Organizational Paranoia
1
Social Uncertainty and the Fragility of Trust:
Origins and Dynamics of Organizational Paranoia
Roderick M. Kramer
Graduate School of Business
Stanford University
Running head: Organizational Paranoia
First Draft – Prepared for Research in Organizational Behavior (Editors: Barry Staw &
Robert Sutton)
Author Information
Early versions of these ideas were presented at the Bellagio Conference on Distrust,
Russell Sage Foundation Workshop on Trust in Organizations, and Tutzing Conference
on Trust in Society and Organizations. Comments from participants at those conferences
are gratefully acknowledged. I am greatly indebted also to Karen Cook, Diego Gambetta,
Russell Hardin, James March, Joanne Martin, Jeffrey Pfeffer, Robert Sutton, Bernard
Weiner, and Phil Zimbardo for their insightful comments at various stages of this work.
Correspondence regarding this chapter should be addressed to the author care of:
Graduate School of Business, Stanford University, Stanford CA 94305 or via e-mail at
Kramer_Roderick@GSB.Stanford.edu.
Organizational Paranoia
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Abstract
Distrust and suspicion are common and recurring problems within many organizations.
Our understanding of the antecedents and consequences of such distrust and suspicion,
however, remains far from complete. The present chapter addresses this issue by
articulating an original framework for conceptualizing the origins and dynamics of a
heightened and exaggerated form of distrust and suspicion termed organizational
paranoia. Drawing on recent social psychological theory and research, the framework
identifies social cognitive processes that contribute to the development of organizational
paranoia. The framework also explicates psychological, behavioral, and organizational
consequences of such paranoia. Evidence in support of the framework is reviewed.
Approaches to reducing organizational paranoia are considered.
Organizational Paranoia
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Social Uncertainty and the Fragility of Trust:
Origins and Dynamics of Organizational Paranoia
"I just knew my enemies were plotting against me . . . I was beginning to have a
vague sense of isolation. Things were happening without my knowledge. I was beginning
to be excluded from meetings . . . I started to hear about deals being made that I knew
nothing about, projects put into development that had never been discussed with me . . . I
felt surrounded by people plotting against me."
-- Hollywood Studio President, Dawn Steel (1993, pp. 222-223)
"I believe in the value of paranoia."
-- Intel CEO, Andrew Grove (1996).
Organizational theorists have long recognized the importance of trust, noting the
central role trust plays in the development of more cooperative and productive
relationships among organizational members (e.g., Arrow, 1974; Barber, 1983; Zucker,
1986). Within the past few years, there has been a renewed appreciation of trust and
interest in exploring more precisely how trust influences a variety of important
organizational processes and outcomes (Brown, 1994; Carnevale, 1994; Lane &
Bachman, 1998; Mayer Davis & Schoorman 1995, McAllister 1995, Sitkin & Roth 1993;
Sitkin, Rousseau, Burt, & Camerer, 1998; Whitney, 1994). The ascension of trust as a
major focus of recent organizational theory and research reflects, in no small measure,
accumulating evidence of the substantial and varied benefits that accrue when high levels
Organizational Paranoia
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of trust exist within complex social systems (Fukuyama, 1995; Hollis, 1998; Putnam,
2000; Sztompka, 1999).
Although recognizing the myriad benefits that flow from trust, organizational
scholars have acknowledged also that trust tends to be a fragile and elusive resource
(Arrow, 1974). However desirable and valuable the bonds of trust may be, they are often
hard to establish and easily disrupted (Fox, 1974; Nye, Zelikow, & King, 1997; Pew,
1998; Sitkin & Roth, 1993). Although the fragility of trust has been widely noted
(Gambetta, 1988; Meyerson, Weick, & Kramer, 1996; Slovic, 1993), it has been the
subject of surprisingly little systematic theory or research. For example, although there
exist numerous models that elaborate the dynamics of trust development (e.g., Lewicki &
Bunker, 1995; Lindskold, 1978; Sztompka, 1999), models that systematically explicate
the barriers or impediments to trust are virtually nonexistent (see Footnote 1). As a
consequence, the conditions that contribute to the fragility of trust remain only poorly
understood. Why is trust often so hard to establish and so easily disrupted, even when its
benefits so individually and collectively transparent to organizational members?
The primary aim of this chapter is to address this important question by advancing
a framework for conceptualizing the origins and dynamics of a peculiar form of
heightened and exaggerated distrust termed organizational paranoia. Such paranoia can
arise at virtually every level of organization from the interpersonal to the collective. For
example, employees of an organization can be paranoid about what they think their fellow
co-workers are thinking or doing “behind their backs.” Subordinates can feel paranoid
about the extent to which their supervisors or managers are treating them fairly or have
their long-term interests at heart. Members from one group or department in an
organization can be paranoid about what other groups or departments are doing. Even
Organizational Paranoia
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organizational leaders are vulnerable to the development of paranoid-like fears and
preoccupations. As these examples illustrate, organizational paranoia can take many
forms, depending on the nature of the relationship between paranoid perceivers and the
target of their paranoia (see Footnote 2).
Conceptualizing Organizational Paranoia
To more formally develop the notion of organizational paranoia, and to help
situate it within a wider nomological net, it may be helpful to begin with an overview of
some of the more prominent images of distrust and suspicion encountered in the social
science literature. Social scientists have generally conceptualized distrust as an active
psychological state characterized by a specific constellation of negative expectations and
beliefs regarding the lack of trustworthiness of other persons, groups, or institutions
(Deutsch, 1958, 1973; Gambetta, 1988; Rotter, 1980). For example, Govier (1993)
defined distrust in terms of the "absence of confidence in the other, a concern that the
other may act so as to harm one, that he does not care about one’s welfare or intends to
act harmfully, or is hostile. When one distrusts, one is fearful and suspicious as to what
the other might do” (p. 240).
As Govier's definition suggests, suspicion constitutes one of the important
components of distrust. Fein (1996) has characterized such suspicion as a cognitive state
in which a social perceiver “actively entertains multiple, plausibly rival, hypotheses about
the motives or genuineness of a person's behavior” (p. 1165). Fein and Hilton (1994)
have noted further that suspicion entails a “belief that the actor's behavior may reflect a
motive that the actor wants hidden from the target of his or her behavior" (p. 169).
To explain distrust and suspicion, researchers have often noted the critical role
that prior experience plays in shaping individuals’ beliefs about others’ trustworthiness or
Organizational Paranoia
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lack of it. Models of trust development typically posit, for example, that individuals’
judgments about another’s trustworthiness or lack of trustworthiness can be construed
largely as history-dependent processes (e.g., Deutsch, 1958; Lindskold, 1978, 1986;
Pilisuk & Skolnick, 1968; Rotter, 1980). According to such conceptions, individuals’
trust in others "thickens" or "thins"--increases or decreases--as a function of their
cumulative history of interaction with them.
In noting the formative role that experience plays in the emergence of trust and
distrust, these models imply individuals' judgments about another’s trustworthiness or
lack of it are anchored, at least in part, on their a priori expectations about the other’s
behavior and the extent to which subsequent experience affirms or discredits those
expectations. Boyle and Bonacich’s (1970) analysis of trust development is
representative of such arguments. Individuals’ expectations about trustworthy behavior,
they propose, tend to change, “in the direction of experience and to a degree proportional
to the difference between this experience and the initial expectations applied to it" (p.
130). In support of such arguments, numerous empirical studies have shown that
interactions that reinforce individuals’ expectations about other’s trustworthiness increase
trust, while interactions that violate those expectancies tend to undermine it (Lindskold,
1978; Pilisuk & Skolnick, 1968; Rotter, 1980). In addition to showing that individuals’ a
priori expectations influence their judgments about a target person’s trustworthiness,
other research has shown that such judgments are influenced also by the a posteriori
attributions they make about another's actions (Gabarro, 1978; Kruglanski, 1970, 1987;
Strickland, 1958). According to these studies, such attributions influence the inferences
social perceivers make about others’ trust-related motives, intentions, and dispositions.
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Related research has demonstrated that the existence of uncertainty or doubt
regarding others' trustworthiness induces fairly vigilant appraisal of others' actions, in an
attempt to discern their presumably concealed intentions and motives. Experiments by
Fein and his associates (Fein, 1996; Fein & Hilton, 1994; Hilton, Fein, & Miller, 1993)
have shown, for example, that induced suspicion triggers a sophisticated analysis of
others' intentions and motives, an analysis "characterized by active, careful consideration
of the potential motives and causes that may influence [their] behaviors" (Fein, 1996, p.
1167). The findings from these experiments further suggest that suspicion is evoked
under at least three conditions. First, suspicion is often evoked when perceivers
recognize situational cues or are in possession of contextual information suggesting
others might have ulterior motives for their actions. Second, it can be evoked when they
have forewarnings others might be insincere or untrustworthy. Third, it can be evoked
when their expectations about others have been violated.
The portrait of the social perceiver that emerges from these diverse streams of
research is compatible with the idea that, when trying to make judgments about others'
trustworthiness, decision makers often behave much like "intuitive social auditors” or
“mental accountants” who closely monitor or "track" their trust-related transactions in the
hope of discriminating more accurately who among them can be trusted, how much and
under what circumstances (cf., Bendor, Kramer, & Stout, 1991; Kramer, 1996).
According to this intuitive auditor model, social perceivers tend to be vigilant and
mindful social information processors, especially when the benefits of trust are perceived
to be substantial and the costs of trust mistakes steep (Kramer, Meyerson, & Davis,
1990). The intuitive auditor model begins with two assumptions. First, it assumes that
peoples' judgments regarding others' trustworthiness reflect intendedly rational and
Organizational Paranoia
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adaptive (i.e., systematic, orderly and efficacious) processes of social inference and
hypothesis testing. Second, it assumes that, like "good" Bayesians, they try to update their
social “mental accounts” on the basis of their ongoing experiences and accumulating
evidence with others. Thus, people distrust when the evidence warrants it.
Although recognizing that judgments about others' trustworthiness sometime
resemble this sort of mindful and intendedly rational assessment process, a number of
researchers have noted that other variants of distrust and suspicion appear to be far less
rational with respect to both their origins and their judgmental consequences (Barber,
1983; Deutsch, 1973; Luhman, 1979). On the basis of such evidence, Deutsch (1973)
argued it is useful to distinguish between rational and nonrational variants of distrust.
The critical feature of rational distrust, he suggested, “is that it is flexible and responsive
to changing circumstances” (p. 170). In contrast, nonrational forms of distrust are
characterized by an “inflexible, rigid, unaltering tendency to act in a . . . suspicious
manner, irrespective of the situation or the consequences of so acting" (p. 171). The
pathology of such irrational distrust, Deutsch went on to argue, is reflected in "the
indiscriminateness and incorrigibility of the behavioral tendency” it engenders (p. 171).
Paranoid cognition constitutes a prototypic example of such irrational distrust. If social
cognition is, as Kunda (1999) proposed, the study of how social perceivers “make sense"
of themselves and other people, then paranoid social cognition can be viewed as a
sensemaking process gone seriously awry.
Colby (1981) provided one of the first, and most complete descriptions of
paranoid cognition, characterizing them in terms of “persecutory delusions and false
beliefs whose propositional content clusters around ideas of being harassed, threatened,
harmed, subjugated, persecuted, accused, mistreated, wronged, tormented, disparaged,
Organizational Paranoia
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vilified, and so on, by malevolent others, either specific individuals or groups" (p. 518,
emphases added). Subsequently, Robins and Post (1997) elaborated on this
characterization, noting that the essential cognitive components of paranoia include
suspicions “without sufficient basis, that others are exploiting, harming, or deceiving
them, preoccupations “with unjustified doubts about the loyalty, or trustworthiness, of
friends or associates,” and a reluctance “to confide in others because of unwarranted fear
that the information will be used maliciously against them” (p. 3).
