NCJ Number
151028
Date Published
1994
Length
6 pages
Annotation
The way in which transactions and transaction systems facilitate and, in some cases, generate unlawful organizational behavior is explored.
Abstract
Transaction systems which develop to cope with complex legitimate exchanges between organizations can also be used to secure gains unlawfully. Because transactions of complex organizations are characterized by a high degree of formalization, intricate processing and recording methods, exchanges based on trust, and general monitoring procedures, illegal conduct can be carried out with little risk of detection. Unlawful conduct may occur regularly when exchanges between organizations rely on market signals as the basis for decisionmaking. Signals can be falsified, and transaction systems with incomplete information gathering and broad monitoring procedures facilitate the fraudulent attainment of resources. Transaction systems may also systematically generate illegality by creating system interface problems. Unlawful conduct may occur because the transaction system itself blocks legitimate access to resources. Opportunities for violations multiply as transaction system complexity increases. While not all organizations in a market signaling situation or confronting system interface problems resort to unlawful behavior, some organizations may be more likely to become offenders. Because the complexity of interorganizational exchanges appears to have systematic consequences for illegality, reducing transaction complexity may reduce violation rates. To realize this possibility, organizations must assume a social responsibility and recognize the relation between transaction complexity and unlawful conduct. Self-surveillance and transaction system modification are in an organization's best interest in order to control unlawful behavior. An example of illegal organizational behavior involving Medicaid fraud is presented. 10 references and 1 note