Collective Punishment

We've all been there.  You have a class activity planned, but a few students are keeping the class off track and you can't seem to get anything accomplished.  Or maybe a couple of students misuse your class resources.  As a result, you stop everything and the entire class pays the consequences for the actions of a few students.
Why do we do this?
There are several reasons/possibilities:

1. We hope the offending party will feel guilty and self correct because the don't want the entire group to suffer the consequences.  (This rarely works, because the person is actually happy to see they have succeeded in pushing your buttons or they got what they wanted don't have to do any work.)
2. We hope the community will handle the situation.  One person acts out, the group helps to correct the behavior.  
3. We feel that our control or authority is threatened.
4. We revert back to how we may have been taught.  If it worked then, it should work now.

None of these reasons are valid reasons for our actions.  What it boils down to is we don't know what the proper response should be, and if we do we don't have the skills or confidence to follow through with the correct response.

The proper response will always be grounded in maintaining the dignity and relationship with that student.  If we don't follow those guidelines, we violate everything that should motivate us as educators.  Sarcasm, yelling, putdowns and other responses that indicate we feel threatened have no place in the classroom.  Escalating with a student should not be the norm in any classroom, instead a strong, healthy relationship that promotes safety and learning is vital.

How do you maintain control when it seems as though things are quickly getting out of hand?