Scandals have been a part of the commercial landscape at least since the inception of the corporation. Corporations are created to generate wealth by concentrating economic power and directing it to achieve corporate purposes. Corporate scandals emerge when individuals attempt to seize this power for personal purposes and from their abuse and misuse of it. The form of scandal is shaped by the economic nature of the modern corporation.

The British economist Ronald Coase observed that modern economies are dominated by large corporations run by managers rather than by traditional systems of individuals and small organizations selling goods and services primarily to each other. These managers seek to control their firm's transaction costs (i.e., to manage the costs incurred in acquiring resources and in coordinating processes ...