White-Collar Crime and Organizational Culture


Fraud and white-collar crimes are common forms of crimes that people commit in various aspects and positions in the corporate world. Fraud and white-collar crimes have a similar meaning as they refer to the non-violent crimes that people commit with the basic objective of gaining money using illegal means. The cases of white-collar crimes have been increasing exponentially in the 21st century due to the advent of technology because fraudsters apply technological tools in cheating, swindling, embezzling, and defrauding people or organizations.

White-collar crime is a complex issue in society because its occurrence is dependent on many factors such as organizational structure, organization culture, and personality traits. Thus, this literature review examines how organizational structure, organizational culture, and personality traits contribute to the occurrence of white-collar crimes.

We will write a custom White-Collar Crime and Organizational Culture specifically for you
for only $14.00 $11,90/page
308 certified writers online
Learn More

White-Collar Crime and Organizational Structure

White-collar crimes and organizational structure are related because white collar-crimes thrive in organizations that have weak structures. According to Price and Norris (2009), the elites who commit white collar-crimes usually exploit weaknesses in organizational structure and formulate rules and regulations that favor their crimes. Makansi (2010) examines case studies to prove that white-collar crime is dependent on organizational structure.

For example, the financial crisis that the Enron Corporation faced in 2001-2002 originated from poor standards of Financial Accounting Board, which failed to provide a standard model of valuing natural gas and fuel. Moreover, a financial crisis that rocked the securities market in 2008 was due to fraudulent activities in the pricing of securities products. These examples prove that flaws and gaps in organizational structures contribute to the occurrence of white-collar crimes in most organizations. According to Makansi (2010), fraudsters exploit loopholes that are in the organizational structure and perpetuate white-collar crimes. Thus, stringent regulations and standard procedures of operations are necessary to curb white-collar crimes in organizations.

Following the revelation that the global financial crisis that emerged in 2008 was due to white-collar crimes in securities markets, insurance companies, and mortgage firms, scholars have attributed white-collar crimes to organizational structure. Simpson (2011) argues that white-collar crime is a complex issue in modern organizations and that the statistics do not capture the reality of white-collar crimes. In a meta-analysis approach, the study highlights various forms of white-collar crimes and asserts their complexity in terms of their occurrence, effects, and deterrence (Simpson 2011).

Comparatively, since the prevalence of white-collar crimes varies from one organization to another, it implies that the differences in organizational structures are significant factors that determine the occurrence of white-collar crimes among organizations. In this view, a meta-analysis conducted by Simpson (2011) concludes that criminogenic organizations have an amorphous structure of markets and the economic environment under which employees operate, and thus create a favorable environment for fraudsters. In this view, the study recommends the establishment of institutions and regulations to strengthen organizational structures and prevent white-collar crimes.

The unprecedented financial failures that the United States faced in the past century confirm that white-collar crime is an organizational issue. In his study, Pontell (2004) describes case studies of financial institutions and corporate and accounting scandals that led to the fall of Enron Corporation. The occurrence of white-collar crimes in these case studies was due to the organizational structures that provided avenues for fraudsters to commit white-collar crimes.

Pontell (2004) argues that organizations are potential vehicles of fraud as fraudsters hijack them and use them to achieve their desired ends. In this view, the savings and loan crisis and the fall of Enron Corporation are classical examples of the effects of white-collar crimes. In the case study, Pontell (2004) identifies flaws such as structural disorders, regulatory interference, criminogenic environment, and mismanagement. Thus, the study emphasizes the role of organizational structure in contributing to the occurrence of white-collar crimes.

Get your
100% original paper on any topic done
in as little as 3 hours
Learn More

Since individuals in an organization use systems in performing their duties and responsibilities, the nature of these systems determines their predisposition to white-collar crimes. Kennedy and Ticknor (2012) state that corporate crimes happen in complex organizations where the corporate environment is prone to manipulation by managers. The corporate environment determines the occurrence of white-collar crimes because organizations have structures and systems that allow fraudsters to commit these crimes and get away with them. Hence, Kennedy and Ticknor (2012) recommend the use of virtual reality (VR) as a model of ascertaining the existence of white-collar crimes in organizations.

