Question

What is the effect of corporate crime on the US economy? What should be done about it?(2-3 paragraphs)

Answer 1

In criminology, corporate crime refers to crimes committed either by a corporation (i.e., a business entity having a separate legal personality from the natural persons that manage its activities), or by individuals acting on behalf of a corporation or other business entity (see vicarious liability and corporate liability). For the worst corporate crimes, corporations may face judicial dissolution, sometimes called the "corporate death penalty", which is a legal procedure in which a corporation is forced to dissolve or cease to exist.

Corporate crime is referred as the conduct of a corporation or employees acting on behalf of a corporation which is prescribed or punishable in law. Thus corporate crimes are committed for corporate gain or to bring harm to any other person or body corporate. Such crimes are committed in a quite environment. These are also considered to be general varieties of white collar crimes. However the criminal behavior in corporate crimes to different from the traditional crimes committed by individuals. Corporate crimes are socially injurious or blameworthy acts which cause financial, physical or environmental harm or harm caused to the workers and the general public. It is believed that corporate criminal behavior is also a result of learning process from with the working of the corporations. This behavior is also attributed to major social and moral change. In a pursuit to meet targets or goals there could be adoption of unlawful means. Further there is neutralization theory where in the given circumstances conduct is tried to be justified. Lack of adequate control could also promote criminal behavior. In addition there are factors like cost benefit considerations, socio-economic developments, organizational structure and crimologic market which are attributed to corporate criminal behavior. In the corporate control there is criminality of the corporation itself and also the liability of the responsible persons which can be vicariously fixed. Law in this repeat needs to be more clearly defined

To combat white-collar crime, the U.S. Congress passed a wave of laws and statutes in the 1970s and 80s. The Racketeer Influence and Corrupt Organizations Act (RICO) was originally associated with mafia-related organized crime, but was soon applied to white-collar crime. Under the law, racketeering included things like embezzlement from union funds, bribery and mail fraud. RICO made it easier to prosecute corrupt organizations and seize assets related to corruption. It also allowed states or people to sue perpetrators for treble or three times the dollar amount of damages. It was under this act that junk bond financier Michael Milken was found guilty of various kinds of fraud and bond market manipulation.

When Enron and similar scandals broke out in the early 2000s, Congress took action. It passed the Sarbanes-Oxley Act (SOX) in 2002 to improve corporate governance -- the relationship and accountability between corporations and their stakeholders.

Regulations to eliminate white-collar crime have evolved in countries outside the United States as well. Western European nations have also instituted laws to prevent corruption. Gradually, Eastern Europe has followed suit [source: Salinger]. Poland, for instance, passed strong anti-money-laundering legislation among other things in 2000.

Because other cultures can have dramatically different social mores, international business deals can put executives in awkward positions. In certain societies like some in Western Africa, it was customary that businessmen or even government officials work on tips -- an important and legal source of income. This is referred to as the dash system, where a dash is a tip

As international business becomes easier and more common due to the development of communication technology, these disparities in what's considered corruption are both more apparent and more important. Rampant corruption has made it difficult for Western companies to conduct business in some places. To unify the business ethics of the world, a group known as Transparency International attempts to measure the relative corruption among different countries and make it known to the public. It has called on particular countries to shape up. The group believes increased public awareness and the more that businesses establish and adhere to a code of conduct, the more pressure will be on governments and corporations to put up restrictions and institute bribery refusal policies.

The below actions can be taken to curb the corporate crimes:

Ditch Ethics Training For Teaching Federal Sentencing Guidelines

Hold Regulators Responsible

Empower Compliance Officers

Cut The On-Line Approach To Ethics Training

Prosecutors Need To Tell A More Complete Story About The Cases They Bring

Assign An Ethics Buddy At Work

Corporate Tax To Fund Investigative Journalism