Exam (elaborations)

CMY 3702 Exam preparation.

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Course
Cmy 3702

Institution
University Of South Africa

2020 October CMY 3702 Exam preparation. 2018 june paper 25 Marks 1. Give an in depth discussion of the psychological explanation for corporate crime.  Introduction In this section I will be discussing the psychological corporate crime how it affects companies as we narrow view of crime wo...

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cmy 3702 exam preparation

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University of South Africa
Course
Cmy 3702

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CMY 3702 Exam preparation.

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2020 October CMY 3702 Exam preparation. 2018 june
paper
25 Marks

1. Give an in depth discussion of the psychological explanation for
corporate crime.

 Introduction

In this section I will be discussing the psychological corporate crime how
it affects companies as we narrow view of crime would dictate that it is
something that low-income or working-class people do; they steal,
behave violently, drink to excess or take drugs. However, the scale and
the scope of crimes committed by powerful companies and high-income
professionals are staggering, as are the consequences for large
numbers of people affected by white-collar crime (Watts, Bessant & Hill
2008:187).
In the past, conventional criminologists preferred to focus on working-
class crime rather than make corporate crime or the crimes committed
by economic and professional elites a central feature of criminological
theory and research. For years, researchers neglected crimes
committed by more afﬂuent people because factors such as poverty,
subculture norms and social disorganisation were regarded as the roots
of crime.

In 1939, Edwin Sutherland (Schmalleger 1996:339) gave prominence to
white-collar crime in a speech he made in his capacity as president of
the American Sociological Association in which he described the criminal
activities of the rich and powerful. Since then corporate criminology, that
is, criminology relating to both organisations and individuals employed
by organisations, has received the attention of both researchers and
policy makers.
White-collar crime is in particular attributed to a decline in business
ethics, the temptation to steal money and other assets for self-
enrichment purposes, and the resourcefulness of offenders.
Interest in white-collar crime has recently surged, primarily because of
worldwide publicity surrounding the collapse of, or fraudulent activity in,

, multinational corporations. The general public has thus become much
more aware of insider stock trading, banking fraud, and complex
ﬁnancial conspiracies.

 Key definition

A psychological explanation for corporate crime.

External causative factors

In terms of the approach set out in Walsh and Hemmens (2008:490–491) and Walsh
and Ellis (2007:406), external factors that cause crime are related to internal or
personality factors. The following three independent but often interacting external
causative factors for corporate crime are identified:

 Pressure.

The pressure of a highly competitive market sometimes tempts individuals to take
shortcuts and break certain rules, regulations and legislation in order to be successful.

 Opportunity.

Large, prosperous companies which reward innovative ideas and outstanding results,
irrespective of how they are achieved, provide the opportunity to transgress the rules.

 Predisposition.
A company with weak controls, where employees strongly associate themselves with
the company and where poor business ethics favour the breaking or sidestepping of
rules and laws, creates a predisposition to commit corporate crime

I will be focusing on the internal causative factors on cooperative crime.

Internal causative factors.

The following characteristics of corporate offenders are identified as internal factors
that cause corporate crime.

 Individual characteristics.
A low IQ (i.e. intelligence quotient), poor self-control and conditioning are obviously
not individual characteristics applicable to someone who has worked in a disciplined
fashion for years to achieve his/her high-status position (e.g. at management level).

 Moral argument.
Those people who operate at a high level of cognitive moral development are more
independent and behave in a way that corresponds with their own convictions of

, what is right and what is wrong. People who function at a lower level of cognitive
moral development tend to conform to group norms.

Therefore, the lower the level of moral development the greater the tendency to
become involved in corporate misdemeanours if the external factors of pressure,
opportunity and predisposition present themselves.

 Machiavellism.
This term refers to the manipulation of others for personal gain (Walsh & Hemmens
2008:491). A characteristic of Machiavellian behaviour is exploiting and misleading
colleagues and bullying subordinates. In the business world, individuals with this trait
will use any means – even committing crimes such as theft and fraud – to achieve
their goals.

An explanation based on causative factors.
Walsh and Hemmens (2008:490–491) and Walsh and Ellis (2007:406) offer the
following psychological explanation for corporate crime on the basis of the above
causative factors. The misdemeanours of corporate criminals can be explained in
terms of the following three variables:

• a locus of control
• moral argument (internal causative factors)
• Machiavellianism (internal causative factors)
People have either an internal or an external locus of control. People with an internal
locus of control tend to believe they can affect outcomes and they are relatively
resistant to the inﬂuence of others. In contrast, people with an external locus of
control emphasise the power of environmental factors and believe that they as
individuals cannot inﬂuence the situation but that external circumstances can. People
guilty of corporate crimes tend to have an external locus of control. This supports
Sutherland’s argument that such offenders are more susceptible to definitions in
favour of unlawful behaviour such as fraud, particularly if the top structure of the
company is in favour of such definitions. Hence, the behaviour of corporate offenders
may be ascribed to the following characteristics.

• an external locus of control

• a low level of cognitive moral development

• Machiavellianism (manipulation)

 Body with headings

 Conclusion.

Although definitions of white-collar crime vary in terms of content, the concept by
and large includes business-related crimes such as employee theft and fraud. White-
collar crime often requires the deception of a gullible victim, and access and

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