Drawing on these general characterizations of paranoid cognition, organizational
paranoia can be defined as a form of heightened and exaggerated distrust that
encompasses an array of beliefs, such as organizational members’ perceptions of being
harassed, threatened, harmed, subjugated, persecuted, accused, mistreated, wronged,
tormented, disparaged, vilified, and so on, by malevolent others, either specific
individuals or groups within their organization. These perceptions include suspicions that
others are exploiting, harming, or deceiving one, along with preoccupations and doubts
about their loyalty or trustworthiness.
At the behavioral level, organizational paranoia is manifested in terms of a variety
of intendedly self-protective behaviors. The aim of these defensive behaviors is to
minimize the perceived risk of vulnerability or harm arising from misplaced trust (i.e.,
trusting the wrong people or trusting too much). Such behaviors include the reluctance to
confide in or self-disclose to other individuals in the organization, a hesitancy to engage
in spontaneous forms of cooperative behavior when interacting with other organizational
members, and avoidance of informal social contact (Kramer, 1994). Paranoid cognition
thus fosters both behavioral inhibition and social constriction.
Tracing the Origins of Organizational Paranoia
Organizational Paranoia
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In trying to understand the origins of these rather peculiar, and in many respects,
quite striking cognitions, social scientists have turned most often to the clinical
psychology literature, invoking a panoply of psychodynamic constructs (Cameron, 1943;
Colby, 1975). Colby (1981), for example, posited that paranoid cognition was the end
product of a “causal chain of strategies for dealing with distress induced by the affect of
shame-humiliation” (p. 518). The strategy of blaming others for one’s difficulties, he
postulated, functions “to repudiate the belief that the self is to blame for an inadequacy”
(p. 518). Such conceptions presumed, it should be emphasized, that the primary causes of
paranoid cognition were located entirely “inside the head” of the social perceiver, rather
than somehow connected to the social context within which such cognitions were
embedded, and to which they might have reflected some sort of attempted adaptation (see
Footnote 3).
In contrast to these clinical conceptions, recent social psychological theory and
research has advanced a very different perspective on the nature of paranoid social
cognitions, and one that affords considerably more attention to their social and situational
origins. Research in this vein has taken as a starting point two suggestive observations.
The first observation is that, in milder forms, paranoid cognitions seem to be quite
prevalent even among normal individuals. As Fenigstein and Vanable (1992) commented
in this regard, it is not unusual for ordinary people “in their everday behavior [to]
manifest characteristics--such as self-centered thought, suspiciousness, assumptions of ill
will or hostility, and even notions of conspiratorial intent--that are reminiscent of
paranoia” (p. 130). There are many social occasions, they go on to note, where people
may think they are “being talked about or feel as if everything is going against them,
resulting in suspicion and mistrust of others, as though they were taking advantage of
Organizational Paranoia
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them or to blame for their difficulties” (p. 133). On the basis of this evidence, Fenigstein
and Vanable concluded that the concept of paranoia needs to be broadened to “include the
thought processes that characterize everyday life” (p. 133).
The second observation pertains to the emergent and often transient nature of
these milder, more ordinary forms of paranoid cognition. As Robins and Post (1997)
observed colloquially, “Who among us, in reaction to a preemptory request to come
immediately to the front office, has not wondered, ‘What did I do now?’ ” (p. 3). Along
similar lines, Siegel (1994) commented that “almost everyone has had a mild experience
such as the vague suspicion that something is out there just waiting to get us . . . Many
people experience it when they are alone in the house at night or walk down an unfamiliar
street. Others may have the vague feeling that their life paths are being jeopardized by
jealous persons known and unknown” (p. 7). Findings from several recent survey studies
provide support for such observations, suggesting that paranoid-like perceptions,
including the perception that others are out to get one or that one has been the victim of a
conspiracy involving a romance, friendship, school or work are far from uncommon
(Butler, Koorman, and Zimbardo, 1995; Goertzel, 1994; Pew, 1996; Pipes, 1997; Melley,
2000).
These observations converge on two general propositions that are central to the
conceptual argument I wish to advance in this chapter. The first proposition is that these
more ordinary variants of paranoid cognition can be construed as forms of social
misperception better characterized by misplaced or exaggerated--rather than necessarily
false or delusional--distrust and suspicion of others. In this respect, such cognitions can
be construed as not unlike other forms of judgmental bias widely documented in the
social cognition literature (cf., Gilovich, 1991; Kunda, 1999). Second, as with other forms
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of social misperception, paranoid cognitions can be viewed as the logical end products of
an interaction between the social information processing strategies social perceivers use
to make sense of perplexing or threatening situations they encounter, and the features of
the social contexts in which those perplexing or threatening situations arise. Stated
another way, these ordinary and more benign forms of paranoid cognition can be viewed
as intendedly adaptive coping responses to disturbing situations rather than necessarily
manifestations of disturbed individuals (see Footnote 4).
As I argue next, situations in organizational life characterized by sudden,
unexpected or persisting forms of social uncertainty constitute an important class of such
situations. To advance this argument, it is useful to elaborate on the relationship between
social uncertainty and the disruption of presumptive trust.
Social Uncertainty and the Disruption of Presumptive Trust
In many situations that arise in organizational life, trust in others is implicit,
having acquired over time a tacit or taken-for-granted quality (Fine & Holyfield, 1996;
Garfinkel, 1963). In routine transactions with other organizational members, for
example, trust is often conferred rather automatically: members both trust others with
whom they interact and expect to be trusted by them in return. As Brothers (1995) aptly
observed in this regard, “Trust rarely occupies the foreground of conscious awareness.
We are no more likely to ask ourselves how trusting we are at a given moment than we
are to inquire if gravity is still keeping the planets in orbit” (p. 3).
Within organizational settings, individuals are likely to experience this sort of
presumptive trust in others when they are confident or assured of their place in the social
order (Garfinkel, 1963). In a perceptive analysis of the role such certainty plays in social
relationships, Hogg and Mullin (1999) posited, "People have a fundamental need to feel
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certain about their world and their place in it" (p. 253). Subjective certainty, they go on to
note, "gives one confidence about how to behave, and what to expect from the physical
and social environment within which one finds oneself (p. 253). Consistent with this
view, there is substantial evidence that, when social certainty is high, individuals
experience what Edmondson (1999) has aptly termed "psychological safety" when
relating to other members of a group or organization. This term, she emphasized, is meant
to suggest "neither a careless sense of permissiveness, nor an unrelentingly positive affect
but, rather, a sense of confidence that others will not embarrass, reject, or punish someone
for speaking up” (p. 354). On the basis of such certainty, individuals can adopt a sort of
diffuse or "depersonalized" (Brewer, 1981) trust in other organizational members--both
trusting others and expecting to be trusted in return (Kramer, Brewer, & Hanna, 1996). In
contrast, when individuals lack a sense of certainty regarding their relationship with other
group members, then such presumptive trust may not be so easily or readily forthcoming.
For such individuals, confidence in their footing in the social landscape of the
organization is less secure. In the absence of psychological safety, trust acquires a more
tenuous quality, and presumptive trust is replaced by presumptive distrust and wariness.
A impressive body of theory and research can be adduced in support of this
general proposition that people experience social uncertainty as an aversive, threatening
psychological state and that they will work hard to reduce it (Ashford, 1989; Ashford &
Cummings, 1985; Baumeister, 1991; Baumeister & Tice, 1990; Frank, 1985; Hogg &
Mullin, 1999; Swann & Read, 1981). This proposition is supported, additionally, by
equally strong evidence regarding the deleterious effects of loss of social certainty on
psychological and interpersonal functioning, including the disruption of presumptive trust
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in other people (e.g., Baumeister, Smart, & Boden, 1996; Baumeister & Tice, 1990;
Janoff-Bulman, 1992; Kramer, 1994; Zimbardo, Andersen, & Kabat, 1981).
Although indicative of a general relationship between social uncertainty and the
loss of trust in social settings, the question remains, “Under what conditions are
individuals likely to experience such social uncertainty in their intra-organizational
relations?” In particular, does social uncertainty contribute in any way to the
development of organizational paranoia? To develop answers to these questions, it is
useful to briefly examine an evocative study by Zimbardo, Andersen, and Kabat (1981).
When in Doubt: Perceiving and Coping with Social Uncertainty
Zimbardo, Andersen, and Kabat's (1981) now classic study on the origins of social
paranoia was inspired by a rather provocative, although at the time poorly understood,
clinical observation. Clinicians working within institutional settings had often noted a
correlation between gradual hearing loss and the onset of paranoid cogitation. For
example, it was noted that elderly hospitalized patients diagnosed as paranoid often had
significantly greater deafness compared to patients with other affective disorders.
Moreover, paranoid perceptions appeared to be more prevalent among those hard-ofhearing individuals whose deafness had a gradual, and therefore undiagnosed, onset and
course.
Drawing on such observations, Zimbardo et al. theorized that when hearing loss is
unexpected and gradual, patients are likely to remain relatively oblivious of their hearing
loss and its impact on their social relationships. This leads to the emergence of paranoidlike thinking as the hard-of-hearing individual tries to explain the “perceptual anomaly"
of not being able to hear what people around them are apparently saying (p. 1529).
Judging others around them to be whispering, the individual begins to ask, “About
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what?” These initial responses by the hard-of-hearing person can be construed as
reasonable attempts to make sense of a discomforting, but apparently quite genuine,
social experience. Consistent with the view described earlier of social perceivers as
“social auditor” motivated to monitor and make sense of others’ behavior, the hard-ofhearing person ponders, “Why are people suddenly whispering?” Such ruminations
inevitably turn self-ward: “Are they talking about me -- and, if so, why?”
Attempts to find an answer to this question are frustrated, however, by those
around the hard-of-hearing person, who vehemently deny they are whispering. As
Zimbardo et al. note, the persistent denial by others that they are whispering is likely to be
construed by the hard of hearing person as an intentional lie since it is so clearly at odds
with the evidence seemingly provided by their own senses. Thus, although intended to be
reassuring, these protestations of innocence by others that nothing is amiss only spur the
hard-of-hearing person to press more vigorously to find out what’s really going on. This
increasingly persistent behavior of the hard-of-hearing person creates, in turn, a
disconcerting sensemaking predicament for those around the hard-of-hearing person. As
Zimbardo et al. reason, “Without access to the perceptual data base of the person
experiencing the hearing disorder, [innocent bystanders and observers] judge these
responses to be bizarre instances of thought pathology” (p. 1529). As a consequence,
they actually do begin to whisper about the hard-of-hearing person, and do increasingly
shun them, as the persistent suspicions and increasingly aggressive accusations regarding
their alleged whispering become more and more upsetting.
These reciprocal misattributions, and the behaviors they engender, lead persons
experiencing hearing loss and those around them to become locked in a spiraling pattern
of mutual wariness and escalating hostility, punctuated by periodic social withdrawal. As
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a consequence, “the individual experiences both isolation and loss of the corrective social
feedback essential for modifying false beliefs (p. 1529). The system assumes a life of its
own, becoming, as Zimbardo et al. (1981) aptly put it, a “self-validating, autistic system”
in which “delusions of persecution go unchecked” (p. 1529).
