Ethical marginality: the Icarus syndrome and banality of wrongdoing. (2010)

“High performance organizations are favorable hosts for wrongdoing because high performance requires aggressive behavior at the ethical margins of what is acceptable. The way leadership reacts to competition sets the stage for ethical or unethical cultures to develop

Dennis R. Balch & Robert W. Armstrong, both of the University of North Alabama, Florence, Alabama, U.S.A.
Journal of Business Ethics 2010; 92: 291-303.

This study proposes a conceptual model to explain persistent, accepted-as-normal corporate wrongdoing (hereafter banality of wrongdoing), particularly for high performance organizations.

The model describes five explanatory variables: the culture of competition, ends-biased leadership, missionary zeal, legitimizing myth, and the corporate cocoon. The authors’ thesis is that the nature of competition drives both legitimate and illegitimate goal-seeking to adopt an iconoclastic (rule-breaking) orientation.

High performance organizations are favorable hosts for wrongdoing because high performance requires aggressive behavior at the ethical margins of what is acceptable. The way leadership reacts to competition sets the stage for ethical or unethical cultures to develop. Ends-biased leadership will project strong vision, using ideology and legitimizing myth as tools to inspire and motivate.

The resulting missionary zeal justifies using questionable means because of the perceived value of the end. One critical method for building strong culture is creating a sense of being separate and apart from the ordinary. This cocoon effect may create a self-referential value system that is significantly at odds with mainstream culture and in which wrongdoing is banal. The authors intend an empirical study of the variables described in this model

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