Definition of Corporate Crime - Essay Example

?Corporate Crime Introduction This paper attempts to first define corporate crime from the perspective of criminology. It (paper) would then examine the diverse aspects of corporate crime emphasizing upon its seriousness. Definition of corporate crime by criminology Criminology defines corporate crime as the activities of both the corporate management and the employees directly endangering the interests of customers, workers, communities and competitors. Corporate crimes are different from white collar crimes where the people to be benefited are those who directly carry out the acts (white collar crimes). On the contrary, in corporate crimes, the people whose interests are served are those who are distant from the location where the criminal acts are committed. They are directly not involved in the unscrupulous activity. (1) At this point, it also needs to be specifically highlighted that even employees are immensely benefited by corporate crimes, for their jobs are safeguarded along with getting promotions. To put the matter in a nutshell, the very livelihood of the employees becomes dependent on them being active participants in acts of corporate crime. (1) The motives for carrying out these acts (of corporate crime) vary from one case to the other. Yet, it has been seen that the following three are the primary objectives propelling all corporate crimes: A) To bring about both a rise in profits and also a drop in costs. B) To enable a rise in demand as well as a decline in competition. C) To exercise strong control over workers, markets and supplies. (1) Factors abetting corporate crimes It can conveniently be maintained that corporate crimes started to exist from the same time when commercial organizations first began their operations. In the contemporary era, there has been a surge in instances of corporate crime, and there indeed are highly valid reasons behind that. The various features of a typical corporate organization have now become more complex than ever, and the conventional systems of internal control are now obsolete. Additionally, the rapid growth in information technology has ensured that the power now wielded by the corporate is without a precedent. This is so much so that the modern-day corporate organizations are making sure that they are in total control of their governance. (2) The biggest factor to which the growth in corporate crimes is attributable is inadequate corporate governance. Corporate governance encompasses various policies, procedures and laws, etc, which endeavor to make sure that persons employed in an organization are made accountable. As mentioned in the preceding paragraph, they (corporate organizations) are now fully empowered to govern themselves, with the related laws being not so stringent. This is more so when the corresponding scenario of the past is taken into consideration. As has been stated earlier, the existing systems are being rendered powerless in ensuring accountability of corporate organizations. In addition, since the recent past, there has been a tremendous increase in the number of commercial transactions of corporate organizations. This has made things even more difficult for the prevalent laws in preventing the crimes (corporate). Last but in no way the least, the lengthy formal procedures pertaining to the governance have just further compounded the issue. This is in the sense that, they (procedures) have transformed the scenario as being more conducive for carrying out corporate crimes. (2) Various surveys that have been carried out in the recent past point out to a highly disturbing fact. A substantial chunk of corporate crimes of the present-day era are those that have been perpetrated by the managements of huge business houses. At this juncture, it also has to be noted that the losses resulting from such acts are very huge, and thus exerting an adverse impact on the economy. (2) Seriousness of corporate crimes Corporate crime is more serious an issue that what it is actually considered to be, by many people. In this context, it needs to be specifically mentioned that the damage caused by corporate crimes is much bigger than the one related to street crime. This in terms of not just the monetary losses, but also with regard to the bodily harm caused to persons. (3) Here, a rather perturbing fact needs to be highlighted that, in the US, there are hardly any instances where the persons guilty of corporate crimes have been brought to book. It would in no way be an exaggeration in saying that, in USA, perpetrators of corporate crimes are the only class of criminals who are empowered to have control over the related laws. (3) Even the occasional instances of handing over punishment to corporate crimes do not provide any reason for optimism. For, it has to be candidly admitted that for each case of prosecution of corporate criminals, there are countless instances where the law is rendered helpless in penalizing the criminals. The several changes that have been made to various laws, during the course of preceding five years, denote nothing but loopholes – the loopholes that simplify things for persons intending to carry out corporate crimes. The non prosecution agreement and the deferred prosecution agreement, to name a few, are responsible for furthering instances of corporate crime. (3) In the contemporary scenario of the United States, the following is how proceedings take place, in the event of a corporate crime case being brought to law courts. Charges of crime are leveled against the corporate, and it is made to pay some amount as a fine. Apart from that, the guilty persons are not convicted. Subsequently, after duration of about three years, the charges that have been made initially are withdrawn. (3) In this regard, there would be no hesitation in maintaining that the non-prosecution agreements are turning out to be blessings for the big business conglomerates. There is a highly valid reason for saying so. These agreements are making sure that the companies committing corporate crimes are enabled to escape conviction just by paying some fine. And the fact is that the monetary value of the fine is almost inconsequential for the corporate entities, considering the abundant financial resources available at their disposal. (3) Corporate crime – a global issue A steady rise in the instances of corporate crimes is now the order of the day, on a worldwide basis. A major chunk of corporate crimes are attributable to huge multinational companies, which are headquartered in affluent countries. As a matter of fact, the magnitude of corporate crimes is such that, they are exerting an adverse impact on both the political and also the economic scenario. This is in the sense that, corporate crimes are directly leading to an alarming rise in the levels of corruptions in both of the aforementioned (politics and markets). (4) News stories about various corporate crimes have now become a regular feature. At this point, it is more or less imperative that the focus shifts to a quite disturbing fact. During course of the preceding ten years, there is no Wall Street Firm that has not paid a huge amount as fine, as a result of corporate crime. Securities fraud, insider trading and Ponzi schemes, among others, are some of those criminal acts carried out by various firms (of Wall Street). (4) Despite all that, the bitter truth is that there is hardly any accountability. It is now over two years since the global markets were hit by the biggest economic crisis of all times. It was the unethical activities of the largest of Wall Street Banks that brought about the crisis. Yet, till date, not even one of those huge financial institutions had been prosecuted. Even in cases where fines are imposed on the deviating companies, the amount (of fines) is not even a small fraction of the financial gains attained by the companies, by corporate frauds. (4) To put it in other words, the fines are too small to be making any difference to the corporate entities. As a direct outcome, the corporate criminals are not even considering the fines as a penalty. It has now more or less become a norm in business circles that corporate crimes yield utmost returns and that too with minimal risk. (4) Conclusion This paper has to be concluded on a rather pessimistic note that, at least as the things stand now, nothing much can be done to check the menace of corporate crimes. The big multinational business houses are wielding tremendous power, so much so that they are in position to dictate terms even to governments. Yet, it can also be simultaneously hoped that the policy makers would initiate the much-needed changes to various relevant laws. These changes, hopefully, can lead to the advent of a scenario where, instances of corporate crimes become just things of the past. The topic of this paper is an exhaustive one, and it is just not possible to be covering all the aspects in a brief paper such as this one. Yet, a sincere attempt has been made to encompass the most important of all the related points. Sources 1) “Corporate Crime”, critcrim.org/redfeather/lectures/techcrm5.htm, Internet, T R Young, ND. 2) “Corporate Crimes”, halsburys.in/corporate-crimes.html, Internet, LexisNexis India Private Limited, 2008. 3) “Twenty Things You Should Know About Corporate Crime”, alternet.org/story/54093/?page=entire, Internet, Russell Mokhiber, June 2007. 4) “The Global Economy’s Corporate Crime Wave”, thevileplutocrat.com/bile/articles/the-global-economys-corporate-crime-wave/, Internet, Jeffrey D. Sachs, May 2011. Read More