Corporate crime

Definitional issues and legal person
– Corporate crime refers to crimes committed by corporations or individuals acting on behalf of a corporation.
– Worst corporate crimes may result in judicial dissolution of the corporation.
– Some negative behaviors by corporations may not be considered criminal, depending on jurisdiction.
– Corporate crime overlaps with white-collar crime, organized crime, and state-corporate crime.
– The world’s gross criminal product is estimated to be 20% of world trade.
– In the United States, corporations are legally defined as persons based on the Fourteenth Amendment.
– English law recognizes corporations as legal persons based on the decision in Salomon v A Salomon & Co Ltd.
– Australian law defines corporations as legal persons under the Corporations Act 2001 (Cth).

Criminal capacity and enforcement policy
– The concepts of crime and punishment for individuals do not easily transfer to the corporate domain.
– International treaties permit but do not require corporate criminal liability.
– Some countries and the European Union are working towards establishing corporate criminal liability.
– The United States and France currently recognize corporate criminal capacity.
– German law does not recognize corporate criminal capacity but imposes fines for administrative violations.
– Corporate crime has become politically sensitive in some countries.
– The Sarbanes-Oxley Act of 2002 was passed in the United States to reform business practices and combat fraud.
– The Law Reform Commission of New South Wales highlights the significant threat corporate crime poses to the community.
– Fatal accidents and technological hazards contribute to the discussion of corporate crime in the United Kingdom.
– CEOs and CFOs are required to personally certify financial reports under the Sarbanes-Oxley Act, with penalties for misconduct.

Discussion and impact of corruption on firms in the private sector
– Behavior can be regulated by civil or criminal law, with the legislature deciding to criminalize certain behavior.
– States depend on the business sector for a functioning economy, making the regulation of individuals and corporations complex.
– Bribery and corruption are problems globally, with public official corruption hindering development in developing countries.
– Edwin Sutherland’s definition of white-collar crime relates to notions of corporate crime.
– Privatization is changing the tradition of sovereign state control of prisons, with corporate profitability depending on inmate labor.
– Corruption affects the growth of firms, regardless of their size.
– Product innovation is negatively impacted by corruption.
– SMEs pay higher bribes as a percentage of revenue compared to large companies.
– Bribery is the main form of corruption affecting SMEs.
– Large firms can also be affected by embezzlement, corporate fraud, and insider trading.

Responsibility of the private sector in generating corruption and organi-cultural deviance
– Evidence suggests that the private sector plays a significant role in generating corruption.
– State capture can have a damaging effect on the economy.
– Poor governance is a symptom of corruption.
– Improving governance requires coordinated efforts among governments, businesses, and civil society.
– Organi-cultural deviance is a philosophical model used in academia and corporate criminology.
– It views corporate crime as a result of social, behavioral, and environmental processes.
– Corporate crime can be engaged in by individuals, groups, organizations, and groups of organizations.
– It takes into account micro and macro social, environmental, and personality factors.
– Corporate cultures may encourage or accept deviant behaviors that differ from societal norms.
– Organi-cultural deviance explains decision-related cognitive impairments in corporations engaging in corporate crime.
– Group dynamics involved in white-collar crime are similar to those present in gangs, organized crime organizations, and cults.
– Systems-level forces influence the behaviors and cognitions of individuals.
– Organi-cultural deviance was first taught in business management and leadership classes.
– It helps describe, explain, and understand the complex forces that lead organizations to engage in corporate crime.

Social dynamics of organi-cultural deviance and environmental influences
– Organi-cultural deviance describes how socialization processes within deviant corporate cultures invert the Hierarchy of Needs.
– Social dynamics within deviant organizations lure and capture individuals.
– Individuals become dependent on the organization for their basic needs.
– Manipulation and a façade of honesty are used by organizations engaging in organi-cultural deviance.
– Coercive power, threats, and violence are used to maintain compliance with organizational goals.
– Organizational-cultural deviance is present in certain types of organizations.
– These organizations leverage resources such as information, violence, reputation, and publicity to engage in organi-cultural deviance.
– Toxic leadership is often found in deviant organizations.
– Deviant organizations use their reputation and publicity to attract members.
– Organizational gravitational pull is created by adverse psychological forces and the real need for employees to survive.
– Economic cycles can result in strain, which is a precipitating factor in organi-cultural deviance.
– Social pressure and economic forces exert strain on organizations to engage in corporate crime.
– Strain creates motivating tension in organi-cultural deviance.
– Different points in an economic cycle generate specific kinds of leaders in deviant organizations.
– Entrepreneurial leaders are most visible during a depression or recession, while bureaucratic leaders emerge as the economy strengthens.
– Organi-cultural deviance includes both micro and macro influences.
– Micro influences involve personal, psychological, or internal forces that influence individual behavior.
– Macro influences include group dynamics, organizational culture, and external pressures and constraints.
– Organi-cultural deviance is a combination of adverse psychological forces and system pressures.
– It encompasses both individual and organizational factors that contribute to deviant behavior.
– Economic cycles result in observable patterns indicative of organi-cultural deviance.
– The location of an economy in the economic cycle determines the type of leaders that emerge.
– Entrepreneurial leaders motivate employees to innovate during economic downturns.
– Bureaucratic leaders standardize and operationalize successes during economic upturns.
– Pseudo-transformational leaders engage in deviant practices to maintain the illusion of rising returns during economic peaks.
– Robert Merton’s strain theory suggests that individuals strive for universal goals, including monetary success.
– Organizational-cultural deviance is Source:  https://en.wikipedia.org/wiki/Corporate_crime