Values driven change: Transforming institutional practices from the bottom up

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A small group of would-be entrepreneurs have succeeded, where many have failed, in reducing the hold of the Sicilian Mafia on a range of businesses in Italy. Antonino Vaccaro and Guido Palazzo investigate the group’s initiative Addiopizzo, and discover a powerful five step approach for implementing institutional and cultural transformation.

4 min read

PalazzoGuido Palazzo is a professor of Business Ethics. He is mainly known for his studies in globalization, but he also studies the impact of organized crime on business and society.

As well as its negative social effects, organized crime has a significant impact on business, insidiously infiltrating legitimate industries in many countries, from construction to waste management. Yet, although operating beyond the rule of law, organized crime has proved remarkably persistent, despite numerous attempts to eradicate its presence. This may be about to change, however, judging by recent research from Guido Palazzo and Antonino Vaccaro, detailing an alternative and surprisingly effective strategy for eroding the hold organized crime has on the communities and industries it operates in.

Palazzo and Vaccaro studied one of the most famous criminal organizations in the world, the Sicilian Mafia and, in particular, its system of protection payments or Pizzo, which has existed for some 150 years. In the Mafia heartlands of Sicily, 90% of small and medium sized business owners, from newspaper kiosk holders to construction company owners, paid protection money in 2004 (the start of the study period). Indeed paying protection has become an accepted practice. Openly refusing to pay Pizzo risks ostracism, intimidation, physical violence and, in some cases, murder.

Despite many ineffective attempts to combat the Sicilian Mafia’s influence, a recent anti-Mafia initiative, Addiopizzo (Goodbye Pizzo), has achieved significant success. Furthermore it has succeeded without the need for a talismanic hero, railing against the injustices of the Mafia. Instead, Addiopizzo started with a group of seven young would-be entrepreneurs, some stickers, and statement of intent: “A society that pays the Pizzo is a society without dignity.” It was a statement that soon burgeoned into a movement, a network and campaign, that reevaluated long held customs and practices, enlisting a broad coalition of stakeholders – entrepreneurs, consumers, students, teachers, and police, in its support.

Co-opt, unite and engage critical stakeholders around a change initiative

At the heart of Addiopizzo’s institutional change effort, note the authors, is the interpretation of values, and a series of actions and initiatives that can be divided into categories the authors term micro-processes. These micro-processes help to co-opt, unite and engage critical stakeholders around a change initiative. By dissecting and analyzing the processes at work in Addiopizzo, Palazzo and Vaccaro outline a powerful strategic approach to change. An approach that has relevance for reducing the impact of organized crime on business and, potentially, for transforming embedded organizational cultures that are highly resistant to change.

The Mafia’s power over business goes beyond the threat of violence. By shaping the values, beliefs and practices that prevail in communities over time, they establish new norms. The practices of organized crime become the accepted way things are done. Changing the status quo means challenging the prevailing norms and proposing alternatives, and creating the conditions for that to happen. Here, Addiopizzo succeeds where many other initiatives have failed.

A values based approach to change

Through their access to the stakeholders involved in Addiopizzo, and their analysis of the internal communications and other materials, the authors identified five values based micro-processes key to changing the well-established status quo.

Hooking stakeholders with values is about establishing the initial connection; the foundation on which a trust based dialogue can begin between activists and stakeholders. It begins by acknowledging the importance of certain values to stakeholders, security and legality in this case, for example, and starts to shift stakeholders away from a position of moral disengagement.

The activists encourage business owners to analyze the consequences of adhering to standards and values established by organized crime

The activists encourage business owners to analyze the consequences of adhering to standards and values established by organized crime, and to make comparisons with standards and values in countries or regions where the rule of law prevails. In this way anchoring establishes an alternative view (from the entrenched but tainted views currently held) of the impact of organized crime and its practices on the society the stakeholders inhabit.

Stakeholders are encouraged to rethink their interpretation of values and consider alternative meanings. Questions like, “What would those values look in an ideal world”, help with this. Seeing values tainted by their association with organized crime in a new light activates different approaches and behaviors. Stakeholders are prompted to think about how they could give life to those values in their own operations. Such as choosing not to buy goods from retailers that pay Pizzo, for example.

With values reinterpreted, and an action plan for anti-organized crime behavior emerging, this new approach must be secured. Values such as security and legality underpin the establishment of safe spaces where like-minded stakeholders can meet and discuss anti-organized crime initiatives.

Once anti-organized crime activities are underway, stakeholders are united through new networks, within and across stakeholder categories, such as consumers or business owners. These networks promote activities that minimize the risks associated with going against established organized crime, and extend beyond the influence of organized crime allowing new practices to be developed and instituted free from malign influence.

Institutional change doesn’t require a heroic leader

As the authors demonstrate, institutional change, and in this case battling organized crime’s inroads into business, doesn’t require a heroic leader. As with Addiopizzo, great things can be achieved from the bottom up, by a broad coalition of stakeholders using a values based approach to mobilize and bring about change.

And while Palazzo and Vaccaro have focused their work on institutional change in the context of organized crime and the Sicilian Mafia, it is possible that this work has broader implications. The series of micro-processes the authors detail could be used to effect societal change in other ways, for example. Or perhaps used to help with a long standing organizational dilemma; how to change deeply embedded corporate culture.

Read the original research paper: “Values Against Violence: Institutional Change In Societies Dominated By Organized Crime” by Antonino Vaccaro, IESE Business School, and Guido Palazzo, Faculty of Business and Economics of the University of Lausanne (HEC Lausanne). Forthcoming in the Academy of Management Journal.

Featured image by Salvatore Ciambra / Flickr CC