Impact of White Collar Crime on Society
White collar crime includes a variety of law violations by individuals or groups that hold significant positions in society, violations that can have a serious impact on society. This assertion is especially true of corporate misconduct, which can not only jeopardize the safety, health and welfare of citizens but can also impact social attitudes on corporate misconduct, corporations and corporate leaders. A large number of theft offenses fall under the category of white collar crime, with the characteristic elements of the crime involving deception and the lack of violence. The theft can occur directly as in the case of credit card fraud or indirectly as in the case of fraudulent corporate financial reports. These offenses can be traditional forms of theft without violence such as embezzlement or fraud. These types of white collar crime often receive a great deal of publicity when they occur at high corporate levels, which was the case with the accounting fraud that occurred in large firms such as Enron and Worldcom. This type of white collar crime often involves a breach fiduciary duty, which is implied under law and requires that a person in a position of responsibility for the assets of another person or entity act in an honest and diligent manner in caring for those assets. In the modern business environment, however, a new range of white collar crime has developed based on the use of information technology. These offenses include ithe following:
- Identity theft and the wrongful appropriation of information, such as the business records of a firm.
- White collar crime can involve the willful violation of a business regulation, such as conspiring to violate antitrust laws.
The victims of white collar crime can be single individuals that are defrauded or otherwise harmed by the crime as in the case of identity theft or large numbers of people that suffer financial harm due to the crime as in the case of fraudulent financial reporting in large corporations.
An examination of the impact of corporate misconduct on society merits an investigation of at least some of the factors that impact the frequency of such conduct. For example, an author conducted a study that examined how financial performance impacted the frequency of corporate crime. The study sample included 477 of the largest publicly owned manufacturing firms in the United States that were analyzed for their financial performance. This data was then compared with data on federal administrative, civil and criminal actions that were initiated against manufacturing firms. The hypothesis tested was the assumption that pressure to maximize profits is the underlying cause of corporate crime. The results of the study revealed that the variables of poor financial performance, including declining sales, assets and profit, were significantly associated with illegal corporate behavior.
On the impact of white collar crime in general on society, an early study by an author examined the perceptions of citizens in a Canadian city toward white-collar crime. The study sample consisted of 367 randomly selected residents who were drawn from the telephone directory of Fredericton, New Brunswick, Canada. The study instrument included a questionnaire that was derived from the 11-white collar offense categories developed by Rossi et al., which was mailed to each subject in the study sample. An important aspect of this study is that it does not focus solely on corporate crime or misconduct as a variation of white collar crime but rather, on crimes that are common to the average individual but are committed by individuals who hold positions of authority or prominence in society. Nevertheless, the results of the study are still relevant to examining how society responds to white collar crime. The study revealed that the respondents perceived crimes against person as the most serious offenses with crimes against property ranking second in terms of seriousness or severity.