WHY HIERARCHIES FAIL TO DISCIPLINE: DEHUMANIZATION IN HIERARCHICAL ORGANIZATIONS WEAKENS PEER OBSERVER PUNISHMENT AND FUELS THE SPREAD OF WRONGDOING

Abstract: Wrongdoing is often more pervasive in hierarchical organizations, despite their reputation for harsher punishment compared to flatter ones. We argue this paradox arises stems from a blind spot in traditional approaches to discipline, which focus on formal, top-down enforcement while overlooking the critical role of informal, muted punishment by peer observers without formal authority. Specifically, hierarchies lead peer observers to perceive wrongdoers as dehumanized by the organization, reducing their inclination to hold wrongdoers accountable. This weakens peer punishment, sustaining wrongdoing and eroding observers’ ethical standards, ultimately increasing their own engagement in wrongdoing. Study 1, using data from U.S. federal employees, show reduced peer punishment in more hierarchical organizations. Study 2, analyzing Fortune 500 employee reviews with a machine learning approach, finds employees experience greater dehumanization in hierarchical firms. Study 3, using experimental designs, show that hierarchy heightens observers’ perceptions of wrongdoers as dehumanized by the organization, weakening peer punishment and increasing observers’ own wrongdoing. Together, our findings challenge the conventional view that hierarchies foster stricter discipline, revealing instead how dehumanization in hierarchies loosens peer punishment and fuels wrongdoing.

Keywords: Hierarchy, punishment, ethical decision, dehumanization