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Lecture 6

SOC 2700 Lecture 6: Week 6

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University of Guelph
SOC 2700
Reza Barmaki

Punch, Maurice. 2000. Suite violence: Why managers murder and corporations kill. Crime, Law and Social Change 33: 243-280.  Business crime and corporate deviance have been neglected by social scientists  In criminology this is suprising because managers and corporations commit far more violence than any serial killer or criminal organization. The offenders are usually well educated, and socially acceptable citizens who distance themselves from the notion of criminal behavior and criminal identity  In entering the corporate world, the first assumption is that the extent of corporate violence is well established and widely documented.  Union Carbide Factory in Bhopal, India- collisions leading to the severely injured passengers. In the Pinto case Ford was taken to court for “reckless homicide” – it was the first time that a major American corporation would go to trial for murder.  Organizations cannot take decisions apart from the members who comprise them but organizations can be held criminally responsible as an institutional entity and not just for vicarious liability in relation to employees  It is in the nature of much business crime and deviance that the organization provides the means, the opportunity and the motivation for rule breaking; that the organization may well be the scene of the crime and that the organization can be both perpetrator and victim at the same time  Traditionally, an organization was perceived as relatively stable with .an orientation to specific goals, and with a fairly fixed division of labor. Now, in contrast, they see organizations as fluid and flexible, with shifting goals, negotiated structures and a dynamic division of labout.  There is often a discrepancy between the surface solidity of the business organization and the fluctuating and even turbulent reality of managerial backstage behavior.  Behind the coherent and rational front of a formal corporation, there is a world of power strugglers, rivalry, factionalism, favoritism, politics, manipulation and short term problem solving.  Managers tend to emerge from accounts of organizational practice as chameleons, buffeted by moral ambiguity and institutional uncertainty. In this view, the organization is an intricate, ambiguous, contingent, and even contradictory arena where deviance may become an acceptable answer to perceived institutional or elite group dilemma  It is thought that poor performance and or inadequate profits will generate the motivation to indulge in illegal behavior  Jamieson concldes that the anecdotal and intuitive material linking illegal behavior to profits has resulted in weak correlations or none. We can speculate that insider trading and defence procurement fraud were decives to ensure outcomes in an environment of risk and speculation  A high level of concentration in an industry can foster a more successful conspiracy whereby companies can more readily evade detection and prosecution than a larger collection of firms where the deviance is more easily detectable  It is the more profitable companies that are prosecuted for market and price manipulation  The evidence indicates that a direct causal relationship between market conditions and corporate decision making is difficult to establish and tends to generate more confusion than coherence- a wide range of factos and not solely profit pushes companies towards deviance  We cannot know how many companies offend; however, there are assumptions in literature that managers in business seek predictability, enhanced profits, continuity and that they are influenced by shifts in market conditions to justify their deviant behavior.  There are some companies with exemplary and unblemished records; there are industries with persistent records of infringememnts, but that does not necessarily mean that all firms indulge in deviancy; and there are firms that flit in and out of deviancy in response to perceived market conditions, as in price fixing  Sometimes in the case of business deviancy the management board actuin on behalf of the company is involve  There can be considerable variety in time and place of the behavior  Now with increasing globalization and the export of hazards, there is a considerable distance between the primary causers of industrial harm who remain “distant, alien and inaccessible” to those directly at risk  Criminal law demands a direct link between the policies and actions of management and the specific act of negligence and the judge in the case had difficulty discerning that connection.  It is often hard to judge the motivation abd behavior of managers.  Corporate crime and deviance can be divided into three categories related to the intentional elements of management decision making. o First some behavior is fully conscious, involves conscious, involves a conspiract and a well controlled group of deviants, takes place over time, and requires elaborate deception and organizational camouflage. It is diffult to imagine that a compant would directly lead to the avoidable death and suffering of multiple victims- it is more in risk analysis that calculates the negative side effects of an activity and that makes a judgement based on saftery demands, claims for damage and injury and costs of production o This leads to the second category, where some form of incompetence, negligence or faulty decision-making plays a significsnt role. There may well be a level of corporate or individual culpability- under criminal, civil, or administrative law- but the assujmption is that the deleterious consequences were a result of a largely unconscious failure to pick up warming signals or to take positive steps to rectify a situation o Third, is the category where managerial pressure forces employees to take short cuts on satety procedures in the interests of production. This clearly reaises the contentious area of good managers operaring in a way they feel to be legitimate and acceptable yet the rmain unaware of an unconscious process of risk acceptance  These 3 categories indicate that it is difficult to pin down causation and motivation in managerial decision making  Many incidents of corporate deviance are complex and intricare ecents that are difficult to unravel in terms of direct responsibility and blame. Individual cases need to be placed in a situational context that doe sjustice to the rnage of interrelated variables involved.  