Corporate Crime: Theories, Prevention, and Impact on Business

This essay provides a comprehensive overview of corporate crime, defining it as criminal activity committed by a corporation or on its behalf. It explores overlapping concepts such as white-collar crime, organized crime, and state-corporate crime, highlighting their distinctions and interrelations. The essay delves into various theories explaining corporate criminality, including learning theory, the theory of anomy, control theories, and economic theory, providing insights into the motivations and behaviors behind such crimes. It also examines the detrimental effects of corporate crime on a firm's brand image, customer loyalty, and subsidiary companies. Finally, the essay discusses common ways to prevent corporate crime, emphasizing the importance of ethical governance and compliance.

Running head: Corporate crime
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Running head: Corporate crime
CORPORATE CRIME
August, 5th 2019
INTRODUCTION TO CORPORATE CRIME
In the context of criminology, corporate crime is the type of crime which is either
committed by a corporation or by the individual who is acting on behalf of the company. In
simple words, it can be said that the crime which is committed for the purpose to provide benefit
to the company is being called by the name of corporate crime. Herein it can be said that it is
very much important for the organization that it should always follow the rules and regulations
of good corporate governance. Thus, if any company deviate it from the principle of good
corporate governance then in this situation there are greater chances that the respective firm has
indulged itself into criminal activities.
In the worst corporate crime-related case, the company will tend to face judicial
dissolution. It is also called by the name of death of the corporate or the business entity. For the
firm, it is very much essential that it should not indulge itself in any type of corporate crime.
This is because; such type of activity from the side of enterprise will tend to have a negative
impact on the respective customers of the enterprise. Further, the given type of thing will stop the
firm’s customers with respect to use the goods and services of the corporation in an effectual
manner. In this study, a detailed description will be given about the concepts that are just similar
to corporate crime. Further, the discussion will also be carried out in relation to the ways with
the help of which corporate crime can be mitigated from the firm.
CORPORATE CRIME OVERLAPPING
The term such as corporate crime is always overlapping with the three other types of
terminology. Hence, it is very much essential for the individual that it should get the idea about
concepts that are related to corporate crime. It is by complying with a given type of activity
only better understanding about the terms can be made in an effectual way. The detail
explanations about all of them are given below:
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Running head: Corporate crime
White-collar crime
The given type of crime is basically being done by the white-collar employees of the
firm. Hence, in other words, it can be said that white-collar crime is the type of crime which is
basically being done by the upper-income class section of the society. Since the white-collar
employees are linked with the elite and the professional class, so it is being called by the name of
white-collar crime. This is similar to corporate crime. But the only difference that tends to exist
between corporate crime and white-collar crime is that corporate crime tends to provide
benefit to all the members of the company that includes investors and suppliers etc. However,
white-collar crime will tend to provide benefit to the individual person only.
In addition to this, it can also be depicted that white-collar crime aims to provide
financial benefit to the business personnel. On the other hand, Edwin Sutherland is the person
who had given the definition of the white-collar crime in 1939. The white-collar crime is related
to cases like wage theft, insider trading, bribery, cybercrime, money laundering, and forgery, etc.
Overall, it can be said that it is also being regarded as one of the most important categories that
are associated with the concept of corporate crime in an effectual way.
Organized crime
The term corporate crime is also overlapped with the concept such as organized crime.
In accordance with the given context, it can be said that the organized crime basically possess
different types of illegal street activities such as cross border operation like drug trafficking,
kidnapping, performing manipulation in the accounts, tax evasion and misappropriation of the
funds, etc. However, the only similarity that exists between corporate crime and organized
crime is that it tends to involve some degree of social and political influence with an aim to
perform the operation in a successful manner.
In other words, it can also be depicted that organized crime is being regarded as one of
the categories of transnational and the local grouping of the highly centralized organization such
as terrorist group, etc. In this regard, there are different criminal firms that tend to force the
enterprise with respect to performing some kind of operation with them. The criminal
organization is typically called by the name of mafia or syndicate etc. In the country such as the
United States, a special act is formed with an aim to control the activities that are related to the
organized crime. The act is called by the name of organized crime control act 1970.
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State corporate crime
It is also being regarded as another concept which is also related to the term such as
corporate crime. Herein, it can be depicted that state-corporate crime is the form of crime which
emerges when there is a significant relationship is being assessed between Commercial
Corporation and state policies. The respective term was examined by Kramer and Michalowski
in the year 1990. However, it is further redefined by the local criminal jurisdiction. The state
government tends to provide the infrastructure of commerce as well as law. In addition to this,
here all the states of the nation rely on the business. The businessmen will need to perform the
business operation as per the policies which are being framed by the state government in an
effectual way.
In addition to this, it can also be said that a business is not able to earn a profit if it will
not comply with the state policies. Since here all works are done as per the policy of state so
criminal activities cannot be performed alone. In this context, it can be said that state-corporate
crime is the type of crime which is done by both corporate and state government together. This
will have a significant impact on the people of society in an effectual way.
THEORIES IN RELATION TO CORPORATE CRIMINALITY
We have discussed meaning about the corporate crime, hence now it’s time to gather
some idea about the theories that are related to the corporate criminality. This is because; with
the help of theories an individual can get detail idea that why an individual will commit a crime.
The detail description of the same is depicted below:
Learning theory
The very first theory that is being taken into consideration with an aim to assess the
reason behind corporate crime is learning theory. In accordance with the given context, it can
be said that criminal behavior is also the result of the learning process. The behavior like a
criminal emerges when an individual will form a relationship with that person who believes that
crime is good. Thus, the level of intensity that both individuals will share tends to have an impact
on the criminal behavior of a person. For example, a person who is very young is living with the
individual who has been committing crime from last many years and does not consider anything
bad in the same.