Zimbardo et al’s perceptive analysis of the evolution of social paranoia illustrates
just how readily the disruption of presumptive trust within a social group can occur when
situational or contextual factors weaken or tear an individual’s connection to other group
members. Construed broadly, and with some interpretive license, it also raises the
provocative question as to whether there might be similar dynamics at play in the
development of organizational forms of such paranoia. Are there, for example, social or
structural "equivalents" of the sensemaking predicament confronted by Zimbardo et al.’s
hard of hearing patients found within organizational settings? If so, what might they be?
Playfully engaging this question, I argue next, generates some useful insights into the
social and structural antecedents of organizational paranoia. In particular, I propose that
certain "locations" within organizations are especially likely to foster the sort of
delibitating social uncertainty experienced by Zimbardo et al.’s "hard of hearing" patients,
setting in motion a similar chain of cascading paranoid-like cogitation.
Organizational Analogues of the “Hard-of-Hearing" Dilemma
As Salancik and Pfeffer (1978) once noted, in order to explain human behavior, it
is essential to examine the “informational and social environment within which [that]
behavior occurs and to which it adapts” (p. 226). One reason context is so consequential,
they argued, is that it selectively directs individuals’ attention to certain information,
making that information more salient and thereby increasing its impact on their
expectations about and interpretations of both their own and others’ behavior. This
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general social information processing argument has received substantial support from
both experimental research (e.g., Fenigstein & Vanable, 1992; Fiske, 1993; Fiske,
Morling, & Stevens, 1993; Taylor & Fiske, 1975; Vorauer & Ross, 1993) and field
research (e.g., Ashford & Cummings, 1985; Burt & Knez, 1995).
One implication of this social information processing perspective is that, when
trying to assess others’ trustworthiness, our intuitive social auditor’s efforts to monitor
and calibrate trustworthiness will be influenced by the particular features of the
organizational contexts within which such judgments are embedded. In particular, some
“locations” will facilitate such auditing, while others will sharpen constrain opportunities
to sample behaviors relevant to assessing such trustworthiness. In the following sections,
I review some of this evidence, using it to explicate a social information processing
perspective on the origins of organizational paranoia. In particular, I review several
streams of research that implicate some of the cognitive components and social
antecedents of organizational paranoia.
Social Uncertainty and Paranoia Within Hierarchical Relationships: Asymmetries in the
View from "Atop" and "Below"
Hierarchical relationships are obviously among the most important and prevalent
form of intra-organizational relationship. Among the hallmarks of such relationships are
significant asymmetries in power, status, access to information, and evaluative scrutiny
(Fox, 1974; Kanter, 1977a). From the standpoint of individuals located on the proverbial
“bottom” of such relationships (i.e., those who occupy positions of low power or status),
trust in those above them is critical because of their vulnerability and dependence. Those
on the bottom depend on those above them for a variety of important organizational
resources. These include tangible resources, such as promotions, pay increases, attractive
Organizational Paranoia
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assignments, desirable office space, staff support, and other resources needed to get their
work done. They may also depend on those above them for less tangible, but no less
important psychological resources, such as positive reinforcement, mentoring, social
support, and empathy. At the same time, such trust is problematic because individuals in
such situations often experience considerable uncertainty about the extent to which those
above them genuinely care about them and support them behind their back. In other
words, it is hard to know with confidence how they are regarded and where they stand in
their relationship. As a result of these uncertainties, individuals in such subordinate roles
lack precisely the kinds of information that is crucial for making informed judgments
about the trustworthiness of those on whom they depend.
The hierarchical relationship between graduate students and their faculty advisors
embodies many of these dilemmas of trust. The doctoral experience unfolds in a social
context that embodies high levels of perceived evaluative scrutiny (Zanna & Darley,
1987; Taylor & Martin, 1987; Kramer & Martin, 1995). Graduate students progressing
towards the doctoral degree are dependent on their faculty advisors for a variety of critical
resources, including financial support, opportunities for co-authorship on scholarly
papers, letters of recommendation, and approval of their dissertation research. They rely
on their advisors to serve as advocates in departmental meetings in which they are
evaluated, and hope they will buffer them from departmental politics that might otherwise
adversely affect their graduate careers. Moreover, they depend upon their faculty
members for many less tangible, although not less important, psychological resources,
such as intellectual encouragement and emotional support. All of these dependencies, and
the perceived vulnerabilities associated with them, are embedded in a highly evaluative
interpersonal and institutional context.
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For all of these reasons, the relationship between graduate students and their
faculty advisors provides a rich context in which to investigate the cognitive
underpinnings and judgmental consequences of paranoid social cognition within a
hierarchical organizational context. Accordingly, I recruited doctoral candidates and their
faculty advisors for a study ostensibly concerned with social perception and interpersonal
behavior in collaborative research relationships (see Kramer, 1996 for a more complete
description of the methods and findings). In actuality, the primary focus of the study was
perceptions of trustworthiness in these relationships. Twenty-six individuals (thirteen
students and their faculty advisors) volunteered for the study. To produce the raw data
for this study, autobiographical narratives were generated by asking students and their
faculty advisors to recall and describe all of the significant incidents and behaviors that
had occurred between them and that they felt affected the level of trust in their
relationship (see Footnote 5). The twenty-six narratives produced in this fashion provided
detailed developmental trust “histories” for the thirteen dyads.
These histories were impressive in terms of both the variety and range of trustrelated behaviors they encompassed. To get a deeper understanding of these narratives,
the data in these accounts were first analyzed in terms of the frequency of behaviors and
incidents that respondents identified as having critically influenced the development of
trust or distrust in their relationship. The first set of theoretical expectations I examined
pertained to the hypothesized implications of heightened vigilance of those in the more
vulnerable or dependent position in the relationship. Because of their greater dependence
and vulnerability, I expected that trust concerns would be more consequential for students
and that, consequently, they would evince greater vigilance about detecting and
processing trust-relevant information.
Organizational Paranoia
20
One implication of this heightened scrutiny and vigilance is that graduate students
will develop more elaborate and differentiated “mental accounting” systems for tracking
and coding trust-related transactions. According to this cognitive elaboration hypothesis,
students would be expected to be able to recall more trust-related incidents and behaviors
compared to their superordinate counterparts. The results of the study support this
hypothesis. Students recalled significantly more behaviors and incidents that they
construed as having impacted the level of perceived trust in their relationship compared
to faculty members. This pattern of findings, it should be noted, parallel recent arguments
by Fiske (1993) that people are vigilant and careful information processors when they
need to be, but often rely on stereotypes and other poorly articulated schemata of others
when they can get away with it. “The powerless need to try to predict and possibly alter
their own fates” (p. 624). This general conclusion is supported also by imaginative and
provocative work on asymmetries in victim-perpetrator accounts and memories
(Baumeister, Stillwell, & Wotman, 1990; Stillwell & Baumeister, 1997).
Additional analyses revealed several other patterns of interest. First, students and
faculty both tended to recall more things the other person had done that had adversely
impacted the level of trust between them, compared to things they had done, consistent
with self-serving recall biases observed in other studies (e.g., Messick & Sentis, 1983),
but the tendency was significantly greater among students. Thus, trust-building is
arguably more fragile and easily disrupted for them.
Based upon other research (Spranca, Minsk, & Baron, 1991), I expected that there
might also be differences in the salience (availability in memory) of acts of commission
versus omission, especially as a function of the perceivers’ position in the relationship. In
other words, because students are more dependent and vigilant, they will “pay” more
Organizational Paranoia
21
attention both to things done and not done. To evaluate this expectation, the data were
coded in terms of whether the trust-relevant incidents or behaviors that students and
faculty described reflected something the focal actor had actually done (an act of
commission) versus something they had failed to do (an act of omission). With respect to
the domain of trust-decreasing incidents, significantly more acts of omission than acts of
commission were described in student narratives compared to those of their faculty.
Thus, failures of action seemed to be especially salient to students. Stated differently,
students "noticed" (or cognitively coded) many more things that their faculty advisors
failed to do compared to their faculty counterparts.
If students are motivated to pay greater attention to their faculty’s behavior than
their faculty are motivated to pay to them, then it seems reasonable to argue also that acts
of omission and comission might invoke especially intense ruminative activity among
students. Because of their greater dependence and vulnerability, perceived violations of
trust are not only likely to loom larger (be more salient), but also prompt more
retrospective sensemaking activity for students. If this interpretation is correct,
differential evidence of such tendencies should emerge in respondents’ estimates of how
much time they spend thinking about such behaviors, incidents, and/or their relationship
in general. Student and faculty estimates of the time they spent ruminating about the
relationship support this conjecture. Specifically, students reported ruminating
significantly more than faculty.
A comparison of respondents' estimates of the amount of time they spent
ruminating about their relationship and their predictions regarding their counterpart’s
rumination suggested, moreover, a strong pattern of ego-centric projection (Goethals,
1986). Specifically, students’ estimates of faculty member's ruminative activity tended to
Organizational Paranoia
22
be anchored on estimates of their own rumination, causing them to overestimate the
amount of time their faculty spend thinking about them. Conversely, faculty estimates of
students’ ruminative activity appeared to be anchored on the amount of time they report
ruminating about the relationship, causing them, in effect, to underestimate the extent to
which students are ruminating about the relationship. These data thus provide suggestive,
even if somewhat indirect, indications of students' paranoid-like perceptions of the degree
to which they are under evaluative scrutiny even when not in the presence of faculty:
although they may be out of sight, students seldom think they are completely out of their
advisors’ minds.
This initial study serves as a documentation of some of the cognitive
underpinnings of asymmetries in the processing of trust-related information tied to
individuals' comparative position or location within their organizational relationships.
Much like Zimbardo et al.’s hard-of-hearing patients, those on the proverbial bottom of a
hierarchical relationship can easily come to think and feel that those above them are
always figuratively whispering about them behind their back. But are there other
circumstances in organizations that produce similar dynamics? Another factor that can
contribute to the development of organizational paranoia, I argue next, is the perception
of being a socially distinctive or atypical organizational member.
Perceived Social Distinctiveness, Social Uncertainty, and Paranoid Cognition
Perceptions of social distinctiveness reflect the relationship between individuals’
social identities and those who surround them. All human beings possess membership in
multiple social identity groups. As a consequence, people can categorize themselves--and
be categorized by others--in a variety of different ways. These include categorizations
Organizational Paranoia
23
based upon physical attributes (such as age, race, or gender), as well as categorizations
based upon social attributes such as religion, social class; and organizational identities.
Recognizing their importance, researchers have afforded a great deal of attention
in recent years to exploring how such social categorization processes influence social
perception and behavior within social systems (e.g., Kanter, 1977a; Tsui, Egan, &
O’Reilly, 1992; Turner, 1987; Wharton, 1992). Several conclusions emerge from such
research. First, social categories influence how individuals define themselves in a given
social situation, a process that Turner (1987) characterized as self categorization.
Specifically, research on self categorization has shown that individuals often categorize
themselves in terms of those attributes that happen to be distinctive or unique in a given
setting (Cota & Dion, 1986; Kanter, 1977a,b; Swan & Wyer, 1997; Taylor, 1981). For
example, if an individual is the only female member of a group, her distinctive gender
status may be afforded disproportionate emphasis when she tries to explain her own
behavior and the reactions of others to it. From a cognitive standpoint, the distinctiveness
of this category makes gender-based attributes more available during social information
processing. As a result, distinctive categories tend to “loom larger” during social
interaction, influencing the social inferences made by both actor and observer (Taylor,
Fiske, Etcoff, & Ruderman, 1978).
Extrapolating from such evidence, it can be argued that individuals who belong to
distinctive social categories are likely, all else equal, to be feel greater uncertainty and
more self-conscious than those belonging to less socially distinctive categories. Because
they feel that they are different from others or "stand out" in the group, they tend to
overestimate the extent to which they are under evaluative scrutiny by other group
members. This argument that self-categorization on the basis of distinctive or
Organizational Paranoia
24
exceptional status can contribute to the perception of being under evaluative scrutiny and
dysphoric self-consciousness is consistent with a considerable body of evidence regarding
the cognitive and social consequences of merely “being different” from other members of
a social group (Brewer, 1991; Kanter, 1977a,b; Tsui, Egan, & O’Reilly, 1992; Taylor,
1981). Such evidence suggests that such distinctiveness is often experienced, moreover,
as an aversive state (Frable, Blackstone & Scherbaum, 1990; Lord & Saenz, 1985). As
Brewer (1991) noted along these lines, “being highly individuated leaves one vulnerable
to isolation and stigmatization” (p. 478)..
In social information processing terms, one consequence of individuals’
uncertainty derived from simply feeling “being different” from others is that it prompts
intense sensemaking activity. We might expect such sense-making activitiy to be
especially pronounced when individuals are uncertain about precisely how much “being
different” from others really matters (e.g., its impact on whether they will be accepted by
others and the kind of treatment they will receive from them). In many respects, so-called
"token" members of social systems exemplify this quandry. Token status in groups is
based upon “ascribed characteristics (master statuses such as sex, race, religion, ethnic
group, age, etc.) or other characteristics that carry with them a set of assumptions about
culture, status, and behavior that are highly salient for majority category members”
(Kanter, 1977b, p. 966).
In her now classic discussions of the effects of token status on social perception
and interpersonal relations, Kanter (1977a,b) noted that individuals who are members of
token categories are likely to attract disproportionate attention from other groups
members, particularly those who enjoy dominant status in terms of their greater numerical
proportion. For example, she argued that females in many American corporations often
Organizational Paranoia
25
feel as if they are in the "limelight" compared to their more numerous male counterparts.
In support of these observations, Taylor (1981) demonstrated that observers often do
allocate disproportionate amounts of attention to individuals who have token status in
groups, especially when making attributions about group processes and outcomes. Lord
and Saenz (1985) subsequently provided an important extension of this early work by
showing how token status affects the cognitive processes of tokens themselves. Based on
their findings, they concluded that, “Tokens feel the social pressure of imagined audience
scrutiny, and may do so even when the ‘audience’ of majority group members treat them
no differently from nontokens” (p. 919).
On the basis of such evidence, it can be argued that individuals who have token
status in a social system will be more self-conscious and perceive themselves to be under
evaluative scrutiny to a greater extent than nontoken members. As a consequence, tokens
will tend to overestimate the extent to which they are the targets of other’s attention.
Relatedly, they will be more likely to overconstrue their interactions with other group
members--especially interactions involving nontokens--in personalistic, self-referential
terms. Evidence in support of this overly personalistic construal of social interaction
hypothesis was provided in a study of social perception among incoming Masters of
Business Administration (MBA) students at a major business school during the first term
of their two-year program (Kramer, 1994). The MBA classes at most business schools
are highly competitive groups. For example, individuals within these groups generally
care a great deal about their relative standing or “positional status” (cf., Frank, 1985) with
respect to their academic performance. At the same time, they also care a great deal
about their social standing in the group. In particular, students attach considerable value
to “fitting in” well and being accepted by the group (in part because they believe that they
Organizational Paranoia
26
are forming life-long associations, and that their classmates represent a potentially
invaluable network of several hundred “future contacts” on which they will draw
throughout their professional life).
From the standpoint of shaping how individuals’ construe their token or nontoken
status, business schools are interesting organizations also because, rather than conceal or
deemphasize social category-based information, such information is highlighted and
actively disseminated. At the Stanford University Graduate School of Business, for
example, detailed statistics as to the proportional representation of numerous social
categories within the group are e-mailed to each incoming MBA student. The "diversity"
of the group is a central topic during the formal orientation and socialization process. The
group’s diversity is frequently showcased as a theme in discussions about the
organizational culture. Thus, individuals are bombarded with precise information about
how typical they are along a variety of categorical distinctions, including their age,
gender, the prestige of the undergraduate institutions they attended, and the status of the
employers for whom they worked just prior to coming to business school.
Ostensibly, all of this information is provided to students in order to document
and foster appreciation for the impressive level of diversity within the group, a
characteristic that is highly valued by the organizational culture. Its psychological and
social impact, however, may go beyond these noble institutional motives. For example,
publicity about diversity also unintendedly draws attention to, and heightens the salience
of, these categorical distinctions--especially for those individuals who happen to be
statistically “deviant” from the population means. As a consequence, categorical outlyers
may feel less certain about where they stand in the social order. They both notice how
they are being treated—and, equally important, may feel especially noticed.
Organizational Paranoia
27
Because of this heightened vigilance and self-consciousness, they are more likely to
experience a more paranoid style of social perception and attribution compared to their
nontoken counterparts. This general idea was evaluated by comparing the level of
paranoid cognition among tokens and nontokens within the MBA culture. Token status
was defined in terms of several dimensions: gender, race, sexual orientation, and age.
Specifically, the “token” sample included black male, black female, “openly” gay
students, and unusually old and young students within the first-year MBA population.
The nontoken comparison group consisted of white male students.
To assess the levels of trust and distrust within these two groups, data were
collected on a variety of measures, including individuals’ level of perceived social
certainty and uncertainty, self-consciousness, level of social discomfort, perceived status,
and trust and distrust in the group. Several findings from this study are particularly
noteworthy. First, with respect to their self-perceptions, token group members reported
significantly higher levels of social uncertainty and self-consciousness compared to their
nontoken counterparts, both in classroom discussions and in social gatherings outside of
class. They also felt less comfortable raising and discussing personal issues compared to
nontokens. Moreover, they perceived themselves as fitting less well into the MBA
culture compared to nontokens.
As a second source of data, I used an event recall procedure, similar to that used
in the graduate student-faculty study described above, to elicit information regarding how
tokens’ construed their trust-related interactions with other group members. These data
were generated by asking MBAs to recall and briefly describe any and all experiences
they could think of that had in any way adversely affected their level of trust in either a
particular group member, or the group as a whole. The results are interesting in several
Organizational Paranoia
28
respects. First, tokens recalled significantly more instances of behaviors they felt had
adversely affected their trust in the group compared to nontokens. Inspection of these
lists reveal that the kinds of behaviors tokens construed as violations of trust were often
related to behaviors that appeared to call into question or invalidate their perceived
standing in the group. For example, one student described an incident where another
student “didn’t bother to return a phone call to me during finals week.” Similarly,
another noted that other students “ignored me at a party."
As a way of assessing differences in the seeming paranoia of tokens' and
nontokens' construal of their social interactions, second-year MBA students, who were
blind to the purpose of the study, were asked to read these recall lists and evaluate the
person who made the list along a number of dimensions. Raters knew only that they were
reading the accounts of new MBA students about their first-year experience in the
program. They were asked to form a global impression of the person who had generated
the list. They were asked to rate also, along with a variety of other measures, the general
level of “paranoia” of the person, using as a guideline the definition of paranoid cognition
presented earlier in this paper.
Several noteworthy results emerged from this procedure. First, tokens were rated
as angrier, more unhappy, and less trusting than nontokens. They were also more likely
to be rated as “whiners,” “ complainers” and “social losers" (defined as “people who just
naturally seem to have trouble fitting in”) compared to nontokens. Most importantly,
they were viewed as significantly more paranoid. These results suggest how social
observers may make fairly harsh judgments about others’ cognitions and perceptions
when the social context and interactional histories that give rise to those cognitions are
not readily available or weighted appropriately.
Organizational Paranoia
29
In putting these results in perspective, it is important to highlight several points.
First, although the data reveal a consistent pattern of difference between the construals of
token and nontoken group members that is in accord with the theoretical expectation, it is
necessary to emphasize that the claim here is not that tokens’ perceptions of being “over
observed” or treated differently are necessarily and/or completely in error. Previous
theory and research would lead one to expect that, in all likelihood, the behaviors of these
tokens are scrutinized more intently and that they are treated differently than other group
members. But, it is important to note, it is logically possible for individuals to both
actually be disproportionately observed relative to other group members and at the same
time to overestimate the extent to which they are being overobserved. In other words, the
perceptions of tokens may contain a "kernel of truth" and yet still reflect a systematic
cognitive bias or distortion. Similarly, it is possible for nontokens to actually pay more
attention, or afford different kinds of attention, to tokens and to nonetheless
systematically underestimate such overattention. In conjunction, these two biases lead to
a “spreading apart” of their estimates of social scrutiny and beliefs about the social reality
obtaining between them. The fragility of trust in such situations thus derives, it should be
noted, not only from the token’s social uncertainty, but also the uncertainty for nontokens
about how to treat the token and how to act around them.
It should also be emphasized that the argument here is not that all individuals in
token roles in organizations experience paranoid cognitions, or that token status per se
leads to paranoid cognition. For example, individuals whose token status is predicated
upon more positive social stereotypes may view the disproportionate attention they attract
as a positive form of social distinctiveness in the group. Consistent with this point, one
young female Japanese MBA student in the study sample felt that she received extra
Organizational Paranoia
30
“social credits” for her status. Because she was Japanese, rather petite, and quite softspoken, she felt people assumed she was not only exceptionally bright, but also modest,
sincere, hardworking, and a good team player. But she still felt as if she were regarded
specially and treated differently because of her gender and race. Even excelling on
positively valued dimensions, as Brewer (1991) noted, generates the perception of social
distance and fear of potential rejection. Thus, whether one “basks” or “bakes” in the
limelight of others’ perceived scrutiny clearly depends upon how they construe their
distinctiveness and the kind of social attention it is perceived to invite.
Social Uncertainty and the Sinister Attribution Error: Paranoia Among Organizational
Newcomers
Another factor that can contribute to social uncertainty and the onset of
situationally-induced paranoia is an individual’s status with respect to their tenure in a
social system. There are several reasons why tenure status--defined as the length of time
an individual has been a member of a group or organization--might be correlated with
their susceptibility to paranoid social cognitions. First, newcomers to a group are likely to
have greater uncertainty and insecurity regarding their standing in the group. Because
their place in the social order is still being negotiated, they are likely to be concerned with
such things as how well they will fit into the group’s culture, and also whether or not they
will be accepted by other group members. They may be anxious as well about how well
they will perform in their expected roles. As a result of such uncertainties, newcomers
are likely to be relatively self-conscious during their social interactions. They may,
consequently, experience a form of intra-group anxiety akin to, and no less distressing
than, the sort of inter-group anxiety described by Stephan and Stephan (1985). For them,
life is not déjà vu, but as Weick (1995) aptly put it, vuje de.
Organizational Paranoia
31
In contrast, as tenure increases, individuals gain considerable information
regarding their standing in a group. As experienced group members, they become
knowledgable about, and comfortable with, group norms and routines. In effect, such
“oldtimers” know where they stand because they have successfully negotiated their place
in the group or organization (cf., Fine & Holyfield, 1996; Moreland, 1985; Moreland &
Levine, 1989). As a result, their uncertainty--and the social anxieties that attend such
uncertainty--are likely to be relatively low.
