NCJ Number
62125
Date Published
1979
Length
18 pages
Annotation
COURT RECORDS OF CASES INVOLVING BUSINESS FIRMS' VIOLATIONS OF AUSTRALIA'S 1974 TRADE PRACTICES ACT WERE EXAMINED IN ORDER TO IDENTIFY DEFECTS IN CORPORATE ORGANIZATION WHICH CONTRIBUTED TO THE CRIMES.
Abstract
CORPORATE CRIME WAS DEFINED AS CRIME COMMITTED BY OR ON BEHALF OF THE CORPORATION. MOST OF THE CASES STUDIED INVOLVED MISLEADING ADVERTISING. ORGANIZATIONAL FACTORS RATHER THAN INDIVIDUAL FACTORS WERE STUDIED BECAUSE KRIEGSBURG'S MODELS OF CORPORATE DECISIONMAKING APPEAR MORE APPROPRIATE TO THE STUDY OF CORPORATE CRIME THAN DO SOCIOLOGISTS' VARIOUS THEORIES. IN THE PRESENT STUDY, SEVERAL TYPES OF DEFECTS IN ORGANIZATIONAL DECISIONMAKING WERE FOUND TO CONTRIBUTE TO THE CRIMES STUDIED. THE MOST COMMON DEFECT WAS LACK OF ANY SENIOR MANAGER ACCOUNTABLE FOR THE ACCURACY OF ADVERTISING MATERIALS. A SECOND TYPE OF ORGANIZATIONAL DEFECT WAS FAILURE TO DEAL ADEQUATELY WITH CONSUMER COMPLAINTS ABOUT ADVERTISING. THE THIRD WAS FAILURE TO PROVIDE ADEQUATE PRODUCT INFORMATION TO SALESMEN, THUS ENCOURAGING THEM TO INVENT PRODUCT INFORMATION. ALTHOUGH IN MOST CASES THE OFFENSES RESULTED FROM NEGLIGENCE, IN SOME CASES THE VIOLATIONS WERE CLEARLY INTENTIONAL. FOR CASES WHERE DEFECTS IN THE ORGANIZATION WERE INVOLVED, THE STUDY RESULTS SUPPORTED THE LAW'S PRESUMPTION OF CORPORATE, RATHER THAN INDIVIDUAL RESPONSIBILITY. IN SOME CASES, HOWEVER, THIS PRESUMPTION IS UNREALISTIC. RESULTS ALSO SUGGEST THAT TO PREVENT CORPORATE CRIME, DEFECTIVE OPERATING PROCEDURES MUST BE IDENTIFIED AND CORRECTED. PUBLICIZING PROSECUTIONS WILL ENABLE OTHER COMPANIES TO CORRECT THEIR ORGANIZATIONAL DEFECTS. IN SOME CASES, HOWEVER, LEGAL INTERVENTION TO CORRECT ORGANIZATIONAL DEFECTS, OR TO PROSECUTE THE INDIVIDUAL INVOLVED, WOULD BE A MORE EFFECTIVE MEANS OF DETERRING CORPORATE CRIME. FOOTNOTES WHICH INCLUDE REFERENCES ARE PROVIDED. FOR RELATED ARTICLES IN THE SAME BOOK, SEE NCJ 62118-62124 AND 62126. (CFW)