The cultural phenomenon known as “corporate crime” is extremely complex and multi-layered. Although there are various forms of corporate crimes, all are committed either corporations or individuals that work within corporations. In an attempt to comprehensively define corporate crime, one must examine the various forms it takes. In addition, it is important to consider the make up of the corporate criminal.
Forms of Corporate Crime
There are a variety of forms of corporate crime. However, corporate crime most often encompasses fraud, embezzlement, bribery, and cover-ups.
Many corporate executives will also become involved in fraud, embezzlement, and bribery. One of the most common forms of corporate criminality found amongst executives is tax evasion. Executives will frequently use “creative” methods such as the creation of tax shelters to ensure that they pay as little as possible for their assets.
However, corporations can also participate in tax evasion. Frequently, companies will “loan” assets to other organizations in order to produce false numbers for either company’s tax records.
The Corporate Criminal
Most people do not engage in corporate crime. These criminal acts involve individuals who occupy certain social roles and, as a result, these crimes only occur under certain conditions.
Conventional theories of crime often have a tautological quality in that they define criminality in terms of the same factors they posit as causes. If crime is defined as acts committed by young, poor males who score low on IQ tests, explaining those acts through theories that stress age, poverty, and cognitive capacity is not very illuminating.
The fact is that corporate criminals are typically older, more affluent, and superior in measured intelligence. This profile of corporate criminals raises important questions that cannot be answered by such circular reasoning. The elucidation of elite criminality requires a revised definition of crime and a higher level of analysis.
Therefore, many criminologists have determined that corporate criminals are not significantly different, in terms of their personalities or psychological make-ups, than other people. However, one of the striking things about corporate offenders is how similar they are to “respectable” members of society.
Causes of Corporate Crime
Many sociologists are uncomfortable with purely cultural explanations of behavior, preferring instead to look for underlying social structural causes. As a result, they study the structural relationships that exist among individuals within the context of societies, institutions, and organizations.
In attempting to identify the causes of white-collar crime, we focus on three basic levels of sociological analysis including societal, institutional, and organizational causes and how these factors generate the opportunities, motives, and means for corporate criminality.
Responses to Corporate Crime
Many commentators have suggested that white-collar crime flourishes because of a generally tepid reaction by law enforcement and other government agencies. But, why does it seem that so many corporate criminals are never brought to justice? Why do those few who are sanctioned seem to receive punishments so remarkably lenient? Why do convicted corporate criminals suffer so little of the stigma and opprobrium that the public attaches to “common” criminals?
People often fail to express the kind of outrage over corporate crime that they do over street crimes because it is usually more difficult to visualize the damage wrought by the former.
Additionally, television and the media downplay corporate crime as well. Essentially, corporate crimes lack the dramatic elements that fir the needs of the electronic media: clearly defined victims and villains, illegal actions that are easily understood and can be described in quick sound bytes, motivations like jealousy and rage that can be vividly portrayed, and heroes in the form of police or prosecutors who apprehend and then punish those responsible.
In contrast, corporate crimes are confusing. Perpetrators, because of their social status, are not as easy to cast as perpetual lawbreakers. Also, injuries caused by these crimes may take years to develop. And, finally, the resolution of the cases often occurs outside criminal courts and away from television cameras in private negotiations between offenders and anonymous government officials.
Americans tend to have strong feelings about crimes and criminals but are often ambivalent in their responses to those convicted of corporate offenses. Many corporate lawbreakers have received the support of their colleagues and other prominent members of their community. Even after convictions, they were quickly accepted back into legitimate society, suffering few of the stigmas and resentments that other types of convicted felons routinely experience.
It almost seems as if society extends an oddly begrudging respect to those who are clever and bold enough to fleece society as a whole out of millions. But, if we are ever to gain control over while collar crime, these attitudes must change.
A major reason that there has not been a considerable amount of success in deterring corporate crime is because of the lack of response from the public and the law. But, why is this the case?
One reason is that many of the companies that are involved in corporate crime provide crucial products and services that individuals do not want to give up. Furthermore, if these companies are persecuted for corporate offenses and are forced to shut down, the result is a reduction in competition amongst the remaining corporations. This generates more monopolies, creating anti-capitalism.
Criminal corporations are also protected because the public does not want innocent people to lose their jobs as a result of a corporation begin prosecuted and eventually closing down.
Prosecuting also means companies would have to use money to defend themselves against corporate crime that they would use in research and development.
Moreover, in many cases, the victim doesn’t know that he or she has been a victim. Which is another problem in pursuing corporate criminals. Even if an individual knows that he or she has been defrauded in some way, the amount that each person loses is so small that they often don’t think to pursue anything.
In addition, the laws themselves, whether they have to do with false advertising or taxation, the laws are made by people in power and people in power are supporting their own interests with these laws.
However, the effects of corporate crime are in many ways more serious than those of “common” crime. The harmful consequences fall into three categories: environmental and human costs, economic costs, and social costs.
Corporate crimes such as improper disposal of harmful chemicals can often cause detrimental and irreversible consequences on the environment. Pollution can catalyze diseases in company workers and individuals who live in the area surrounding the point of origin.
Many corporations will also cover-up improper or inadequate safety measures for their employers. A number of cases have proved that hundreds of workers have suffered diseases, serious injuries, or were even killed as a result of corporate criminality.
When corporate crimes occur, there can be tremendous consequences within the economy. Fraudulent corporations can cause individuals to lose respect for the various industries that make up the economy, creating a lack of trust between consumers and corporations.
Corporate criminality also has a huge impact on society. When well-respected organizations act fraudulently, this can cause the public to lose faith in themselves. Their rationale is that if only individuals who “cheat” the system can advance in society then they should cheat as well. This thought process ultimately creates a culture of rule breakers.
Changes in Society
Some social analysts suggest that an ethical culture could make business more successful. Businesses with a strong culture of shared values tend to be more profitable than other companies. Companies with a strong sense of values see revenue grow exponentially, allowing for more jobs to be created, and increasing stock prices.
One way to change the culture of tolerance for corporate crime is to alter the socialization of future captains of industry, for example, at the elite MBA programs where many American business leaders are trained. A number of reformers have called out for the integration of rigorous ethical analyses into the curricula of business schools. However, the reality is that by that point it may already be too late. Some MBA programs have begun to offer business ethics courses, either as electives or in some cases as requirements. But whether such reform will have any measurable future impact on corporate morality seems like a long shot at best.