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Chapter 10.docx

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University of Guelph
SOC 2070
Andrew Robinson

Chapter 10: Organizational Crime Bernard Madoff  Committed the largest financial fraud ever carried out by a single individual, swindling $50-65 billion dollars from his clients, his victims were charities, banks, schools/universities, corporations, a senator, movie producers, a professional baseball player, etc.  He ran a ponzi scheme (looting funds from later investors so you can pay off earlier investors)  He was given a 150 year jail sentence, he and his wife were stripped of all of their financial assets o 1) He could not have committed these crimes without occupying a position of investor o 2) he did not commit his crimes by means of violence/threat of violence but received a sentence similar to those who commit murder (something that was not done in the past to white collar crimes) Individual deviance Goffman’s famous trilogy  behaviour/conditions that indicate blemishes of individual character  Physical traits that are considered abominations of the body  Stigma of tribe, religion and nation that is relevant for everyone Organizational Deviance  Individuals who act as embodiments of a particular organization and within and organizational setting  The act could not have been performed without the actor’s location within that setting  (embezzlement by bank tellers, sexual molestation of children by priests or by professors against students and police using excessive force against citizens)  also actions whose setting is organizational and whose agency is organizational, individual initiative is of no consequence, it is the organizational setting that generated the act, the actions are collective products of many minds  most people will never have an opportunity to commit organizational crime because in order to do so you must be part of that organization  judgements of deviance vary considerably according to where someone stands (what an officer believes to be normal force of suspect and what rest of society views as normal force)  Condemnation of the behaviour depends on whether you are inside or outside of the organization  there is lots of internal secrets so most people are no turned over to the police, if it is really serious they are just fired  (priest molesters forgiven and sent to other parishes without police knowing)  the institutional climate also influences the enactment of deviant acts within a given organizational setting (a company vocalizing either their zero tolerance or deviant acts, their indifference or acceptance to deviant acts) o This climate does change overtime, such as police are required to use much less force today than was allowed in previous decades, priests cannot get away with molestation if caught  Whether things are considered harmful or unharmful inside an organization will depend on what benefits or does not benefit an organization directly, which may be different from public standards  Corporate crime by definition is, illegal behaviour that is enacted on behalf of the corporation  Embezzlement is an exception to this because an employee is stealing from a corporation White Collar Crime and Corporate Crime  All corporate crime is white collar crime, but not all white collar crime is corporate crime  White collar o Crime is an illegal action by the occupant of high occupational status in the course of their professional activity (excludes acts that are certainly unethical but not against the law, like selling legal, but dangerous products) it has to be illegal for it to be a white collar crime o Most people who commit white collar crimes are ordinary (not super rich loaded people) who got into financial difficulty and saw their way through illegal/dishonest measures o Most are individual deviants, petty thieves who act on their own outside an organizational setting that engage in acts that are not “street crimes” (not specific to any particular organization setting, anyone could do it, its just not street crime) o Embezzlement could be an examples, a crime committed against the organization on behalf of the individual(s) and the organization is the victim  Corporate crime o Is a specific subtype of white collar crime o Involves executives/executive officers engaging in illegal actions taken on behalf (for the benefit of) the corporation, in doing so they also benefit their careers o In this case the potential victim is the general public (illegal pollution), the consumer (price fixing, illegal unsafe products), the employees (unsafe working conditions), government (illegal tax avoidance), a competitor (2 firms price fixing against a third firm) o This type of crime is not only committed in the context of the corporation but on behalf of the corporation o If their actions can get them into serious legal trouble and they will be socially stigmatized by society then the corporate crime is deviant, if the answer is no to both of those questions then the corporate crime is not labeled deviant o Why do these people commit these crimes? With such great rewards and low risks of detection why wouldn’t they what economically makes sense? o When conventional avenues make the attainment of a goals difficult or impossible many of us, corporate or not, will resort to illegitimate or deviant avenues Corporate Crime: correlative Features 8 essential features of corporate crime 1. Corporate crime tends to be made up of complex sophisticated and relatively technical actions, these crimes are very ambiguous with most people, even the victims, not knowing whether or not a criminal act has actually been committed because of the complex nature of these crimes 2. Corporate crime also tends to be intermingle with legitimate behaviour (illegal advertising made in the context of a legal and legitimate advertising industry) 3. Victimization tends to be diffuse, Harm is not always conventionalized or identifiable as such because it is usually spread out over a substantial number of victims (Monopolistic practices where a population of people is charged a quarter more for milk or 1000 dollars more for a car). When the crime is harming someone it is seen more as a statistic or chance rather than direct 4. Corporate crime monetary sums tend to be quite large. (a successful corporate crime can gain more money in its one act than all the robberies committed that same year) 5. Corporate crime is rarely prosecuted and if it is and a conviction is obtained, penalties tend to be extremely light 6. Corporate crime does not fit our stereotype of real crime, it is rarely condemned to the same degree street crime is and there is very little public stigma attached to white collar crime. Even if people see and can understand that is caused harm they are still less willing to give a harsh sentence 7. The story cover of corporate crime in the media tends to not be completed compared to street crime. They are intrinsically boring. If a corporate crime is to appear on TV it needs a) massive stolen amounts of money b) a scandal connected to the theft c)the accused must be prominent 8. Corporate criminals, even after being convicted, do not think of themselves as criminals. They say though their actions were technically illegal, they did not intend to commit a crime. They believe what the did while they were doing it was not a crime  Also the intention to do harm to victims is absent. Instead corporate executives expose people to certain measure of risk  If corporate risk were to be eliminated altogether all business activity would seek to exist (like manufacturing a car that has 0% risk of death is impossible today) some risks are severely dangerous, so much so that companies can be accused of deliberate miscare of public/employees.  They typically minimalize the likelihood of accountability, such as being prosecuted or the price of a settlement  Today product liability is the largest field of civil law  The bottom line goal is a corporation is to make a profit, essentially they do not avoid certain actions for the public good they do so because it would be unprofitable.  Corporations act as a whole not individuals one at a time, and it is often the corporation that is fined not is individuals, so the corporation is the actor not the individual  Although all corporations commit crime, the number of executives that do is a much lower number  Four recent exampled of corporate crime, the number of executives that do is a much lower number  * four recent examples of corporate deviance on page 233-234 Was the 2008 Financial Crisis A forum of Deviance at all?  In 2008, the financial world suffered a catastrophic meltdown  2 sources of the crisis: o Overvaluation of property and under regulation of the finance industry  Investors began borrowing huge sums of money to leverage financial deals and packaging bundles of mortgages, some safe, some risky, into investment instruments they bough
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