corporate crime essay

Topics: Rational choice theory, Criminal law, Enron Pages: 11 (2719 words) Published: April 16, 2014
In the study of criminology, corporate crime is defined by James William (2014), “as a criminal act committed in the course of organizational activities for the benefit of the corporations”. Corporate crime would not have been recognized without the help of Sutherland, who was the first to perform research in that field (Waring, Chayet, 2001). He changed the traditional image of criminals, where crime was directly an outcome of poverty and introduced a criminal offender in a suit and tie (Waring, Chayet, 2001). Sutherland argued that poverty could not be seen as the main cause of crime and that crime could also be found in good neighborhoods (Waring, Chayet, 2001). Despite Sutherland’s fascination in the area of corporate crime, William (2014) states that it has been the most understudied area in criminology and suggests that criminologist tend to focus more on street crime ignoring the fact corporate crime has been proven to be twice as harmful and costly than street crime. In this literature review the key focus will be on corporate crime and its causes. First, I will in detail describe the causes of corporate crime using the strain theory and rational choice theory. Secondly I will examine the regulation of police corporate crime and explain how it fails. Thirdly I will analyze the beneficial relationship between corporate crime and politics. Lastly, I will use the Enron Scandal to show the harm that corporate crime causes and also to show the limited response it received from the police. If we are able to understand the causes of corporate crime and the flaws in regulations, then we will be able to implement policies to deter corporate crime. Corporate crime and the Strain Theory

Wang and Holtfreter (2012) argue that there is a link between corporate crime and the strain theory. They argue that industry-level strains increase the motivation of corporations to commit crime (Wang and Holtfreter 2012). In addition they suggest that all corporations are pressured to pursue increasing profit and explain that the pressure is not limited to failing companies, but also those with growth. In essence, the authors state that corporations that are declining in growth by legitimate means are pressured to stabilize growth through illegitimate means (Wang and Holtfreter 2012). In comparison, Carl Keane (1993) agrees that financial strain plays a major role in corporate crime. He proposes that the survival of a corporation depends on their financial performance and pressure to maximize profits; in explanation he states that when there is a decline in financial performance it results to a great strain to submit to illegal act (Keane 1993). Keane (1993) also points out that corporate illegality that results from financial strains usually involves administrative violations such as “non compliance with order from a court, labor violations, occupational safety, health hazard, and unfair labor practices”. Moreover, Keane (1993) suggest that companies experiencing greater financial loss are more prone to committing corporate crime. In the same manner, Wang and Holtfreter (2012) indicate that in some industries, profit maximization through illegal means is presented more than in other industries because of the limited legitimate opportunities. Furthermore, the authors explain that corporations and some industries are more tolerant of illegality than others. Throughout corporations presented with illegal ways of maintaining growth, Wang and Holtfreter (2012) suggest that they must learn techniques of offending, along with values, motives and rationalization. The authors present four hypotheses, which explain the causes of corporate crime in corporation and industries with strain being the primary influence (Wang and Holtfreter 2012). In their first Hypothesis, they state, “ corporation-level strain will increase corporate crime” (Wang and Holtfreter 2012). In presenting this hypothesis, Wang and Holtfreter (2012) explain that profitable...
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