It is necessary to try to relate corporate deviance to general processes such as organizational change  One general element is the mind of the manager. Differential association mainatains that people choose deviance because of associational patterns and learning processes.  Some of the basic features of organizational business life- centred on the concepts os structure and culture- shape an identity and create an environment where deviance is accepted as an option and particularly where deviance leads to severe unanticipated consequences. The managerial mind and corporate culture  Corposations and their executives cause death and suffering  It has been difficult to trace explicit and deliberate inent from the noard room to the later violent consequences.  It is often questioned what social, cultural and organizational mechanisms lead them to take risks, to take short cuts to blind themselves to the consequences, and even consciouslt ro break the law Size\complexity  Size, complexity and segmentation in large corporations can contribute to lack of control, to deviant subcultures, to poor communication and to the obfuscation of authority.  Outsiders may assume that everyone must jbiw wars going on but Kanter maintains that peoples view within organizations may be limited because the get a sense of the whole  There are a number of social mechanisms at play that may prevent bad news from reaching the top o There is a natural tendency for bas news of any sort not top rise to the top in an organization o Certain wrongdoing of a more serious sort- such as price fixing- is not just screened out casually, it becomes the job of someone, perhaps the general counsel to intercept any such information that could taint his president ot board chairman, divulging his suspicions only in private, if at all o It is systematically operated to keep information of wrong doing away from the very people who might best be doing something about it  It is possible that size, specialization, delegation, fragmentation if information and degmentation of responsibility can combine to produce a climate that “allows the abdication of a degree of personal responsibility for almost every type of decision, from the most inconsequential to one that may have a great impact on the lives of thousands  Morality in organizations is the morality of segmented acts that foster indifference and even evasion of responsibility. Goals  The emphasis on goals, and the necessity to achieve organizational goals, may enhance practices where the ends are held to justify the means.  It can be argued that all organizations- capitalist or socialist, governmental or private- experience pressure to resott to illegal means of global attainment when legitimate means are blocked  The profit motive is crucial in business but business organizations also strive for other ends- to control markets, to damage competitors, to enhance their powers  The emphasis on goal attainment- particularly when achievement of goals is elevated to a mission, or an end in itself, or are blocked in some way- can crucially influence the inclination to seek illict means to achieve legitimate ends The company as a total institution  Modern corporations take on some of the structural characteristics and psychological impact of total institutions.  The all encompassing nature of modern management- the dedication to working long hours, the emphasis on appropriate out of work socializing, the travel and constant changes of residence and the dependence on work for friendship may lead to a deep reliance and involvement in an institution that pervades your entire life.  The adoption of Japanese working methods in western companies, and the recent interest in corporate culture as a means of generating loyality, may enhance the frip of the organization on the individual and may make it a question of institutional loyalty when employees are asked to engage in deviant practices Culture  The record of repeat preangression in corporate crime is probably related the the fact that these industries had at the time a tough, anti-regulatory ideology and culture allied to a feeling that they were overregulated with petty rules drawn up by people who did not understand their industries.  It is possible that seeking deviant solutions becomes imbedded in the corporate culture  A desire for profits, expansion, power, desire for security, the fear of failure, group loyalty aids to crime  Some elements of the corporate culture may be conducive to deviant colutions to company problems; violations are more likely to occur in some industries, those closely associated with an industry culture favourable to unethical and illegal behaviout Personality and Identity  There are social psychological factors that help to define the persobality and identity of managers that contribute them in denaging in deviant practices o Depersonalization: corporate affairs may be conducted in a way that managers feel far removed from the consequences of their decisions. This may be reinforced by the use of their language, and by hostile or dismissive negative stereotypes of competitors, customers, regulatory officials, and government representatives. o Individuals are placed in a conflict situation when their own values are compromised by organizational dictates and that a number of social psychological mechanisms have to be employed in order to wean managers from their individual moralities in order to be able to subordinate these to organizational ideologies and practices. o There are negative stereotypes of outsiders; o Impersonality enables one to distance themselves emotionally from failures who are cut adrift o The psychological and social processes that managers go through in the business organization can lead to repressing feelings, bi-polar thinking, depersonalization, rejection of outsiders, psychological distancing from the consequences of decisions, co
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