Virtual reality is a model that uses information technology in ascertaining the views of different people concerning the prevalence of white-collar crimes in various organizations. The use of virtual reality is effective in collecting information when compared to case studies, personal interviews, surveys, and vignettes (Kennedy & Ticknor 2012). Therefore, virtual reality is an effective model that can establish the existence of white-collar crimes in organizations.

White-Collar Crime and Organizational Culture

White-collar crimes emanate from a culture that develops in most organizations. Given that white-collar crime is unethical behavior, organizations are struggling to eliminate it by instilling ethical culture. Marks (2012) argues that “an ethical culture is the foundation of good corporate governance and arguably the most powerful control in any organization” (p. 33). When an organization does not nurture ethical culture, white-collar crimes emerge.

In a bid to establish behavioral characteristics that individuals possess in an organization, Marks (2012) states that individuals have behaviors that cumulatively contribute to the organizational culture. White-collar criminals have behavioral elements that compel them to commit crimes. According to Marks (2012), immorality, arrogance, deception, cleverness, creativity, and poor management are some of the behavioral elements that contribute to an organizational culture that is tolerant of aberrant behaviors that promote white-collar crimes. The management members of organizations that collapsed due to white-collar crimes had some of these behavioral elements.

Over the years, scholars have formulated and applied various theories of organizational culture in elucidating how white-collar crimes occur. The studies that apply theories of organizational culture hold that culture has a significant influence on human behavior because it causes employees to commit white-collar crimes (Trahan 2011; Champion 2011). The presence of criminogenic culture in an organization leads to the development of unethical behaviors among employees, which consequently leads to the emergence of white-collar crimes.

The application of theories in describing the occurrence of white-collar crimes fails to explain how subordinates acquire cultural values from their superiors. In this view, social learning theory fills the gaps in elucidating how criminogenic culture makes employees commit white-collar crimes because it applies the principles of operant conditioning and association-reinforcement (Trahan 2011). Subordinates acquire criminogenic values from their superiors because the criminogenic behaviors flow through the management system.

The differential social association theory is one of the theories that view white-collar crime as an organized form of crime due to social organization. In a study, Matsueda (2006) applies three concepts of the differential association theory, namely, differential group association, normative conflict, and differential association in contextualizing white-collar crimes in the society. The concept of differential social organization conceives that the occurrence of white-collar crimes is dependent on cultural values and vices, which oppose and support white-collar crimes respectively. The trade-off between values and vices ultimately determines the prevalence of white-collar crimes in most organizations.

We will write a custom
White-Collar Crime and Organizational Culture
specifically for you!
Get your first paper with 15% OFF
Learn More

Since society can influence human culture and behavior, the concept of normative conflict views society as a significant factor that contributes to the occurrence of white-collar crimes. Differential association is a third concept that focuses on the knowledge and skills that are necessary for one to conduct fraudulent activities. In applying the theory of differential association, Matsueda (2006) notes that gaps in the understanding of organizational culture exist, as theories do not account for the organizational variation in the occurrence of white-collar crimes.

White-Collar Crime and Personality

Since not everyone can commit white-collar crimes, there is ample evidence to prove that white-collar crimes relate to certain personalities. Blickle and Schlegel (2006) conducted cross-sectional research to study the personality attributes that influence people to commit white-collar crimes using Social Desirability scale, hedonism scale, narcissism scale, conscientiousness scale, and behavioral self-control scale. Since prior studies have used one scale in determining personality correlates of white-collar crimes, the study sought to fill the reliability and validity gap by using numerous scales in one questionnaire.

In the cross-sectional study, Blickle and Schlegel (2006) discover that high conscientiousness, high narcissism, low behavioral self-control, high hedonism, and low integrity are personality attributes that predispose people to commit white-collar crimes in most organizations. These findings confirm that white-collar crime is partly a personality issue in most organizations (Apel & Paternoster 2009). Hence, personality traits are important in studying white-collar crimes.

Personality disorders usually cause white-collar crimes. According to Lesha and Lesha (2012), psychopathy is a personality disorder that predisposes people to commit white-collar crimes. As the body of research has not examined the effect of personality disorders among white-collar criminals (Watt 2012; Feeley 2006), the study of psychopathy is essential to provide the impacts of these disorders on individuals.

