Bankers and Teachers: Scandals and Accountability (Part 2)
Part 1 described how Wells Fargo bank and the Atlanta public schools defrauded large numbers of customers and students. At the bank, over 5,000 employees were fired. The bank’s CEO admitted responsibility for the fraud before a U.S. Senate Banking Committee yet the fine levied by federal regulators ($185 million) wasn’t even a slap on the wrist, given the $80-plus billion in revenues that the bank took in last year. Nor did the bank admit in that agreement to pay the fine any responsibility for for their actions. The CEO is still CEO.
The Atlanta public schools cheating scandal found evidence of 178 principals and teachers in over 40 schools tampering with student scores on state tests. Eleven teachers were indicted, tried, and convicted (over 20 other educators took plea deals). Those 11 are in prison.
Two questions occurred to me as I read and pondered these instances of corruption Wells Fargo and the Atlanta public schools.
First, why did employees scam customers with bogus bank accounts and educators tamper with test scores?
The familiar answer is: some bad apples caused the problem–which is basically saying it was individuals acting badly not an organizational problem. Over 5,000 fired at Wells Fargo is a lot of “bad apples, however.” Over 40 schools and 178 educators is also a lot of “bad apples.” The “bad apples” answer side-steps the pervasive culture in Wells Fargo and Atlanta public schools that top leaders shaped and drove unrelentingly.
Top officials created an organizational culture of producing results at any cost.Ample evidence exists of top managers setting very high performance goals that were difficult to meet; the company and district created fear among employees who didn’t meet those goals. Penalties for low performance and retaliation for those who complained fostered a culture of fear. Compliance to do what expected even if it disadvantaged customers was a powerful reason to keep a job. In short, the culture caused employees to peddle bogus accounts and fix test scores.
But–you knew a “but” was coming–not all of the lowest paid employees engaged in the fraud. While cultural pressures can be strong and influential, they do not always determine individual action. Sure, 5,300 Wells Fargo employees were fired but many more retained their jobs by figuring out ways to perform and not defraud customers. Similarly, all Atlanta educators experienced the same intense pressure to raise students’ test scores but many principals and teachers followed the rules and did what they were supposed to do in administering and scoring tests. Yes, organizational culture surely shapes behavior but it does not determine how every individual acts.
Top officials were greedy; they thought they could get away with the fraud and cheating and boost the reputation of their organizations. Over the years, bipartisan policies deregulated industries (e.g., financial companies, airlines) creating a climate where profit seeking is highly prized. Billionaires become Bankers and Teachers: Scandals and Accountability (Part 2) | Larry Cuban on School Reform and Classroom Practice:
