At the end of the day Organizations don’t do anything, people in organizations do things. As humans, we attribute the aggregate actions of the people in an organization to the organization as a whole. Institutions shape how individuals interact, but individuals also shape everything about an institution through their actions.
When the aggregate action of individuals go against an institution’s perceived mission (Institutions have implicit, explicit, and perceived missions) people start to lose trust in that institution. If it goes on long enough this eroded trust weakens the institution’s ability to shape how individuals interact, which leads to more individuals going against the institution’s perceived mission, creating a feedback loop that rips the institution apart.
An institution can prevent the self-destructive feedback loop by making an example of the individual. If you publicly expunge the individual from the institution, it shows people outside the institution that the institution can police itself. However, modern institutions don’t seem to be expunging people who fail in their institutional role Nobody is resigning for failing to do their institutional role, but are expunging people who violate extra-institutional rules. These expunging may confuse the rules of the institutional game (All institutions are coupled to at least one game) and reduce trust both inside the institution and outside. (The more trust an institution has, the less it needs formal process)
Weirdly I think this harkens to Girardian scapegoating.
The reflection of individual actions on institutions is one reason why Institutions need to differentiate between individuals inside and outside the institution. If it’s unclear who’s in the institution, it’s unclear who reflects on it.