Because their social uncertainty, and the motivation to reduce it, are both high,
newcomers to a group should, all else equal, be fairly vigilant and proactive when seeking
diagnostic information regarding their standing (Ashford, 1986, 1989; Ashford &
Cummings, 1985; Morrison, 1993). Accordingly, they will find salient, and actively
process, information about how they are treated during their interactions and exchanges
with other members as clues to their standing in the group.
From an attributional standpoint, unfortunately, the diagnostic value of such
information is often problematic because the correct construal or interpretation of many
social interactions among group members is often ambiguous, and especially so for
newcomers. The cause of another person’s behavior is almost always subject to multiple
interpretations, making the attribution process quite difficult even for the most motivated
intuitive scientist. For example, the fact that a faculty colleague in a university
department fails to say hello to another faculty member as they pass each other in the
hallway on a Monday morning may reflect a personalistic cause (the colleague is angry at
the faculty member for something said or did at the last faculty meeting). However, there
are also many nonpersonalistic causes that can be invoked to explain this same behavior
Organizational Paranoia
32
(e.g., he was preoccupied by a particularly nasty faculty meeting earlier that morning and
did not even notice the other person as they passed each other).
From the perspective of normative attribution models, individuals should discount
the validity of any particular explanation for another person's behavior when multiple,
competing explanations for that behavior are available (Kelley, 1973; Morris & Larrick,
1995). Thus, even when individuals suspect they are the target or cause of another’s
behavior, they should discount this personalistic attribution until more conclusive
evidence is available. However, as already noted, and despite the logical
inappriopriateness of doing so, people often make overly personalistic attributions of
others’ actions even when competing explanations for those actions are readily available
(Fenigstein, 1979; Fenigstein & Vanable, 1992; Greenwald, 1980; Vorauer & Ross,
1993). Extrapolating from this research, it might be expected that newer members of an
organization will be, all else equal, more self-conscious and more likely to construe their
interactions with other organizational members in overly personalistic terms, especially
compared to those with longer tenure in the group.
This tendency may be especially pronounced, moreover, with respect to unequal
status interactions (i.e., interactions between lower and higher status group members),
because such interactions will be particularly salient to newcomers, and processed more
intensively by them. For example, because of their greater evaluative anxiety, to the
newly hired assistant professor in a department, interactions involving senior colleagues
will be more noticeable and processed more extensively than comparable interactions
with other assistant professors. Thus, an ambiguous act such as passing one by in the
hallway without saying hello may be attributed to simple rudeness, arrogance, or social
awkwardness if done by another new assistant professor. The same behavior by a senior
Organizational Paranoia
33
colleague, however, may be construed more ominously as evidence that the person
doesn’t like one or did not one’s hiring in the first place. According to this logic, the
tendency to make overly personalistic attributions about anothers' behavior should be
particularly pronounced with respect to interactions involving newcomers and those with
longer tenure.
Support for this sinister attribution bias or error was provided in a recent study
(Kramer, 1994) using a vignette methodology similar to that employed by Fenigstein
(1984) but adapted to an organizational context. Participants in this study were all MBA
students from the Stanford Business School. They were told they would be participating
in a study that was concerned with how MBAs perceive their interactions with other
MBAs within the school. They were asked to read a series of eight vignettes, each of
which described a hypothetical interaction between the participant in the study and
another MBA. In each vignette, study participants found themselves in the role of ‘target’
of a transgression which called into question their standing or which entailed a potential
violation of trust. The status of the perpetrator in the scenarios was varied, so that in half
the experimental conditions the offense was committed by a first-year MBA student, and
in the other half it was committed by a second-year student. For example, in one
vignette, students were asked to imagine the following situation, “You are having lunch
with a group of first- and second- year students that you have just met. You are telling a
joke that you consider quite funny. Suddenly, right in the middle of your telling the joke,
one of the [first/second] year students in the group gets up and leaves.”
For each vignette, two explanations for the perpetrator’s behavior were provided.
One explanation suggested a personalistic (target-relevant) attribution, implying the
perpetrator’s behavior was intentional and directed at the target. For example, it was
Organizational Paranoia
34
suggested that the reason the student stood up and left is that he or she “thought your joke
was uninteresting.” The other suggested a nonpersonalistic (target-irrelevant) attribution.
For example, it was stated the reason the person got up and left is that he or she “suddenly
remembered they had an appointment.”
Paranoid social cognition was assessed by comparing individuals’ judgments
regarding the plausibility of the personalistic versus nonpersonalistic attributions for the
perpetrator’s behavior. Analysis of these data revealed a number of effects supportive of
the theoretical expectations. First, there was a main effect for tenure of target, such that
first year students were significantly more likely to make personalistic attributions
regarding a perpetrator’s behavior compared to second year students. More importantly, a
significant interaction between target and perpetrator tenure was also observed.
Specifically, first year students were particularly likely to make personalistic attributions
when the perpetrator was a second year student compared to when the perpetrator was
another first year student. In contrast, second year students’ attributions reflected little
sensitivity to the tenure of the perpetrator.
In further support of the argument, correlations revealed that newcomers were
more self-conscious on average than second years. Additionally, first-year students who
scored high on a scale measuring dispositional public self-consciousness were more likely
to make overly personalistic attributions compared to those scoring low on the scale.
Technologies That Foster Organizational Paranoia: The Fragile Trust Between Auditors
and Those They Audit
Another factor that can contribute to the development of organizational paranoia
is the use of technologies to monitor employee behavior. Organizations typically adopt
such technological remedies when doubts about employee trustworthiness are present or
Organizational Paranoia
35
in the hope of deterring anticipated untrustworthy behavior. Enthusiasm over such
remedies to managerial trust problems has been considerable, as evidenced by the rapid
infusion into the workplace of surveillance systems and f electronic monitoring of
employee performance. For example, according to Aiello (1993), over 70,000 U. S.
companies purchased surveillance software between 1990-1992, at a cost of more than
$500 million dollars.
Although reliable data regarding the overall impact and efficacy of these systems
is still hard to come by, there is some evidence that such systems can foster paranoid-like
reactions among employees. Ironically, they may even elicit the vary behaviors they are
intended to suppress or eliminate. In a recent discussion of this evidence, Cialdini (1996)
identified several reasons why monitoring and surveillance can disrupt trust within an
organization. First, when people think their behavior is under the control of extrinsic
motivators, their intrinsic motivation to engage in that behavior may be reduced. Thus,
surveillance may actually undermine individuals’ willingness to engage in the very kinds
of more trustworthy behaviors such monitoring is intended to induce or ensure. For
example, some organizations have begun to use compulsory polygraphs, drug testing, and
other forms of mass screening to deter such behavior. Innocent employees forced to
undergo these procedures, however, may become less committed to internal standards of
honesty and integrity in the workplace, even though they may have never used drugs or
cheated. Moreover, honest employees may begin to assume there must be a problem with
others’ trustworthiness. After all, why would a company be spending thousands of
dollars on surveillance if there wasn’t a problem? Thus, although intended to detect or
deter the few who might cheat, such systems unintendedly weaken beliefs about
collective trustworthiness within the organization.
Organizational Paranoia
36
Cialdini (1996) has noted also that monitoring and surveillance systems
communicate to employees that they are not trusted, which potentially breeds mistrust
and resentment in return. Thus, individuals may begin to be suspicious about those
implementing such systems. What are they after? Why don’t they trust us? Does that tell
us something about their view of human nature? Monitoring systems designed to improve
the quality and reliability of service can also foster paranoia. For example, Hochschild
(1983) described how fear of monitoring adversely impacted organizational trust and
customer service among flight attendants at a major airlines. The airline implemented a
policy whereby passengers were encouraged to provide feedback about the quality of
flight attendant service by writing letters to the company. From the Flight Attendant's
perspective, no matter how justified or unjustified the complaint, such letters would
automatically be placed in their file. The resultant climate of resentment and suspicion
created by this policy was further intensified because flight attendants feared that
“passengers” they were serving might not even really be passengers at all. Instead, they
might be airline supervisors working undercover to monitor their performance. Thus, a
system intended to produce more trustworthy (reliable) and friendly service encounters
unintendedly produced fearful, suspicious ones.
Other recent evidence suggests that the corrosive effects of surveillance extend to
those who are actually doing the surveillance, breeding a form of supervisor paranoia
about those they watch. Several studies have shown, for example, that the act of
surveillance increases surveillant distrust over those they monitor (Kruglanski 1970,
Strickland 1958). This finding usually has been explained in terms of self-perception
theory. According to self-perception theory, peoples’ attitudes and beliefs are often
shaped by observations of their own behavior. Thus, if I find myself watching others for
Organizational Paranoia
37
signs of untrustworthiness, I may come to believe that people in the organization
obviously need to be watched (after all, why would I be investing so much time and
energy in watching them if watching them wasn't necessary or prudent?). Moreover, I
may come to the conclusion my surveillance is working, even when in fact it is having no
effect at all. If I detect no one cheating, I might infer that my surveillance has
successfully deterred the temptation to cheat. Note that the rival hypothesis that no
cheating would have occurred even without monitoring is less likely to seem plausible,
given the “base-rate” suspicion that monitoring is needed.
Less obvious, but no less insidious in terms of their consequences, are the
behaviors that surveillants are less likely to engage in when surveillance and other
substitutes for trust are utilized in organizations. When managers rely on technological
solutions to reduce their uncertainty about others' trustworthiness, they may stop doing
other things, such as taking other more constructive measures to assess and build trust. As
one executive who had implemented a computer monitoring system called Overview
mused, “If I didn’t have the Overview, I would walk around and talk to people more . . . I
would be more interested in what people are thinking about” (quoted in Kipnis 1996, p.
331). Thus, systems intended to guarantee trust may, ironically, prevent it from building.
They not only make it more difficult for employees to demonstrate their trustworthiness,
but also for managers to detect or discern that trustworthiness.
Once in Doubt, Always in Doubt: The Self-Sustaining and Self-Entrapping Character of
Paranoid Social Cognition
All else equal, it might seem as if the various misperceptions and judgmental
distortions described thusfar would be rather difficult for social perceivers to sustain.
Organizational Paranoia
38
After all, as noted earlier in this paper, there is a considerable body of empirical research
suggesting that, when making judgments about others’ trustworthiness, people tend to be
fairly vigilant social auditors, paying close attention to others' behavior and mindfully
evaluating that evidence for signs of trustworthiness or its absence. From the standpoint
of such research, even if we can understand the initial circumstances that give rise to
paranoid cognitions, we might expect such misperceptions and judgmental errors to be
self-correcting over time. For example, as individuals acquire evidence that their fears
and suspicions regarding other organizational members turn out to be exaggerated or
groundless, those fears and suspicions should diminish. Perceptions, in other words,
should eventually converge on reality. Yet, in contrast to this expectation, paranoid
perceptions seem to enjoy what Pruitt (1987) aptly characterized as a “flinty” persistence.
The persistence of such perceptual errors invites consideration of some of the
dynamics that help create and sustain them. Research suggests a number of cognitive,
behavioral, and social dynamics that may contribute to the resilience of paranoid
cognition in organizations. These self-sustaining and self-entrapping characteristics of
paranoid perceptual systems reflect two difficulties that suspicious social perceivers
routinely confront. The first pertains to the paranoid perceiver’s difficulty in generating
usefully evidence for making judgments about others’ trustworthiness. The second
concerns difficulties such perceivers have in trying to learn from those experiences they
do generate. As I will suggest, the paranoid social auditor is neither good at collecting
data or drawing the right lessons from it.
Difficulties in Generating Trust-relevant Experience
As with other forms of social learning, learning about others’ trustworthiness
requires amassing relevant evidence regarding others’ trustworthiness, and extracting
Organizational Paranoia
39
reasonable inferences and generalizations from that evidence. For example, in order to
learn the true prevalence or distribution of trustworthiness within a given population,
individuals must sample widely and representatively from that population. Put another
way, individuals must have both sufficient and representative personal experiences with
social trust in order to generate veridical or faithful theories about other people’s
trustworthiness.
To generate such experiences, individuals must be willing to engage in
appropriate forms of risky “experiments” with respect to trusting others. They must then
monitor the consequences of those experiments in order to probe the limits or boundaries
of trust (Hardin, 1992). Obviously, individuals are most likely to engage in such
experiments in situations where they hope for or expect a positive payoff. However, such
experiments in risk-taking require that individuals expose themselves to both the prospect
of misplaced trust and misplaced distrust. In any words, one must be willing to be risktolerant enough to experience mistakes in both directions. Any systematic bias in the
generation of experimental data samples runs the danger of leading to a skewed or
truncated portrait of the distribution, pushing individuals toward inferences riddled with
one of two errors (too much trust or too little). As Hardin (1992) and Gambetta (1988)
have argued along these lines, differences between low and high trusters’ ex ante
presumptions about others’ trustworthiness (or lack of trustworthiness) can differentially
impact the frequency with which they are likely to generate these crucial learning
opportunities. As Gambetta (1988) noted, distrust is very difficult to invalidate through
experience, because it “prevents people from engaging in the appropriate kind of social
experiment” (p. 234, emphasis added). Moreover, he argues, “it leads to behavior which
bolsters the validity of distrust itself” (p. 234). As a consequence, presumptive distrust
Organizational Paranoia
40
tends to become perpetual distrust. Findings from computer simulations (Bendor,
Kramer, & Stout, 1991) and laboratory experiments (Fenigstein & Vanable, 1992;
Kramer, 1994) support this argument.
An instructive parallel to this argument can be found in research on the dynamics
of the development and persistence of patterns of hostile attribution among aggressive
children (Dodge, 1985). Such children, Dodge found, tend to approach social interactions
“pre-offended.” They enter social transactions with a state of heightened vigilance and
prepared for the worst in their social encounters. Because of this stance, they end up,
ironically, eliciting through their own pre-emptive and defensive behaviors the very
outcomes they most dread. In much the same fashion as these overly aggressive boys, the
paranoid perceiver is perceptually vigilant to detecting signs of lack of trustworthiness in
others. They are prepared for the prospect of trust abuses and prone, as a result, to code
even ambiguous encounters as further evidence of tainted trustworthiness. Because the
paranoid perceiver’s behavior is grounded in presumptive wariness, it ends up eliciting
the very sort of uncomfortable, distant interactions that reinforce mutual or reciprocated
wariness, suspicion and discomfort. Thus, a dubious set of assumptions and nagging
doubts serve as a foundation for an equally questionable set of social strategies for
dealing with them.
Along related lines, Gilovich (1991) has elaborated another reason why people
may be able to sustain beliefs in questionable beliefs and counter-productive interpersonal
influence strategies. Because a given social orientation or strategy is initially thought to
be effective, he notes, only that orientation or strategy is likely to be employed when
similar-seeming situations are encountered. As a consequence, a person never learns
what would have happened had a different interpretation of the situation given or
Organizational Paranoia
41
approach taken. As a consequence, the individual cannot (or, more accurately, simply
does not) assess either the true adaptiveness of the orientation or effectiveness of the
strategy it seems to dictate.
This pattern of dysfunctional social interaction can be aided and abetted, Gilovich
goes on to note, by a self-fulfilling prophecy. Like someone who believes that the only
way to get ahead is to be competitive or come on strong when dealing with other people,
such a person will consistently push too aggressively for what he or she wants. The
occasional success will “prove” the wisdom of the rule, and the individual never learns,
as a result, that an alternative strategy might have been even more effective. As Gilovich
noted further, “Because no single failure serves to disconfirm the strategy’s effectiveness
(after all, nothing works all the time), the only way it can be shown to be ineffective is by
discovering that the rate of success is lower with this strategy than with others” (p. xx).
Given that alternative strategies are not employed and their consequences not
systematically evaluated, the person never discovers the strategy they are using is suboptimal, or that the theory behind it in error. Equally important, they never come to
realize that the model of self, others, and the world on which the rule is predicated is in
error. As Kelley and Schmidt (1989) noted in an analysis of the dynamics of overly
aggressive boys, “with their apparent belief that persistence in coercion finally works,
aggressive boys are likely to develop sustained exchanges of aggression,” fully believing
their experiences bears out the necessity for such belief (p. 256).
In elaborating on this idea, it should be emphasized also that, because of their
other-focused orientation, paranoid perceivers are also unlikely to discern how their own
actions end up eliciting behavior from others that ironically sustain and justify their view
that the world around them as populated by unreliable and untrustworthy others. An
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42
analogy can be drawn, in this regard, with the experience of freeway drivers who are
either much faster than, or much slower than, other drivers in their environment.
Consider the case first of the very fast driver. For these extremely impatient, hurried,
time-urgent drivers, the daily experience on the freeway is one of persistent annoyance
and frustration as countless slow, incompetent drivers are continually found to be in their
way. Each press of the pedal and each lane change generates yet another interaction with
yet another incompetently slow and inconsiderate driver, thwarting their progress and
hindering them from reaching their destination in a timely fashion. Over time, such
drivers are likely to develop a view of the world as populated by terrible drivers. On
average, their experience is that the people around them are bad (overly cautious, stupid,
etc.) drivers relative to their own beliefs about efficient and prudent driving speeds.
Consider, on the other hand, the experience of the very slow and extremely cautious
driver navigating on the same freeways. From the standpoint of these drivers everyone
else on the freeway seems always to be in a hurry. Other drivers aggressively honk and
gesture rudely as they pass by. The world of the slow driver is a world populated by
reckless, angry, and impatient people.
In both instances, however, it is the simple fact that these social actors remain
“out of synch” with the rest of the world that leads to their self-generated and selfsustaining theories regarding others’ basic hostility, unreliability and lack of
trustworthiness (see Footnote 6). Note also that, because of the positive illusions that
social perceivers so easily sustain about themselves, they are unlikely to realize fully how
their own behavior might even elicit some of the behavior from other drivers that they
find so annoying. Thus, the fast reckless driver may prompt greater caution and slowing
Organizational Paranoia
43
down of those around them, while the slow driver may actually cause people to speed up
and go around more than might otherwise happen.
Of course, social scientists trying to develop and test theories about trust and
trustworthiness in the experimental laboratory tend to be mindful of such threats to the
internal and external validity of their inferences about human nature. Ordinary social
perceivers, however, are less likely to think spontaneously in such terms. Instead, they
are caught up in a fluid, dynamic world of purposeful action. They are likely to think of
their actions as moving them toward goals, rather than opportunities to test hypotheses
about human nature. Thus, beliefs about others’ trustworthiness tend to develop
incidentally and only after the fact. Such beliefs are residues of social experience, rather
than intended products of it.
Difficulties in Learning From Experience
Not only do paranoid social perceivers confront significiant barriers with respect
to generating representative and diagnostic samples of others’ behavior, they also face
formidable difficulties in drawing appropriate inferences and lessons from the
experiential samples they do manage to generate. Because of their presumption that
others around them lack trustworthiness, the perceived diagnostic value of any particular
social cue or bit of potentially diagnostic data is, from the outset, tainted. As Weick
(1979) noted in this regard, because all social cues are potentially corruptible, it is easy to
assume that they are in actuality corrupted. To illustrate this point, he cites an interesting
historical example. The day before the Japanese attack on Pearl Harbor, an American
naval attache had informed Washington that he did not believe a surprise attack by the
Japanese was imminent. To justify his prediction, he cited the ‘fact’ that the Japanese
fleet was still stationed at its home base. The clear and compelling evidence for this
Organizational Paranoia
44
conclusion, he noted, was that large crowds of sailors could be observed happily and
casually strolling the streets of Tokyo. Without sailors, the fleet obviously could not have
sailed. If the sailors were still in port, therefore, so was the fleet. Q. E. D.
What the attache did not know—and, more importantly, failed to even imagine-was that these “sailors” were in actuality Japanese soldiers disguised as sailors. They had
been ordered to pose as sailors and stroll the streets to conceal the fact that the Japanese
fleet had, in fact, left port and was currently steaming towards Pearl Harbor. From the
perspective of the Japanese, this ploy was a brilliant example of what military strategists
call "strategic disinformation". The purpose of strategic disinformation is, of course, to
mislead an adversary about one’s true capabilities, intentions or actions (Kramer,
Myerson, & Davis, 1990). In this instance the deception worked beautifully.
In elaborating on the implications of this incident, Weick noted that the very
desire and determination of the attache to find a “fool-proof” cue about Japanese
intentions, made him, ironically, more vulnerable to manipulation about the nature of
those intentions. Quoting a passage from Goffman (1969), Weick reasoned that, “the
very fact that the observer finds himself looking to a particular bit of evidence as an
incorruptible check on what is or might be corruptible, is the very reason he should be
suspicious of this evidence” (p. 172). After all, Weick notes, “the best evidence for him is
also the best evidence for the subject to tamper with (p. 173)
From the perspective of the paranoid social perceiver, of course, the attache’s
experience provides dramatic proof of what happens when individuals allow their
vigilance to become too lax. Innocence regarding others’ trustworthiness can be too
readily assumed, and with fatal consequences. In a world presumed to be sinister, social
cues are always corrupted and always in a predictably dangerous direction. As Weick
Organizational Paranoia
45
(1979) pointedly observes, “When the situation seems to be exactly what it appears to be,
the closest likely alternative is that the situation has been completely faked” (p. 173).
From the standpoint of the paranoid social perceive, the fleet, figuratively speaking, has
always stealthily sailed and sailors are never just sailors.
Ironically, even the complete absence of any cues at all can be construed as a
powerful form of confirmatory evidence to the paranoid social perceiver. Dawes (1988)
has provided a nice illustration of this possibility in his discussion of the debate over the
necessity of internment of Japanese-Americans at the beginning of the Second World
War. The question, of course, was the safety of American society given the presence of a
sizable contingent of Japanese-Americans in its midst in the middle of a war. Where
would their loyalties lie? Could they be trusted? When the late Supreme Court Chief
Justice Earl Warren (then Governor of California) testified before a congressional hearing
regarding the wisdom of internment, one of his interrogators noted that absolutely no
evidence of espionage or sabotage on the part of any Japanese-Americans had been
presented or was available to the committee. Thus, there was absolutely no objective
evidence of danger at all. Warren’s response as to how best to intrepret this absence of
evidence is revealing. “I take the view that this lack [of evidence] is the most ominous
sign in our whole situation. It convinces me more than perhaps any other factor that the
sabotage we are to get, the Fifth Column activities we are to get, are timed just like Pearl
Harbor was timed” (p. 251). He then went on to add, “I believe we are just being lulled
into a false sense of security (p. 251). When a lot is perceived to be at stake, the absence
of reassuring information can be regarded as just as informative and compelling as the
presence of threatening information.
Organizational Paranoia
46
Recent research suggests other cognitive “toeholds” for the development of
paranoid cognition in organizations. As several scholars have noted, it is easier to destroy
trust than to create or sustain it (Barber 1983; Janoff-Bulman, 1992; Meyerson, Weick, &
Kramer, 1996; Slovic, 1993). Slovic (1993) has argued that there are a variety of factors
that contribute to difference in trust-building versus trust-eroding processes. First,
negative (trust-destroying) events are more visible and noticeable than positive (trustbuilding) events. Second, trust-destroying events carry more weight in judgment than
trust-building events of comparable magnitude. As evidence for his asymmetry principle,
Slovic evaluated the impact of hypothetical news events on people’s trust judgments and
found negative events had more impact on trust judgments than positive events. Slovic
noted further that asymmetries between trust and distrust may be reinforced by the fact
that sources of bad (trust-destroying) news tend to be perceived as more credible than
sources of good news.
Other related evidence suggest that violations of trust tend to "loom larger" than
confirmations of trust. For example, studies of individuals’ reactions to trust betrayals
suggests that violations of trust are highly salient to victims, prompting intense
ruminative activity, and evoking greater attributional search for the causes of the violation
(Bies, Tripp, & Kramer, 1997; Brothers, 1995; Janoff-Bulman, 1992). To the extent that
violations of trust are coded as losses, they should loom larger than "mere" confirmations
of trust of comparable magnitude. For example, failure to keep a promise should have
more impact on judgments about trustworthiness than "merely" keeping a promise. This
general argument is supported as well by evidence that cognitive responses to positive
and negative events are often highly asymmetrical (Peeters & Czapinski, 1990). In
aggregate, such asymmetries imply that information supportive of a stance of distrust
Organizational Paranoia
47
should be weighted and evaluated differently than information of the same magnitude that
is supportive of trust. For the paranoid social perceiver, such asymmetries are likely to be
even more salient and pronounced because of the perceptual readiness to detect bad
(trust-destroying) versus good (trust-affirming) evidence.
There are also a number of social dynamics that can contribute to the emergence
and maintenance of organizational paranoia. The first concerns the role of gossip in the
diffusion of paranoia. Recent research indicates that information that provides grounds
for distrust may diffuse through a social system more rapidly than information pertaining
to trust. For example, Burt and Knez (1995) showed how network structures, and the
social dynamics they create, differentially affect rates of diffusion of trust-relevant versus
distrust-related information. Using a sample of managers in a high tech firm, they
investigated the influence of third-parties on the diffusion of trust and distrust within
managers’ networks. Burt and Knez argued that third parties are more attentive to
negative information, and often prefer negative gossip to positive information and gossip.
Consistent with their general theoretical expectation, they found that, although both trust
and distrust were amplified by third-party disclosures, distrust was amplified to a greater
extent than trust. As a result, judgments about distrust had, as Burt and Knez put it, a
“catastrophic” quality to them.
A Model of Organizational Paranoia: How the Intuitive Social Auditor Goes Astray
In the preceding pages, I have attempted to lay a foundation for the general
argument that social uncertainty plays a central role in the development of organizational
paranoia. To advance this argument, I have invoked a number of theoretical constructs
and empirical findings from a number of recent and disparate streams of social cognitive
theory and research. It may be useful, accordingly, to attempt to pull the various strands
Organizational Paranoia
48
of theory and data more tightly together. Accordingly, Figure 1 is offered as a schematic
representation of a social information processing or “auditing” model of organizational
paranoia.
[Insert Figure 1 about here]
As noted earlier, a prominent assumption of such models is that a complete
understanding of organizational paranoia--or any form of social cognition, for that matter-requires recognition of the influence that the context in which cognition is embedded
exerts on social judgment and inference. From the perspective of such a framework, what
the intuitive social auditor sees and infers with respect to trust depends quite literally on
where he or she stands in the organization.
As the figure indicates, social uncertainty is presumed to play a central role in
initiating a cycle of social appraisal and coping that fosters paranoid-like perception and
behavior. Specifically, social uncertainty induces several psychological states, including
heightened self-consciousness, heightened perceptions of evaluative scrutiny, uncertainty
about one’s status in the group, and reduced perceptions of psychological safety.
Because social uncertainty and the psychological states it engenders are aversive
states, individuals are motivated to make sense of, and attempt to reduce or eliminate, this
uncertainty. The more discomforting and aversive the uncertainty, the greater the
motivation to do so and the more earnest the effort at uncertainty reduction.
The model assumes that these initial attempts at sensemaking and uncertainty
reduction reflect intendedly adaptive appraisal and coping responses. In other words, an
assumption of the model is that individuals experiencing social uncertainty engage in
what they construe as reasonably vigilant appraisal and mindful action. If these initial
attempts at uncertainty reduction are successful, feelings of psychological safety are
Organizational Paranoia
49
enhanced, self-consciousness diminished, and the perception of being under evaluative
scrutiny reduced. Thus, trust can begin to build and the individual's attention can be
claimed by other emergent concerns.
However, when individuals' efforts at uncertainty management are unsuccessful,
social vigilance and appraisal are characterized by a hypervigilant mode of social auditing
and a tendency to engage in dysphoric rumination about one’s perceived problems. As
suggested by the figure, hypervigilance and rumination are posited to enjoy a circular
causal relationship. Specifically, hypervigilant appraisal of social information tends to
generate additional "raw data" about which the paranoid social perceiver is likely to
ruminate. Such rumination helps generate, in turn, additional and ever more sinister
"hypotheses" that push the already hypervigilant social auditor towards ever closer
scrutiny of others' actions.
Hypervigilance and dysphoric rumination contribute to several distinct models of
paranoid-like social misjudgment and misperception. Specifically, they foster the
cognitive elaboration of individuals' trust-related "mental accounts," the overly
personalistic construal of social interaction and sinister attribution bias.
These cognitive distortions and biases result in heightened concerns about others’
trustworthiness, fostering self-protective or defensive behaviors. These behaviors include
behavioral inhibition (e.g., reluctant to engage in personal self-disclosure) and social
withdrawal. Unfortunately, these behaviors tend to elicit responses from others that
exascerbate the paranoid perceiver’s difficulties. Specifically, they foster a tendency for
those around the individual to attribute paranoia to them and a reluctance to interact with
the individual. These responses contribute to further social uncertainty on the part of the
paranoid perceiver. Thus, the cycle has a self-entrapping or autistic character to it.
Organizational Paranoia
50
The model does not, it should be emphasized, provide a complete account of all of
the causal factors that influence the development of paranoid cognition within
organizations. In this respect, the model is offered as a “middle range” account that serves
to organize and integrate a fair amount of what is currently known about the cognitive
underpinnings of organizational paranoia and their origins (see Footnote 7). The model is
offered as a
heuristic device for stimulating further research, rather than intended as a final statement.
Reducing Organizational Paranoia: Rendering Trust Less Elusive and Less Fragile
The model of organizational paranoia developed in this chapter and the evidence
presented in support of it suggests how readily organizational paranoia can gain a toehold
and flourish within organizational situations where high levels of social uncertainty exist.
The analysis identifies a variety of factors that contribute to the emergence of
organizational paranoia, and that help explain the resilience of such paranoia even in
situations where only the flimsiest and most ambiguous evidence exists to support it. The
model also makes clear some of the deleterious consequences associated with such
cognition. In light of the persistence of organizational paranoia and the perverse
consequences it imposes, it is important to consider the question of how the problem of
organizational paranoia might be addressed. Can organizational paranoia be reduced, and
if so how?
The general problem of reducing or eliminating organizational paranoia can be
approached from a number of vantage points, including thinking about organization-level
interventions and remedies that are designed to lessen the climate of collective distrust
and suspicion among organizational members. The problem can be viewed, at least in
part, as one of uncertainty reduction. Concretely, such uncertainty-reducing measures
Organizational Paranoia
51
include providing sufficient reassurance to individuals that the doubts and concerns they
possess are, in actuality, exaggerated or ungrounded.
One way such reassurance can be provided is through means of structural
solutions that promote more information flows and/or contact between individuals or
groups that distrust each other. If paranoia within organizations is partly about
individuals’ uncertainty regarding the trustworthiness of other organizational members,
then both explicit and tacit understandings regarding transaction norms, obligations, and
exchange practices provide an important basis for addressing such concerns. Particularly
useful is information indicating that others in the organization are likely to behave in a
trustworthy fashion, even in the absence of individuating knowledge about their
trustworthiness. Such generalized knowledge can be viewed as a source of
depersonalized trust described earlier (Brewer, 1981).
Organizational rules, both formal and informal, capture much of the
depersonalized knowledge and generalized expectations that organizational members
possess about each other and the organization as a whole (March, 1995). Rule-based trust
is thus predicated on members' shared understandings regarding the system of rules
regarding appropriate (allowed) and inappropriate (disallowed) behavior. To be most
effective, adherence should be perceived as voluntary and readily forthcoming because of
internalized values, commitments, and a sense of obligation (Fine & Holyfield, 1996). As
March and Olsen (1989) put it, rule-based trust is sustained within an organization “not
[by] an explicit contract . . . [but] by socialization into the structure of rules" (p. 27).
When reciprocal confidence in members' socialization into and continued adherence to a
normative system is high, mutual trust can acquire a taken-for-granted quality. Trust
becomes tacit.
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52
Fine and Holyfield (1996) provide a nice illustration of how such explicit rules
and tacit understandings function to create and sustain high levels of mutual trust within
an organization. Their study examined the bases of trust in the Minnesota Mycological
Society, an organization that consists of amateur mushroom afficionados. This
organization provides a rich setting in which to study the bases of presumptive trust for
several reasons. First, the costs of misplaced trust in the organization can be quite severe:
eating a mushroom that someone else has mistakenly declared safe for consumption can
lead to serious illness and even, in rare instances, death. Given such risks, Fine and
Holyfield note, credibility is lost only once unless a mistake is reasonable. Consequently,
members are likely to be fairly vigilant about assessing and maintaining high levels of
mutual trust and trustworthiness. Second, because membership in the organization is
voluntary, exit is comparatively costless. If doubts about others’ trustworthiness become
too great, therefore, members will take their trust elsewhere and the organization will die.
Thus, the organization’s survival depends upon its ability to successfully instill and
sustain perceptions of mutual trustworthiness among its members.
Fine and Holyfield identified three important bases of trust within this
organization, which they termed awarding trust, managing risk, and transforming trust.
One way trust is created, they observed, is to award trust to others even when confidence
in them may be lacking. For example, considerable social pressure is exerted on novices
to consume dishes at banquets prepared by other members. As Fine and Holyfield put it,
there is an insistence on trust. Thus, even if members remain privately anxious, their
public behavior connotes high levels of trust. Collectively, these displays constitute a
potent form of social proof to members that their individual acts of trust are sensible.
Organizational Paranoia
53
An insistence on trust is adaptive, of course, only if collective trustworthiness is
actually in place within the organization. The difference between blind, foolish trust and
mindful and constructive commitment to an organizational order is obvious.
Accordingly, a second crucial element in the creation of trust within this organization
occurs through practices and arrangements that ensure individual competence and due
diligence with respect to all of the routines and activities that the collective life of the
group depends on. This result is achieved partially through meticulous socialization of
newcomers to the organization. Novices participate in these socialization processes with
appropriate levels of commitment because it helps them manage the personal risks of
mushroom eating and also because it helps them secure a place in the social order of the
group. In turn, more seasoned organizational members teach novices out of a sense of
obligation, having themselves benefitted from instruction from those who came before
them. This repaying of their own instruction constitutes an interesting temporal
(transgenerational) variant of depersonalized trust. This requirement that oldtimers
socialize newcomers has a second and less obvious benefit: it continually forces them to
articulate the rules, reminding them as well which attitudes and behaviors are critical to
the maintenance of collective trust. Thus, this form of trust is not simply trust in the
expertise and motivation of specific individuals, but more importantly, trust in a social
system characterized by collective expertise and high motivation.
