In Conspiracy of Fools: A True Story, Kurt Eichenwald relates how Enron’s leaders engaged in massive book-cooking with little interference from the dozens of managers, lawyers, and advisers who had a pretty good idea of what was going on. Similarly, at Parmalat, employees not involved in the Italian dairy giant’s fraud apparently were aware of it because they often joked about fictitious milk sales to Cuba long before those became a public scandal. Tolerance of organizational bad behavior has become so expected that, in 2002, Time magazine named Enron’s Sherron Watkins, the FBI’s Coleen Rowley, and WorldCom’s Cynthia Cooper “Persons of the Year” for going public with stories of organizational failure. Why should simply speaking out about outrageous conduct be so difficult—and so rare?
A version of this article appeared in the November 2005 issue of Harvard Business Review.