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Lecture 20
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(IL)LEGAL INTERNATIONAL BUSINESS AND FINISH
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13/12/2019LECTURE 20: (IL)LEGAL INTERNATIONAL BUSINESS AND FINISH
TODAY’S TOPICS TODAY’S LEARNING OUTCOMES
• Where do legal and illegal activities fit in By the end of this session you will be able to:
international organisations? • Discuss illegal elements of
• Definitions and characteristics of illegal activity international business
• Motivations • Understand how different states are
• Moving capital and assets used hide illegal activities
• Multinational enterprises and questionable • Describe how illegal and legal activities
activities fit together
• Essay recap
• Questions?
‘LEGAL’ ORGANISATIONS UNDERTAKE ILLEGAL ACTIVITIES
And illegal organisations undertake legal activities …
WHAT PERCENTAGE OF CRIMES REPORTED TO THE FBI
BETWEEN 1997-1999 WERE ‘WHITE COLLAR’ CRIMES?
A. 9 Answer is A
B. 19 White collar crimes can be seen as
C. 36 embezzlement
D. 52
BARCLAYS AND LIBOR RIGGING
‘Legal’ organisations undertaking illegal activities
• Manipulation of the LIBOR rate
• Reduced or increased lending costs for networks of financiers
• Market manipulation: innocent parties had to pay above the market rate
• Mass market manipulation as global markets all use LIBOR (e.g US)
Corporate criminals
Video about Fraud squad to probe Libor manipulation https://www.youtube.com/watch?
v=vbdFQa_Psws
CHRISTOPHER COKE AND THE ‘SHOWER POSSE’
‘Illegal’ organisations undertaking legal activities
• Jamaica as transit point of drugs to US
• Legitimate businesses in construction
• Political connections
• Provided healthcare, schools, education and micro loans to community where government had
failed – chief welfare officer
Entrepreneurial philanthropy?
, DEFINING MULTINATIONAL ORGANIZATIONS (ILLEGAL)
• Difficult to define organisational crime due to differences in law and culture across different political
economies
• Need to situate networks of activity in international and local context
• Need to distinguish between one-off events, accidents and sustainable enterprises
• Albanese (2014:4) ‘…continuing criminal enterprise that works rationally to profit from illicit
activities that are often in great public demand. Its continuing existence is maintained by the use of
force, threats, monopoly control and/or the corruption of public officials’
• At some point in time organizations will break the law
• You can start describing criminality in organizations when it starts to become a normality
DEGREES OF ILLEGALITY
Accidental non-compliance – is any multinational fully legal all the time?
COMPLICATING THE LEGAL-ILLEGAL DIVIDE: THE EXAMPLE OF ENTREPRENEURSHIP
• Not all enterprising activities are initially legal…
• You can trade in legal goods/services, with an unregistered/illegal structure (Al-Mataani, et al. 2016;
Williams 2002)
• Illegal activities can be examined through entrepreneurial theory:
o Intentions and social norms
o Risk taking for profit
o Use of a division of labour
o Human and social capital more important
o Opportunity recognition, evaluation and exploitation
If you come from a social group where criminality is a habit, getting into it when you create a
business may seem quite simple
ETHICS VERSUS LEGALITY
• Ethical view and legality of crimes is situated within jurisdiction
• Is low level fraud as bad as bank hacking?
• Laws and legality are not fixed – they are fluid. What may be legal one day can become illegal
another and vice versa
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