - where the multinationals may be likened to countries or political entities in themselves. Certainly corporate competition has been likened to war and demonstrates many of its social characteristics including the use of spies and a ruthless attitude toward the 'other' as enemy. In my research I was led to Wall Street and the merchant bankers who, through to the present day, have been making countless millions from clever ways to work the money markets. In this world the competition is fierce and the stakes high. In exploring this mainly male culture, I discovered a different kind of pride. It was not the steady pride in craftsmanship of a large body of workers, but a heady, excited phallic pride that lifted the players into a willful blindness. I examine this in chapter 3, where the case study of Long Term Capital Management is presented.

That case study leads me to examine the close connection of pride and greed. Greed is a complex notion and can be directly linked to the medieval deadly sins of avarice and gluttony. In 21st Century corporate life, the idea of avarice and love of money is also associated with a greed for power: to be in that place that leads to gaining mass recognition, and the lifestyle of the rich and famous; the perverse culture of celebrity. I have examined this in chapter 4 under the general heading of greed. The case of Parmalat, with its 'greedy CEO' helps me to illustrate the idea of corporate greed and its perverse aspects.

In chapter 5 I turn to examine the functioning of envy and the social defenses against envy. Incorporated professional associations have a different structure to for-profit corporations. Rather than having the accountability hierarchy of organisations with vertical authority they are purportedly groups of equals with leaders voted into office. A kind of horizontal authority structure operates. In such organisations envy and sibling rivalry have to be managed by other than a surrogate parental authority. Associations may be studied to throw light on the process of envy. Moreover, many corporations in post-modern times strive to create more democratic structures and practices such as found in distributed leadership, flattened hierarchy, team-based and network structures. Although these are still at base accountability hierarchies - there is always the boss and the owners or shareholders at the apex - and although this is not done for the sake of democracy but for increased productivity, at times they take on some of the character of associations.

An association and an accountability hierarchy meet in the company board. Chapter 6 explores the perverse dynamics found in corporate governance when directors fail to take up their role. This might be regarded as a modern form of sloth - a kind of corporate laziness or moral lassitude where the governance role is neglected. The cases of HIH Insurance and Ansett Airlines are taken as part of this exploration.

Chapter 7 examines perverse hatred and wrath as these get expressed in institutionalised bullying and abuse. Military training exemplifies the dynamics involved, although these dynamics are applicable to an analysis of bullying in corporate workplaces. While uncovering perverse dynamics through the device of looking at corporate sins, I do not attempt to make a full match with their mediaeval counterparts. In examining greed I focus on avarice at the expense of gluttony; I leave out lust in its direct sexual manifestation and rather put forward the idea of a lust for power. One should consider, however, that in psychoanalytic theory, sexual desire is fundamental to all desire.

It must be remembered that the emphasis here is on perversity displayed by the organisation as such, rather than simply by its leaders, or other members, even though they may embody and manifest perverse primary symptoms to the extent that they at times engage in criminal behaviours. What is explored is a group and organisation dynamic. Although it can be argued that those with power are exposed more fully to the temptations offered by the culture and hence more likely to take up such temptations, the situation is more complex. Within the perverse structure some roles are required to take up corrupt positions. They become part and parcel of the way things work. The person may condemn certain practices, but the role requires them. Tensions between person and role may mean that the person in role acts as they would not while in other roles. Such tensions may lead to the dynamics of perversity, especially the basic dynamics of splitting (the role from the person) and denial (of human responsibilities in the role) or turning a blind eye.

The Nature of System and Role

The point about the organisation dynamics cannot be overstressed. Chapter 2 describes the nature of perversity and its organisational form. In that discussion the idea of a system is assumed. By looking at organisations in terms of the decisions and agreements made within them, we begin to orientate our focus to the system level. Rather than seeing the organisation as a collection of individuals, each making independent decisions, we can see the organisation as a thing in its own right that gives rise to interdependent decisions.

The various systems that make up the organisation have their own structures and processes that shape the experiences of those individuals who take up the roles available and possible within these systems. I say ‘systems’ because these include such systems as, for example, the task systems (the division of tasks into specific jobs taken on by particular work roles); political systems (the distribution of informal power between people together with its authorised distribution between work roles); and, emotional systems (the unconscious distribution of emotional experience at work, partially reliant on dispositions in the person to respond to different group pressures and task characteristics). Individuals are offered, and take up different roles in all these systems. The roles they take together form the system as a whole. Each of the roles represents something of the whole and cannot be seen to operate in isolation. In addition, an organisational system in its established form validates or invalidates the experience of members and hence gives or denies access to new forms of thinking. Importantly, each role represents something of the system-as-a-whole. If you can't have a mother without a baby, in the case described below, in a modern oncology unit, you can't have a surgeon without a medical oncologist or a radiologist. The role of each is created and regulated by the other.

A Case – the agreement about certainty

This case is given to illustrate the systems psychodynamics that operate at an organisational rather than an individual level, and provides this perspective as background to the analysis of later organizational cases. It illustrates how perverse power dynamics might begin to enter even the most altruistic of social systems, how task systems might be diverted from their avowed purpose and how denial and negation operate. It shows how primitive and pervasive is the collective human need for certainty in the face of threats to survival, how this need for certainty gathers people together as accomplices and shapes what humans can collectively tolerate.