Over time, Fine and Holyfield argue, as members acquire knowledge about the
organization, the nature of trust itself becomes transformed. Early on, the organization is
simply a “validator” of trust for new members. Eventually, however, it becomes an
“arena in which trusting relations are enacted and organizational interaction serves as its
own reward” (p. 29).
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54
Sometimes organizations and their members are even willing to accept suboptimal rules as solutions to their trust dilemmas, rather than live with the fear or even
mere suspicion they are being exploited or taken advantage of by others in organization.
Gambetta (1993) provided a very nice illustration of such a structural solution that
emerged among Palermo taxi drivers, where a climate of collective paranoia had resulted
in the collapse of cooperation among them. A radio-dispatcher service was initially
instituted in Palermo to help drivers locate prospective fares. Each driver contributes to
provide the central dispatcher, so the dispatcher is, in this sense, a public good. The
dispatcher, on receiving a call, was supposed to give the call to the driver who happened
to be nearest the caller. Unfortunately, knowing this decision rule, drivers had incentives
to misrepresent (overstate) their proximity to the caller, because there was no obvious
way for the radio dispatcher to verify whether cabbies were telling the truth or not
regarding their location. As suspicions spread that others were cheating the system by
strategically misrepresenting their location, individual drivers began opting out of the
system, feeling why pay for a public good that’s gone bad. Individual drivers maintained
that “a lot of cheating” was going on, even though objective evidence of such cheating
was hard to come by (p. 221). As Gambetta noted, “If a driver were lucky enough to land
a few extra runs in a day, the other drivers would almost automatically leap to the
conclusion that he was cheating” (p. 224). Moreover, once this judgment had
crystallized, there was little that could be done to undo it. Drivers had ample time to
privately ruminate in their cabs about such “cheating.” Additionally, they could reinforce
such conclusions through collective or social rumination, by 'comparing notes' when they
took their breaks together. “In Sicily,” Gambetta wryly observed, “there is nothing as
Organizational Paranoia
55
suspicious as luck” (p. 224). By 1987, despite a population of over a million inhabitants,
this system of radio-dispatched taxi-service in Palermo had almost collapsed entirely.
The solution to this trust dilemma—and one that emerged only after ten years of
chronic and bitter failure, was to create a new allocation system where all cabs would go
to a central area, que up, and take incoming calls in order. The system readily allowed
visible verification of location. Thus, all drivers could remain assured that the system
was working fairly. Ironically, this solution did mean that passengers had to wait longer
and pay more on average for taxi service because the meter starts running once a call is
taken by the radio dispatcher and, additionally, passengers have to wait for the cab to
traverse from the central location to their destination, even if other cabbies happen to be
much closer to their calling point. As Gambetta wrly observed, however, even clearly
inferior service dominates no service at all for people whose mobility is dependent on cab
transportation.
In the case of interventions intended to create positive collective identities and
expectations of mutual trustworthiness, these prompts make salient and reinforce the
perception that organizational members, as a group, are on the whole trustworthy. Miller
(1992) provides an excellent example of this kind of socially constructed and ultimately
self-reinforcing dynamic. In discussing the underpinnings of cooperation at HewlettPackard, he noted that, "The reality of cooperation is suggested by the open lab stock
policy, which not only allows engineers access to all equipment, but encourages them to
take it home for personal use" (p. 197). From a strictly economic perspective, this policy
simply reduces monitoring and transaction costs. However, from the standpoint of a rulebased set of expectations about trust-related interactions, its consequences are more subtle
and far-reaching. As Miller (1992) observed, "the open door symbolizes and
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56
demonstrates management's trust in the cooperativeness of the employees” (p. 197).
Because such acts are so manifestly predicated on trust in others, they tend to breed trust
in turn.
Another way in which rules foster trust is through their influence on individuals’
self-perceptions and their expectations about other organizational members. As March
(1995) observed in this regard, organizations function much like "stage managers" by
providing "prompts that evoke particular identities in particular situations” (p. 72). Rulebased practices of this sort can exert subtle influences, not only on individuals’
expectations and beliefs about the trustworthiness and honesty of other organizational
members, but also their self-perceptions of their own honesty and trustworthiness as well.
As Miller notes in this regard, by eliminating time clocks and locks on equipment room
doors at Hewlett-Packard, the organization built a “shared expectation among all the
players that cooperation will most likely be reciprocated" creating "a shared 'common
knowledge' in the ability of the players to reach cooperative outcomes" (p. 197). By
institutionalizing trust through practices at the macro-organizational level, trust becomes
internalized at the micro level. Thus, rule-based trust becomes a potent form of
expectational asset (Knez & Camerer, 1994) that facilitates spontaneous coordination and
cooperation among organizational members.
Putting Paranoia in Perspective: Toward a Positive Theory of Doubt
Up to this point, the analysis has emphasized almost exclusively the dysfunctional
or deleterious consequences of organizational paranoia. The paranoid perceiver has been
portrayed largely as a social misperceiver who exaggerates others' malevolence and
indifference, and who tends to overestimate their lack of trustworthiness. In certain
respects, this emphasis is appropriate. After all, to the extent that paranoid cognitions
Organizational Paranoia
57
represent systematic patterns of misperception in organizations, they obviously constitute
a maladaptive mode of social information processing and should be analyzed much like
other forms of social misperception found in social psychology (Kunda, 1999).
However, I would argue that the prevalence and ubitiquousness of such paranoia
invites contemplation of the possible functional or adaptive roles such cognitions might
play in organizational life. There are several observations that prompt consideration of
such roles. First, distrust and suspicion are not always irrational. In highly competitive or
political organizational environments, for example, an individual may have quite
legitimate cause for suspicion and concern about others’ trustworthiness. In such
environments, the costs of misplaced trust can be quite costly—and sometimes even fatal-to one’s career. Thus, in ecologies populated by individuals who lack trustworthiness, a
propensity towards vigilance with respect to others’ lack of trustworthiness may be quite
prudent and adaptive (Bendor, Kramer, & Stout, 1991). Even though the fears and
suspicions of paranoid individuals may seem exaggerated or inappropriate to others who
are in more advantage positions, this does not mean that their distrust is entirely
misplaced or unwarranted. As Intel President and CEO Andrew Grove (1996) likes to
reminds his employees, “Only the paranoid survive” (p. 3). In expounding on what he
means by such adaptive paranoia, Grove notes,
“I believe in the value of paranoia. Business success contains the seeds of its own
destruction. The more successful you are, the more people want a chunk of your
business and then another chunk and then another until there is nothing left. I
believe that the prime responsibility of a manager is to guard against other
people’s attacks and to inculcate this guardian attitude in the people under his or
her management” (p. 3)
Organizational Paranoia
58
A better appreciation of the adaptive functions of even seemingly irrational forms
of distrust and suspicion might help us, moreover, “back into” a richer and more robust
theory of organizational trust. By understanding more completely the conditions that give
rise to such irrational forms of distrust and suspicion, and that render trust more fragile,
we may develop a better understanding of the requirements for building more resilient
systems of collective or reciprocal trust. Along these lines, the theory of organizational
paranoia developed in this chapter helps direct attention to the rather mundane or banal
“social information processing” origins of wariness of others and the reluctance to give
them the benefit of the doubt.
In commenting on the fragile and elusive character of trust in organizations,
March and Olsen (19xx) onced observed, “The greatest threat to innocence is the
awareness that not everyone else is innocent” (p. xx). As the results of the research
reviewed in this paper suggest, even the mere suspicion that others’ lack innocence may
be sufficient to tilt individuals preciptiously toward presumptive suspicion and wariness.
Organizational Paranoia
59
Footnotes
1. This comparative lack of attention to distrust as a distinct topic may reflect, at least in
part, the assumption that trust and distrust are merely opposite poles of a single
continuum and are symmetric (see, e.g., Gambetta, 1988 and Stzompka, 1999). This
assumption has been questioned on a variety of theoretical and empirical grounds (see,
e.g., Slovic, 1993).
2. More extensive treatments of these different forms of organizational paranoia can be
found elsewhere. Interpersonal paranoia is discussed in Butler, Koopman, & Zimbardo,
1995. Discussions of intergroup paranoia can be found in Kramer & Messick, 1997 and
Pruitt, 1987. Analyses of leader paranoia can be found in Kramer (2000) and Robins and
Post (1997).
3. The emphasis placed upon intrapsychic dynamics in these early theories is not
altogether surprising, given that these theories were based largely upon clinical
observations made in institutional settings in which the ‘disturbed’ individual had been
removed from the social contexts for which it may have represented some sort of
psychological adaptation.
4. This is not to argue that clinical forms of paranoia are not indicative of any acute intrapsychic disturbance. Rather, it is to argue that extant clinical theories may
underappreciate the extent to which ordinary or mundane social and situational factors
contribute to the emergence and maintenance of such paranoia.
5. As recent studies have shown, autobiographical narratives of this sort are rich sources
of naturalistic data and can provide important insights regarding how individuals construe
different facets of their past experiences, as well as the significant lessons they extract
from those experiences (see, e.g., Baumeister & Newman, 1994 and Baumeister,
Stillwell, & Wotman, 1990).
6. Space does not permit a detailed explication of the behavioral manifestations and
consequences of paranoid cognition. However, a general taxonomy of forms of selfdefeating behavior can be found in Baumeister and Scher (1988), and their linkages to
paranoid behavior found in Kramer (1995).
7. Experimental evidence for many of the specific theorized linkages in the model can be
found elsewhere, including Buss and Scheier (1976). A review of this social cognitive
evidence can be found in Kramer (1998).
8. This view is consonant with recent perspectives on the constructive consequences of
mindful deliberation and mental self-control (Langer, 19; Taylor, Pham, Rivkin, &
Armor, 1998; Wilson & Kraft, 1993; Wyer, 1996). In such environments, it may be far
better to be safe than sorry.
Organizational Paranoia
60
9. Unfortunately, freeway driving also provides all too much time for the sort of
hypervigilant scrutiny of other people, and dysphoric rumination about their lack of
competence. For a variety of well-understood reasons, such individuals are likely to
remain relatively oblivious to the possibility that their own reckless lane changes and
frantic actions elicit more careful, defensive behavior from other drivers around them.
Both the too fast driver and the too slow driver. The common positive illusion that one is
a better than average driver insulates one further from any suspicion that it is one’s own
location in a system of moving objects that generates the experience.
Organizational Paranoia
61
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Social Uncertainty
Induced Psychological States
Heightened Self-Consciousness
Heightened Perceptions of Evaluative Scrutiny
Uncertainty about Status
Reduced Perceptions of Psychological Safety
Cognitive Appraisal and Coping Responses
Hypervigilance
Dysphoric Rumination
Trust-related Mental Accounting
Cognitive Elaboration
Overly Personalistic Construal of Social Interactions
Sinister Attribution Bias
Heightened Concerns about Others’ Trustworthiness
Defensive Behaviors
Behavioral Inhibition
Social Withdrawal
Social Consequences
Paranoid Attribution Bias
Avoidant Responses
Figure 1. A Social Auditing Model of Organizational Paranoia