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In addition to this, such type of individual will affect the mindset of the person and
influence them with regard to follow the path which is being followed by them. Hence, here a
person is learning from the behavior of others. Thus, it is very correct to say that an individual
should always form a connection with the person who is good in all aspect. This is because; the
wrong relationship will tend to put the individual in such type of activities that are considered as
illegal and ineffective in the eyes of law.
Theory of Anomy
It is being considered as another theory of corporate crime. The term anomy is given by
French Sociologist named as Emile Durkhemin. Thus, anomy is being considered as the state of
lawlessness because of different moral and social changes that are happening in the country. The
given theory reveals that an individual will choose to follow the criminal path when there is a
difference is being examined between commonly stated rules of society and the legal means.
Thus, with an aim to attain the given type of goal an individual will choose the illegal path. In
this regard, the theory also states that the firm that is going through with the economic problem
will tend to commit different types of crime. In addition to this, the people will also follow the
criminal path when they compare themselves with that of others. For example, if in comparison
if one company will find that its competitors are working well in the market, thus with an aim to
defeat the same, a firm will follow the wrong track and thus indulge itself into some illegal
activities. Thus, it is very right to say that sometimes tough competition between firms will also
indulge them in the wrong direction. This will have a direct impact on the brand image of the
company.
Control theories
This theory aims to remove the situation of corporate crime. The given approach
basically puts emphasis on the task of assessing different restricting factors that make people
control themselves from committing the crime in an effectual manner. In this regard, it can be
said that if an individual will have the opportunity to commit a crime for personal gains then
he/she will not lose the given type of opportunity. However, control theory entails that a person
should have control over itself. This is due to the fact that lack of control over oneself will affect
individual and as a result of this a person will choose the wrong direction with an aim to attain
any of its company goals and objectives. For example, taking bribery is being considered as
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Running head: Corporate crime
illegal in the eyes of law. But, if a person has established some strict moral for itself then in this
situation it can save himself from the task of taking bribery from some other individual. Thus,
self-control can be considered as one such important key that will restrict an individual from the
process of committing a crime in an effectual manner.
Economic theory
The cost and benefit theory is being considered as most plausible in the context of
economic crime in comparison to violent crime. The loss may be related to damaging the
reputation of the company, risk of the civil aviation and risk of punishment, etc. In this regard, it
can be depicted that the calculation in relation to the possible cost and gain will have a
significant impact on the behavior of people. For example, if an individual will see that the
decision that it will take will have more benefit and cost that is associated with the same is less
than in this situation a person will adopt the specific type of decision. Thus, in the process of
adopting the same an individual will not think that whether the decision which it is taking is
correct in the eyes of law or not. Therefore, it can be depicted that the behavior of criminal is
also influenced by the cost and benefit theory that is being associated with the particular type of
decision in an effectual way.
EFFECT OF CORPORATE CRIME
The corporate crime will have direct impact on the brand image of firm in market. In
this regard, such type of acts from the side of corporation will have direct impact on the loyal
customers of firm. Herein, they will stop using the services of the organization. In addition to
this, such type of activity will also affect the subsidiary companies of the firm. The given type of
condition will hamper the sales and profit of the subsidiary companies as well as. This is
because, such type of situation raises doubts amoung individual.
COMMON WAYS TO PREVENT THE CORPORATE CRIME
Till now we have discussed many things about the term corporate crime as well as about
the theories that are being related to the same. Thus, now we will get the idea about some
common measures that could be taken with an aim to put the complete stoppage over the given
type of activity in an effectual way. The details about the same are given below:
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 To perform the implication of the verification system: For the company, it is very much
important that it should not assign all the important tasks to one single person. This is
because; if all tasks will be given to one individual then a company will become
dependent on the same. Further, the respective individual will also gain knowledge about
all the confidential information about the company. Thus, some type of verification
system should be there. This is due to the reason that it is through such type of activity
only a firm is able to track the activities of all its employees. If the firm will find any of
its employees as the suspect of committing some crime in the future then by taking timely
actions towards the same organization can avoid corporate crime.
 To track the internet activities of the firm’s employees: It is being regarded as another
major thing that can be performed by the enterprise. Herein, it is important for the
corporation that it should make an effort in terms of installing such type of software
which will track the internet activities of the company. Here, the firm should assess the
content which an individual is searching in the social networking sites. Thus, it is through
this way only corporate crime can be avoided.
 To form the committee: They will take care of the illegal activities that are being
performed by the firm. Thus, give the report of the same to the authorized person in an
effectual manner.
 Forming the strict policy: It is the responsibility of the government of the nation that it
should form some strict policy. The policy should have clear remarks in relation to the
penalty for punishment and measures to be taken for the serious crime etc. Here, it is
through this way only fear can be created among all the firms that are operating in the
country. The given thing will assist in reducing corporate crime in an effectual manner.
Hence, it is by following some of these ways only corporate crime can be avoided in the
future.
CONCLUSION
From the conducted analysis, it can be concluded that in order to put a complete stop over
the concept of corporate crime, it is the manager of an organization that needs to take proper
and effective steps in relation to the same. Here, it will have to form its work ethics in such a
manner that people of the firm whether it is at low or at the high level position will think twice
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Running head: Corporate crime
whenever they will make a decision to commit a crime. Further, it is through this way only the
work of the enterprise can be performed in an effectual manner. This will also improve the brand
image of the corporation.
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