NCJ Number
70887
Journal
Criminology Volume: 18 Issue: 2 Dated: (August 1980) Pages: 198-214
Date Published
1980
Length
17 pages
Annotation
A research procedure based on the organizational nature of corporate crime is outlined, and the procedure is used to evaluate the impact of prosecutions under Australia's Trade Practices Act.
Abstract
The methodological strategy of this study emphasizes assessing the impact of corporate sanctions by investigating whether or not the company has subsequently corrected the defect. It assumes that when a company changes its defective procedures, the risk of recidivism is then reduced and the sanction is effective. Nineteen companies were the subjects of successful criminal prosecutions under the consumer protection provisions of the Trade Practices Act of 1974. In each case the company was fined, with fines ranging from a few hundred dollars to a maximum of $100,000. The research reported here concerns the impact of prosecution on these companies. First, four organizational defects that contributed to the commission of the offenses are identified: (1) management's failure to check adequately the accuracy of promotional material going to the public, (2) inadequate response to public complaints after misleading or inaccurate advertisements, (3) top management's failure to inform salesmen of all relevant facts about the product, and (4) failure, in the case of a used car firm, to ensure correct mileage readings on replacement speedometers. Interviews were used to investigate whether the companies concerned had remedied the organizational defects. Of the 15 companies in which offenses were attributable to organizational defects, nine made significant changes to reduce the likelihood of recidivism; the prosecution led to significant organizational improvements in at least 60 percent of the cases. Some wider implications of the study are addressed. Fifteen references are provided.