In an action research project located in a large hospital/health system, the focus was on looking at how clinicians, mainly specialist doctors might better incorporate evidence-based medicine into their practice. My colleague and I were asked to join the project through conducting a work culture analysis. Although the government funders strongly believed that finding improved ways to incorporate evidence into clinical practice should be the primary outcome of the project, there were some questions in the minds of the hospital based project leaders about how this might be done. The project became focused in oncology.

The work led us into a series of meetings, observations and interviews with clinicians. Quite predictably we found a pattern of sub-cultures among the specialists involved. In particular, in the work sub-cultures of medical oncologists, radio-oncologists, specialist GP’s and surgeons we found quite different systems of authority, epistemologies (ways of knowing) and ontologies (beliefs about the nature of things). For example, the medical oncologists had themselves sub-systems of those who predominantly took up clinical roles and those who took on more scientific work in clinical trials and who diligently kept abreast of the latest publications, so much so that anything published a month previously became 'old' news. For these specialists the culture involved learning through peer reviewed research.

In contrast, the surgeons learned mainly in a system of authority from older, more experienced surgeons. Clinical trials in surgery cannot be achieved in the same way as those trials that test new drugs or new drug mixes and concentrations. You can trial many drugs, but you can't cut people up in a variety of different ways to see the outcome.

These sub-culture differences were interesting in themselves. However, as we proceeded through the interview process we increasingly came across reference to the idea of ‘the surgical personality.’ Admittedly a stereotype, it had some validity and was certainly an idea that prompted behaviour. In the general hospital culture, surgeons were seen as aloof, arrogant, rather rigid in their thinking and less open to change than those in other specialties. This was not simply alluded to by other clinicians, but also by some of the surgeons themselves. And, they held a great deal of authority and power. Why was this so?

As we explored the work processes within the system, we discovered that the surgeons often held the gateway to the whole referral system between the different cancer specialists. This was because a patient was highly likely to first be referred to a surgeon prior to any diagnosis of cancer. We had then, an organisational structural view on how it might be that the surgeons held power. They were gatekeepers to the other doctors' livelihoods.

But this structural analysis didn’t seem enough. As we interviewed further we learned a lot more about the disputes and ambivalences among and between oncologists and other cancer clinicians. These seemed to surround the debate about how extensive should be the encouragement of chemo or radio therapy interventions in a patient with serious tumors. Trials showed that a large number of interventions did not always provide better treatment that a specific limited number. But, as one interviewee put it to me, ‘if it was your mother wouldn’t you try just one more drug?’ The anxiety that seemed to pervade the workplace often centered around, on the one hand, the fight with the disease and on the other hand the care for the patient, their quality of life and their suffering. These clinicians had no definite answers. The evidence of the so-called ‘gold standard’ treatments could be challenged on many fronts.

This became clear in interviews as we learned of the many reasons why gold standards could not always be met in treating many actual clinical presentations, because of the patients' other life choices, or because the literature could be interpreted differentially. Often the research data could not be definitive. But, the ambivalence in the work culture became even clearer during a break in the formal interviewing process. At one time we encountered many clinicians in the airport lounge after a national meeting of the broader project. In this more relaxed setting, stories of the clinicians own experiences of being patients emerged. The professional stance given us from the role of clinician in the formal interviews changed to a more personal stance from the role of patient. Different experiences and feelings were explored in the same people.

It gradually dawned on me that in their fear and uncertainty, members of this system needed someone who might ‘know’ or have an answer. Or, at least this need would emerge in the basic assumption life of the system. There was a basic emotional need for certainty in the face of life and death decisions, even though conscious belief and training indicated that no such certainty existed. The surgeons filled this role of 'the one who knows' and there were enormous unconscious pressures for them to stay in it. It seemed the whole system colluded in an agreement that the surgeons would take this role even though there was also consciously expressed resentment that they did so. The tension produced with the existence of unconscious pressures to assume a consciously resented and unwanted role, is one that resonates through the dynamics of many organisations and its understanding will be important throughout this book. In the case at hand, the role expressed in the ‘surgical personality’ pervaded relations between the sub-systems of clinicians and it pervaded their training methods and referral systems. Was it not a paradox that the sub-group least dependent on an experimental or clinical trial evidence base held an important structural and emotional role in the oncology treatment system? Was ‘certainty’ held in a place away from science, more akin to faith?

In this case, it might be argued that the medical system unconsciously created a power and authority system where the surgeons held sway and developed a collective 'surgical personality'. The system was created through the wish that someone might 'know' the answers to the unanswerable questions around life and death. The people in the system both knew and did not know that no one could hold such knowledge. It was an unconscious workable perversity based on a collusive denial or turning of the blind eye, that allowed a

particular authority structure to hold sway. Although in this case such a perverse stance holds the system together and allays anxieties - that is, it works as a credible defence most of the time - it may at times mean that some of the players become blind to alternate possibilities for the treatment system.

In the cases that are presented in this book, the perverse dynamics only hinted at here are made explicit in the roles of the players - usually senior personnel. But, it is the underlying societal pattern that is of major concern - the roles point us toward their underlying causes.

Notes to Chapter 1