We review the literature on dysfunctional behavior in organizations and illuminate
the potential contribution of human resource development (HRD) to manage such
behavior and contribute to strong governance and compliance. The impetus for
this article comes from evidence of dysfunctional behavior in banking and financial
organizations in many countries in recent times. We define dysfunctional behavior
at individual, organizational, and institutional levels of analysis and propose a model
of HRD to address dysfunctional behavior at these levels. HRD potentially plays
four key roles in the context of managing and/or preventing dysfunctional behavior:
development of employee awareness and skills; effective governance of HRD practices,
structures, and delivery mechanisms; development of an ethical governance culture
and climate and a more far-reaching role than that of organizational governance
and agency mediation that minimizes the possibility of dysfunctional organizational
behavior. We conclude with a discussion of HRD research and practice implications.