Corporate Crime

Corporate crimes include secretly dumping hazardous waste, illegally agreeing to fix prices, and knowingly selling unacceptably dangerous products. These offenses, like other corporate crimes, are deviant outcomes of actions by people working in usually nonde-viant corporations.

Identifying true rates of corporate crime is problematic because victims and their victimization are difficult to establish. Toxic dumping, for instance, does not leave maimed or dead bodies at dump sites, and victims of price fixing seldom know they were illegally overcharged. Knowingly selling hazardous pharmaceuticals is particularly difficult to determine because often the harms are insidious—they kill only a tiny fraction of consumers, and harms do not appear until decades after exposure.

Motives for such crimes are equally difficult to predict or identify. Thus, some ordinary employees of one ordinary corporation, Goodrich, on multiple [Page 168]occasions knowingly produced and sold faulty aircraft brakes, although nothing in their biographies would have led observers to predict that they would do so. Likewise, some Enron and Equity Funding Corporation employees violated laws and personal morality by misleading investors into thinking that their failing corporations were profitable.

The structures, cultures, and incentives of their large organizations encouraged these people to commit such anti-social acts. People in these organizations know they are replaceable, and so they are surprisingly malleable. Most of them are average (and sometimes well-intentioned) people committing their crimes in the course of meeting their everyday occupational responsibilities. No data suggest that, as they started their careers, these people were less law-abiding than their peers. And, like other criminals, most devote only a small part of their total time and effort to criminality.

Corporate-generated beliefs, motives, and incentives can help explain their criminal behaviors (just as life experience can help explain street crimes), but these explanations do not absolve participants of their moral or legal violations. They merely explain why participants participated. Research over the past 50 years offers some convincing explanations for the corporation-generated environments that allow or encourage employee participation in corporate crime. It also offers some insights into the social responses that label and penalize some corporate actions as criminal, while ignoring others.