|
||
INTRODUCTORY EXAMPLES A.H. Robbins and the Dalkon Shield Allied Chemical and Kepone
DEFINITION OF CORPORATE DEVIANCE Criminal acts committed by individuals or groups of individuals during the normal course of their work as employees of organizations, which they intend to contribute to the achievement of goals or other objectives thought to be important for the organization as a whole, some subunit within the organization, or their own particular job duties. Two Types of Persons
Juristic Persons -- No corpus,
no fixed life span, must act through natural persons FREQUENCY OF CORPORATE DEVIANCE Edwin Sutherland
All firms had at least one violation 97% had two or more violations 50% - 75% were engaged in continuous
violations Clinard and Yeager
60% had at least one action against them 200 of 477 manufaturing corporations had multiple charges filed 38% of companies responsible for over half of the violations Oil refining, drug, and automobile industries over-represented Of corporations that had at least one violation, the average number was 4.2 TYPES OF CORPORATE DEVIANCE Antitrust Violations Gain -- Reduction of competition, increased market share, increased economic powerFalse Advertising Gain – Increases market by creating artificial demandProduction and Sale of Hazardous Goods Gain – Reduced cost of production (engineering, testing, development)Occupational, Health, and Safety Violations Gain – Reduced cost of production (safety equipment, medical tests)Labor Law Violations Gain – Reduced labor costs through diminished collective bargaining powerPollution, Public Health and Safety Violations Gain – Reduced production costs (disposal, protections)Illegal Political Campaign Contributions Gain – Increased political influence in making and enforcement of lawsSecurities Fraud – Creation of financial capital by sale of fraudulent or falsely inflated stock Gain – Increased profitability THEORY OF CORPORATE DEVIANCE MOTIVATION Origin Production for market
Normative restraints
Common interest in mutual rules to prevent complexity and chaosOPPORTUNITY Attractiveness Amount of gain
Law Enforcement
Level and concentration of corporate power
Distribution of Anti-trust Activities Industries Attractive opportunities in high concentration industries
Organizational Sets Attractive opportunities when a small number of organizations are a the top of the stratification structure Organizations Greater pressure in low profit organizations
Occupations Attractive when valuable services can be exchanged – politicians, inspectors, purchasing agents MONOPOLIES Definition of Monopolistic Activity Dominance of a market so as to suppress competitionTypes of Activity Price fixing agreements between competitors
True Monopoly – vertical and horizontal Shared Monopoly – (4 firms of fewer control at least 50% of the market in a sector) Economic Concentration Trend toward increasing economic concentration Frequency of shared monopolies AUTOMOBILE INDUSTRY Industry Concentration
Limited competition in price or quality Planned obsolescence to stimulate sales Control over replacement parts Deviant marketing Short sale Kickback payments from wholesalers Cosmetic changes in used cars Parts monopolies and flat labor costs Retail prices on replacement parts Ford Pinto Case
CORPORATE DEVIANCE IN OTHER INDUSTRIES Poultry Production Savings and Loan Industry
|
||