Human Resources » Four Governance Factors That Lead to Disaster

Four Governance Factors That Lead to Disaster

April 18, 2019

Beijing, China- July 10, 2016: Jenga is a game of physical and mental skill created by Leslie Scott. Taking one block from wooden blocks tower that stability decrease

In an article in Harvard Business Review the author discusses a 15 year study including 3200 interviews designed to discover what makes an organization dishonest and unethical. The research revealed key organizational issues. Lack of consistency between an organization’s stated mission, objectives, and values, and the way it is actually experienced by employees made it more likely they would withhold or distort truthful information. Unjust processes for measuring employee contributions had an even more pronounced effect on their willingness to withhold or distort information. Weak cross-functional collaboration is another big problem. Fragmentation, especially across divisional lines, creates dueling truths, resulting in one side having to prove they are right, and the other wrong. Divisional loyalties paint those outside the team as an enemy to be feared. Poor governance that fails to provide an effective process for decision makers to have honest conversations about tough issues leaves the organization reliant on rumors and gossip. These factors are within a corporation’s control and improving them helps avert reputation and financial disasters.

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