Corporate psychiatry September 4, 2011 at 10:50 pm

There has been a meme floating around in the last few years of corporate psychopathy. Actually there are two ideas here: co-workers as (potential or actual) psychopaths; and corporations as psychopaths. It is the latter I find interesting.

Let me explain. In the US at least, corporations have had many of the rights of natural persons for many years. The most famous example of this is the recent supreme court decision relating to election funding (specifically striking down provisions in the McCain–Feingold Act that prohibited all corporations and unions from broadcasting “electioneering communications”).

So, if corporations benefit from many of the rights of people, shouldn’t they be similarly judged by their acts?

DSM V, the latest edition of the American Psychiatric Associations’ Diagnostic and Statistic Manual for Mental Disorders, proposes a number of criteria for antisocial personality disorder:

  1. Significant impairments in personality functioning manifest by:

    1. Impairments in self functioning (a or b):

      1. Identity: Ego-centrism; self-esteem derived from personal gain, power, or pleasure.
      2. Self-direction: Goal-setting based on personal gratification; absence of prosocial internal standards associated with failure to conform to lawful or culturally normative ethical behavior.

      AND

    2. Impairments in interpersonal functioning (a or b):
      1. Empathy: Lack of concern for feelings, needs, or suffering of others; lack of remorse after hurting or mistreating another.
      2. Intimacy: Incapacity for mutually intimate relationships, as exploitation is a primary means of relating to others, including by deceit and coercion; use of dominance or intimidation to control others.
  2. Pathological personality traits in the following domains:
    1. Antagonism, characterized by:

      1. Manipulativeness: Frequent use of subterfuge to influence or control others; use of seduction, charm, glibness, or ingratiation to achieve one’s ends.
      2. Deceitfulness: Dishonesty and fraudulence; misrepresentation of self; embellishment or fabrication when relating events.
      3. Callousness: Lack of concern for feelings or problems of others; lack of guilt or remorse about the negative or harmful effects of one’s actions on others; aggression; sadism.
      4. Hostility: Persistent or frequent angry feelings; anger or irritability in response to minor slights and insults; mean, nasty, or vengeful behavior.
    2. Disinhibition, characterized by:
      1. Irresponsibility: Disregard for – and failure to honor – financial and other obligations or commitments; lack of respect for – and lack of follow through on – agreements and promises.
      2. Impulsivity: Acting on the spur of the moment in response to immediate stimuli; acting on a momentary basis without a plan or consideration of outcomes; difficulty establishing and following plans.
      3. Risk taking: Engagement in dangerous, risky, and potentially self-damaging activities, unnecessarily and without regard for consequences; boredom proneness and thoughtless initiation of activities to counter boredom; lack of concern for one’s limitations and denial of the reality of personal danger.
  3. The impairments in personality functioning and the individual’s personality trait expression are relatively stable across time and consistent across situations.
  4. The impairments in personality functioning and the individual’s personality trait expression are not better understood as normative for the individual’s developmental stage or socio-cultural environment.
  5. The impairments in personality functioning and the individual’s personality trait expression are not solely due to the direct physiological effects of a substance (e.g., a drug of abuse, medication) or a general medical condition (e.g., severe head trauma).

OK, let’s do some diagnosing.

A1 is pretty straightforward. Most corporates pass a or b or both.

A2a is slightly more difficult, but again many corporates pass, while A2b is pretty much the definition of being an employee.

B1 is harder. A diagnosis for a corporate would have be based on a or c, but certainly many PR/investor relations/government affairs groups have an element of B1a about what they do, while B1c can be met simply by the pursuit of profit at the expense of (most) other things.

I would not argue B2a or b are common in corporates, so we need B2c to get a diagnosis. Sadly (or fortunately depending on your point of view), that is not easy either. Yes, corporations take risk, but typically not unnecessarily’ and without regard for consequences. Moreover, while some display ‘a lack of concern for [their] limitations’, they at least try not to. That is what risk management is about. So it seems we stumble on the requirement for disinhibition in our diagnosis.

C and E are straightforward passes for many corporates, but D is difficult too as, frankly, the way corporates behave is normative, at least in North American culture. So, reluctantly, while I think that a lot of what corporates do is antisocial, it would be hard to make a case for involunatry commitment (or sectioning, as we call it in the UK) under the DSM V criteria for antisocial personality disorder. Badly behaved, yes; psychopaths, (mostly) no. Before you get too comfortable though, check out the criteria for Narcissistic Personality Disorder and Personality Disorder Trait Specified: these are a lot easier for corporates to pass…

7 Responses to “Corporate psychiatry”

  1. […] – Corporations as psychopaths. […]

  2. I’m not so sure B2c wouldn’t be fulfilled – Enron? Deepwater Horizon? Much of the financial services industry in the run-up to the crisis?

  3. This is a very interesting application of a diagnostic system.There are some operationalised tools to help make a categorical diagnosis and may help you to expand ths to an mainstream article..I will try to loook them out.I used to Section 12 appproved by the home office.

  4. M – You are right that B2c is fulfilled in some cases, but mostly companies that either failed, or had major disasters. It isn’t common, in other words, whereas the diagnosis I am thinking of should (to be insightful) capture more than these outliers.

  5. Thank you xxx – I would be interested in seeing those operationalised tools.

  6. That’s a valid point – though it is also easier to point out when B2c has occurred ex post than ex ante. In retrospect it may seem obvious these companies engaged in excessive risk taking, but it was not necessarily obvious ahead of time.

    So while it may be difficult to point to a common or widespread engagement in excess risk taking, that does not necessarily mean it doesn’t occur.

    But then that may not always be easy to point out in an individual either.

  7. Sorry, that’s a very muddled and woolly way of saying that it’s not easy to tell ex ante whether the behaviour of a corporate would satisfy B2c. A lot of the interactions may be hidden well from view (and what with annual accounts so well massaged it’s hard to see red flags of excessive risk taking there either).

    Some of the risk taking may also be on departmental, rather than overall corporate, level. Different departments competing for the same resources may encourage some to take excessive risks in a way that isn’t easily detectable from the outside. Nick Leeson at Barings was a spectacular example of what can happen when incentives run amok, but how many near-misses are there for each Barings?