Understanding Corporate Misconduct: An Overview and Discussion
Ronald R. Sims and Margaret P. Spencer
Corporate misconduct has occupied the headlines of newspapers for much of the last 25 years. Since 1970, 1,043 Fortune 500 corporations have been involved in at least one violation of a major criminal law.1 These violations include kickbacks, bribes, illegal political contributions, tax evasion, fraud, antitrust violations, and securities fraud. All corporations were either tried for criminal charges or entered into consent decrees in order to settle the charges. Fifty executives from 15 different companies went to jail in these cases.
This chapter addresses corporate misconduct and is an introduction for the ideas presented in the remainder of the book. More specifically, this chapter offers a review of business misconduct, focuses on several reasons why organizations should counter corporate misconduct, and provides a brief overview of the roots of corporate misconduct. The discussion then turns to the role of top management and organizational culture in corporate misconduct by providing a brief overview of three cases of corporate misconduct. Several ideas on countering corporate misconduct are highlighted. The chapter concludes with an overview of the ideas presented in the remainder of the book.