Corporate financial crime: social diagnosis and treatment

Purpose – The purpose of this viewpoint paper is to assist in finding solutions for the growing moral and social issues of financial crime plaguing corporations today.Design/methodology/approach – Methodology includes the synthesis of existing theories in economic sociology and criminology to “diagnose” and “treat” the existing flaws in corporate structures that have led to malaise and malfeasance. Theories include differential association, self‐control, and control balance, taking into consideration the characteristics of individuals and corporate structures.Findings – Findings suggest that corporate structure has to be critically scrutinized and changes implemented, including close examination of informal and formal communication and salary structures.Practical implications – This paper suggests concrete strategies and policy changes for regulators, corporate decision makers, and academics.Originality/value – The synthesis of existing theories in white collar malfeasance and crime provides a template to...

[1]  James R. Marsden,et al.  Trading Volumes with and Without Private Information: A Study Using Computerized Market Experiments , 2000, J. Manag. Inf. Syst..

[2]  R. Johnson Whistleblowing: When It Works-And Why , 2002 .

[3]  N. Shover,et al.  Crimes of privilege : readings in white-collar crime , 2001 .

[4]  Wesley G. Skogan,et al.  On the Take: From Petty Crooks to Presidents. , 1988 .

[5]  C. Perrow Complex Organizations: A Critical Essay , 1975 .

[6]  Leonard J. Mirman,et al.  Information and Equilibrium with Inside Traders , 1989 .

[7]  P. Meiksins,et al.  Controlling Unlawful Organizational Behavior: Social Structure and Corporate Misconduct. , 1985 .

[8]  J. Moon,et al.  'Implicit' and 'Explicit' CSR: A Conceptual Framework for a Comparative Understanding of Corporate Social Responsibility , 2008 .

[9]  Petra Christmann,et al.  Firm self-regulation through international certifiable standards: determinants of symbolic versus substantive implementation , 2006 .

[10]  J. Turner,et al.  社会学理论的结构 = The Structure of Sociological Theory , 1975 .

[11]  Ronald L. Akers,et al.  Criminological Theories : Introduction, Evaluation, and Application , 2000 .

[12]  Nancy Reichman Breaking Confidences: Organizational Influences on Insider Trading , 1989 .

[13]  David O. Friedrichs Trusted Criminals... White Collar Crime in Contemporary Society , 2004 .

[14]  Elizabeth J. Rozell,et al.  The Influence of Personality and Demographic Variables on Ethical Decisions Related to Insider Trading , 1993 .

[15]  Kathleen Daly GENDER AND VARIETIES OF WHITE‐COLLAR CRIME* , 1989 .

[16]  E. Schoenberger The cultural crisis of the firm , 1997 .

[17]  Diane Vaughan,et al.  The Challenger Launch Decision: Risky Technology, Culture, and Deviance at NASA , 1996 .

[18]  J. Moore What is really unethical about insider trading? , 1990 .

[19]  Peter Cleary Yeager,et al.  Industrial Water Pollution , 1993, Crime and Justice.

[20]  H. Seyhun The January Effect and Aggregate Insider Trading , 1988 .

[21]  Mary Blair-Loy It's not just what you know, it's who you know: technical knowledge, rainmaking, and gender among finance executives , 2001 .

[22]  John W. Meyer,et al.  Institutionalized Organizations: Formal Structure as Myth and Ceremony , 1977, American Journal of Sociology.

[23]  Robert H. Tillman,et al.  Profit Without Honor: White Collar Crime and the Looting of America , 1997 .

[24]  Karen Schnatterly,et al.  Increasing Firm Value Through Detection and Prevention of White-Collar Crime , 2003 .

[25]  K. Schuessler,et al.  On Analyzing Crime , 1973 .

[26]  John Braithwaite,et al.  Crime, Shame, And Reintegration , 1989 .

[27]  James R. Marsden,et al.  The Use of Information System Technology to Develop Tests on Insider Trading and Asymmetric Information , 1999 .

[28]  M. Zey The Subsidiarization of the Securities Industry and the Organization of Securities Fraud Networks to Return Profits in the 1980s , 1999 .

[29]  G. Geis White-Collar and Corporate Crime , 2006 .

[30]  Dusten R. Hollist,et al.  Causes of Delinquency , 1950, Juvenile Justice.

[31]  Charles R. Tittle,et al.  Refining control balance theory , 2004 .

[32]  D. Cressey,et al.  Principles of Criminology. , 1947 .

[33]  E. Jensen,et al.  Controlling Transnational Corporations: The Role of Governmental Entities and Grassroots Organizations in Combating White-Collar Crime , 2000 .

[34]  Nancy Reichman,et al.  The Criminal Elite: The Sociology of White-Collar Crime. , 1986 .

[35]  S. Shapiro Crime: White-collar , 2001 .

[36]  Michael R. Gottfredson,et al.  A general theory of crime. , 1992 .

[37]  P. Werhane The ethics of insider trading , 1989 .

[38]  M. David Ermann,et al.  Corporate and Governmental Deviance: Problems of Organizational Behavior in Contemporary Society , 1979 .

[39]  D. Weisburd,et al.  White-Collar Crime and Criminal Careers , 2001 .

[40]  Alex R. Piquero,et al.  Control balance and exploitative corporate crime , 2006 .

[41]  James William Coleman,et al.  The criminal elite : the sociology of white collar crime , 1985 .

[42]  P. Werhane The indefensibility of insider trading , 1991 .

[43]  K. Hagerty,et al.  Insider Trading and the Efficiency of Stock Prices , 1992 .