This article brings forth words that would scare any Wall-Street analyst; words such as organizational crime, white-collar crime, and corporate crime. But what is organizational crime? Palmer and Maher describe organizational crime as “any behavior perpetrated by organizational officials in the course of fulfilling their organizational roles, that judged by social control agents to violate the law.”
The authors actually categorize organizational crime in tree categories: corporate crime occurs when the organization is a corporation, and an example of that could be a price-fixing arrangement. Again when the organization is a corporation and the crime serves the employees interest, it is called a white-collar crime, like embezzlement. Thirdly, organizational crime, can occurs when the crime serves the both the organization’s and employee’s interests, such as what happened at Enron.
Furthermore, organizational crime can be explained by two theories, the dominant approach and the alternative approach. The dominant approach is stands on two interconnected assumptions:
- That people make discrete decisions to embark on wrongful courses of action
- That people develop positive dispositions toward wrongful courses of actions before embarking on them.
The second theory, the alternative approach explains crime as a process. It assumes that people embark on wrongful courses of actions as the result of a process. Taking it from this last perspective, it means that a “few morally bankrupt managers at the top of the organization can enlist an army of naïve, ethical, law abiding employees in organizational crime.” (Palmer, Maher, 365)
To make it even more interesting, and to relate to Enron, I plan on drawing the paradigm between the alternative approach and the creep towards unethical behavior, once the top managers realized what they could do, starting with de-regulation and going all the way to creating ghost companies, creating an environment where wrongdoing was acceptable and why no one asked the hard questions? That is exactly what this model explains, because they took small steps towards living little room for people to engage in rational cost-benefit calculations or a normative assessment of an ethical behavior.