Question

Identify and discuss the principal arguments on both sides of the question of whether there is such a thing as corporate or organizational criminality. Which factors seem most important in explaining the crimes of corporations or organizations? What is to be said in favor of and against the idea of a general theory of crime, especially as it applies to understanding white collar crime?

Answer 1

Corporate crime is a form of fraud that is closely related to “white-collar crime,” which takes place in business organizations and other corporate institutions such as banks, manufacturing industries, and non-governmental organizations. Unlike organized crime which may involve illegal street activities such as kidnappings and cross-border operations like drug trafficking, corporate crime involves “clean jobs” like manipulation of accounting records by finance officers, insider trading, misappropriation of funds, tax evasion, etc. However, both forms of crime require some degree of financial, social or political influence to be successfully carried out. This is because although organized crime is not exclusive to a specific race, profession or class, “many studies have shown that those with power, influence, and respectability in local, regional, national, or international society have tended to organize crime more successfully and securely than those without” (Woodwiss, 2001, p. 3). Further, as Edwin Sutherland (1939) once observed, corporate crime is a large-scale version of white collar crime, because it involves people of high-class society, committed in the course of their occupation. Thus, the two forms of crime (white-collar and corporate) overlap each other because they all happen within similar environments, in which the incentives are high for an individual or group of individuals to engage in bribery, money laundering, insider trading, forgery, and embezzlement. As in organized crime, the market is similar in both cases, since “the same market forces and factors that apply to legitimate (corporate) business markets are also mirrored in crime markets” (Dean, et al., 2010, p. 144). This paper discusses the similarities and differences between corporate and organized crime.
Perhaps the common denominator in both corporate and organized crime is the influence of money as the ultimate goal.

Organized crime, such as mafias, engages in illegal activities such as drug and human trafficking for the sole purpose of making money. Likewise, companies engage in fraud in situations when keeping to the book rules will minimize profits, or lead to losses and, eventually, bankruptcy. Without money, the incentive of taking the risk will be absent, thereby eliminating the need for undertaking a venture that, if caught, is punishable by the law.

Both corporate and organized crime operates at a global level, thereby making it difficult for governments to adequately deal with their illegal activities. Big companies operate as multinationals, which allows them to carry out their activities in several countries. Consequently, it is not easy to monitor each of every financial transaction that is conducted by a multinational company.

The close connections that exist between wealth and power on the one hand, and the law on the other, make it impossible for state authorities to rein in corporate and organized crime.
Another point of similarity between corporate and organized crime is on the source of capital for some corporate organizations. In certain circumstances, whereby perpetrators of organized crime may need to “clean” ill-gotten wealth, such as drug trafficking money, they may set up legitimate corporations for the purpose of money laundering. Therefore, corporate crime may relate with organized crime in that sometimes the former benefits financially from the latter (such as using mafia money as business capital), while corporate activities are used as a front to legitimize illegal wealth through money laundering.

Financial gain is the end result in both corporate and organized crime, they both often use different means to achieve their goals. Organized crime aims to establish a monopoly and market control of a given industry or territory. Thus, rivalry and competition may emerge between different mobs fighting for territorial or industry control. For instance, a gang may intend to control the drug market, or a given town. On its part, corporate crime almost always involve “inside job,” in which employees or investors make decisions or take actions that influence the stock value in desired ways. Additionally, the term “organized crime” does not necessarily imply the existence of rigid structures of command and responsibility as in corporate enterprises

In conclusion, both corporate and organized crime is motivated by financial gains. They are perpetrated by people with influence, either through their occupational positions or class in society. Similar motivational and environmental factors such as absence of law enforcers and rewards also play a role in influencing corporate and organized crime. Nevertheless, the two forms of crime differ in terms of the nature of activities the means employed to achieve their goals. While corporate crime takes place within a legitimate context and employs treachery, organized crime is secretive and “underground-based,” in addition to relying on violence, threats and bribery to evade the law.