Lesha and Lesha (2012) assert that positive extroverts, agreeable businesspersons, and neurotic persons are likely to commit white-collar crimes. Likewise, individuals with psychopathic traits exhibit traits of white-collar criminals such as narcissism, egoism, anger, self-centeredness, hostility, disagreeableness, competitiveness, and manipulativeness amongst others. Lesha and Lesha (2012) add that psychopathic individuals are likely to deceive, con, manipulate, and charm people. Hence, it implies that psychopathy influences personality traits and makes one commit white-collar crimes.

Since gender influences personality traits, a body of evidence indicates that men and women have different predispositions to white-collar crimes. Despite the existence of an apparent difference in the rates of white-collar crimes between men and women, studies have not elucidated these differences clearly (Feeley 2006). The gendered difference in the occurrence of white-collar crimes is due to the complex interaction of personality traits and societal culture.

In a survey conducted among 255 white-collar criminals, the survey showed that most of the white-collar criminals are men. Gottschalk and Glaso (2013) established that women are less likely to commit white-collar crimes than men do because of their roles, organizational structure, culture, and personality traits. This means that personality traits coupled with gender attributes are responsible for the high rates of white-collar crimes among men.

Not sure if you can write
White-Collar Crime and Organizational Culture by yourself?
We can help you
for only $14.00 $11,90/page
Learn More

Overall, the literature review indicates that organizational structure, organizational culture, and personality traits determine the occurrence of white-collar crimes in organizations. In this view, to combat white-collar crimes, the criminal justice system needs to devise interventions that target organizational structure, organizational culture, and personality traits in the prevention of white-collar crimes.

References

Apel, R, & Paternoster, R 2009, ‘Understanding “criminogenic” corporate culture: What white-collar crime researchers can learn from studies of the adolescent employment-crime relationship. The Criminology of White-Collar Crime, vol.1 no. 1, pp. 15-33.

Blickle, G, & Schlegel, A 2006, ‘Some personality correlates of business white-collar crimes’, An International Review, vol. 55 no. 2, pp. 220-233.

Champion, D 2011, ‘White-collar crimes and organizational offending: An integral approach’, International Journal of Business, Humanities, and Technology, vol. 1 no. 3, pp. 34-35.

Feeley, D 2006, ‘Student article: Personality, environment, and the causes of white-collar crime’, Law & Psychology Review, vol. 201 no. 4, pp. 1-17.

Gottschalk, P, & Glaso, L. 2013, ‘Rotten apples versus rotten barrels in white collar-crime: A quantitative analysis of white-collar offenders in Norway’, International Journal of Criminal Justice Sciences, vol. 7. no. 2, pp. 575-590.

Kennedy, J, & Ticknor, B 2012, ‘studying corporate crime: Making the case virtual reality’, International Journal of Criminal Justice Sciences, vol. 7 no. 1, pp. 416-430.

Lesha, J, & Lesha, D, ‘Psychopathy and white-collar crime: A review of literature’, SEEU Review, vol. 8 no. 2, pp. 1-18.

Makansi, J 2010, ‘Making white-collar crime legal: Organizational and sociological structures that protect and enhance the financial elite’, Journal of Social Science, vol. 2 no. 2, pp. 1-5.

Marks, J 2012, ‘A matter of ethics: Understanding the mind of a white-collar criminal’, Financial Executive International, vol. 1 no. 1, pp. 31-34.

Matsueda, R 2006, ‘Differential social organization, collective actions, and crime’, Crime, Law, and Social Change, vol. 46 no. 1, pp. 3-33.

Pontell, H 2004, ‘White-collar crime and major financial debacles in the United States’, Resource and Materials, vol. 167 no. 1, pp. 189-201.

Price, M, & Norris, D 2009, ‘White-collars crime: Corporate and securities and commodities fraud’, Journal of the American Academy of Psychiatry and Law, vol. 37 no. 4, pp. 538-544.

Simpson, S 2011, ‘Making sense of white-collar crime: Theory and research’, State Journal of Criminal Law, vol. 18 no. 3, pp. 481-502.

Trahan, A 2011, ‘Filling in the gaps in culture-based theories of organizational crime’, Journal of Theoretical and Philosophical Criminology, vol. 3 no. 1, pp. 89-109.

Watt, R 2012, ‘University students’ propensity towards white-collar versus street crime’, Studies by Undergraduate Researchers at Guelph, vol. 5 no. 2, pp. 5-12.

Check the price of your paper