Ethical considerations

While most organizational identity literature focuses on understanding and managing identity for organizational effectiveness, organizations should not dismiss the adverse outcomes familiar with group processes, which can hinder organizational effectiveness. The adverse outcomes of group dynamics that can damage the organization and its members include peer pressure, groupthink, Asch Syndrome, de-individualization, social loafing, and polarization (Jex, 2002). Also, the ethical considerations of identifying with an organization are profound.

At what point does company loyalty become blind obedience that can harm the individual, the members, and the organization? When individuals identify too closely with a group, they may suspend critical thinking and lose the objectivity necessary to make ethical choices or to engage in the functional conflict necessary for an effective group process. Religious cults, extreme political groups, and violent gangs succeed partially because their individual members lose the capacity to differentiate themselves and their behaviors from the organization and its members. This same level of organizational identity is evident in corporate environments and other collectives.

For example, a former Enron employee, Phyllis Anzoalone, admitted that her identity was so entwined with Enron's identity that she suffered emotional scars when the company melted under the weight of ethical violations (Kreitner & Kinicki, 2007). During a presentation on the "State of Ethics in American Society," Marriott School of Management Dean Ned C. Hill said that most of the Enron members involved in illegal activities justified their actions by saying, "I did not want to be accused of not being a team player." In other words, many of Enron's employees had such strong organizational identification that they "turned their backs on their personal ethical standards and values when working on clearly illegal deals" (Kreitner & Kinicki, 2007, p. 150). The strong organizational identity that contributed to the effectiveness of Enron led to the ruin of the company and its employees.