In order to develop their identities, and cement the loyalties of their members, organizations tend to contrast themselves with other organizations, and with those they deal with, whether they are clients, customers, or citizens. Bailey wrote, “If contact with outsiders is experienced as painful and involves rejection, organizational solidarity is likely to be enhanced." In other words, in the local government context, seeing citizens as irritants creates solidarity.

One of the problems in talking about conflicts of interest is that we tend to assume that people with conflicts analyze their situations before acting. We think that, for example, they balance acting in their personal interest, or in the interest of a family member or business associate, against the consequences of getting caught. Or we think that the principal ethical considerations they bring to bear on their situation arise from their local code of ethics or their spiritual or philosophical beliefs.

Bailey has a word for putting the organization ahead of the individual:  holism (as opposed to individualism). What complicates this concept in government is that there are two wholes, the organization itself and the community it works for. One of the things that most determines a local government's ethical environment is which of the two wholes an official or employee is most supposed to put above his or her personal interest.

The principal problem with getting one's ethics from one's organization is that, according to Bailey, “Organizations seem to have a poorly developed sense of right and wrong. Expediency all too often comes out ahead of morality. Organizations and institutions are supposed to be the guardians of trust and fair dealing, but often there is no one to guard the guardians and — self interest being a prime mover — they look after their own good rather than the public good. ... The lack of moral sensibility lies in the leaders and owners, who put their advantage ahead of the common good ...

In The Kingdom of Individuals (Cornell University Press, 1993), F. G. Bailey's principal concern is what he calls svejks (pronounced "shvikes"), that is, individuals in organizations who put their personal, but not usually financial interests ahead of the organization, and yet act as if they are loyal to the organization, using its proclaimed values to defend their actions.