Psychology Courses / Course / Chapter

Corporate Crime: Types, Causes & Examples

Margaret Stone, Yolanda Williams
  • Author
    Margaret Stone

    Margaret has taught both college and high school English and has a master's degree in English from Mississippi State University. She holds a Mississippi AA Educator License.

  • Instructor
    Yolanda Williams

    Yolanda has taught college Psychology and Ethics, and has a doctorate of philosophy in counselor education and supervision.

Understand what corporate crime is along with its definition. Learn about the causes of corporate crime, history of corporate crime, and corporate crime examples. Updated: 06/20/2022

Table of Contents

Show

Corporate Crime

What is corporate crime? Corporate crime, sometimes called white-collar crime, is crime committed by individuals on behalf of a business. The corporate crime definition indicates clearly that corporate crimes are committed by individuals to benefit the companies that employ them, although the individuals involved may themselves profit from such acts.

Criminologists have proposed several theories of corporate crime. The first formal explanation for corporate crime was put forward by criminologist Edwin Sutherland in 1939. His Theory of Differential Association suggests that criminal behavior occurs when individuals associate with others who view criminal acts in a positive light. Sutherland also claims that criminal behavior occurs only if individuals are in an environment where most associates do not view criminal behavior in a negative way.

Some criminologists have criticized the Theory of Differential Association, noting that it fails to consider other causes such as depression and drug abuse. Sutherland's theory also fails to account for differences among individuals.

Corporate Crime Examples

Corporate crime examples are plentiful and take many forms. Violation of environmental laws, bribery, false claims, and corporate fraud are a few examples of corporate crime; types of white-collar crimes are limited, of course, only by the criminal's imagination.

  • Individuals who violate environmental laws designed to protect the environment typically do so to increase corporate profits. Although the company may benefit from failing to abide by environmental regulations, in this type of case the individuals who instigate the crime likely expect to benefit indirectly as well through corporate bonuses, increased salary, or higher stock prices. An example of this type of crime can be found in a case involving Royal Caribbean Cruises Ltd. In 1999, the company was ordered to pay a record-breaking 18 million dollar fine for routinely dumping waste oil, a widespread practice that occurred throughout the company's fleet. Representatives of the company also lied to the Coast Guard regarding oil disposal by submitting falsified oil logs.
  • Bribery occurs when an individual offers something of value to another person to influence the recipient's actions. In 2014, Rite Aid Corporation was ordered to pay a 2.99 million dollar fine for offering gift cards to Medicare and Medicaid patients to influence them to transfer their prescriptions to Rite Aid pharmacies.
  • In the 1980s, Beech Nut settled a case that showed the company had made false claims when it claimed its apple juice was 100% fruit juice. In fact, the product was shown to consist of primarily sugar water with only a small amount of apple juice.
  • Corporate fraud involves the intentional misstatement of facts about the company's financial situation or its corporate actions. This kind of misrepresentation is intended to mislead the public or increase company profits. In the largest case of corporate fraud at the time, WorldCom, a Mississippi-based telecommunications company, was found to have overstated its earnings to drive up stock prices. These actions led to the company's bankruptcy and a 25-year prison sentence for WorldCom's CEO.


Even an old, established company like Beech Nut can have its reputation damaged by corporate crime.

1919 Beech Nut brand peanut butter magazine advertisement.


An error occurred trying to load this video.

Try refreshing the page, or contact customer support.

Coming up next: Diana Baumrind: Parenting Styles & Theory

You're on a roll. Keep up the good work!

Take Quiz Watch Next Lesson
 Replay
Your next lesson will play in 10 seconds
  • 0:01 What Is Corporate Crime?
  • 1:53 Types of Corporate Crime
  • 3:43 Lesson Summary
Save Save Save

Want to watch this again later?

Log in or sign up to add this lesson to a Custom Course.

Log in or Sign up

Timeline
Autoplay
Autoplay
Speed Speed

History of Corporate Crime

Criminologist Edwin Sutherland, author of the Theory of Differential Association, is an important figure in the history of corporate crime. Sutherland was the first to use the term corporate crime in 1939, although the practice has been occurring since corporations were recognized as business entities in the 14th century.

Some criminologists speculate that the roots of corporate crime can be found in competitive business environments in which the goal is to crush competitors in the quest for higher profits. This is not always the case, however, as some instances of white-collar crime have been executed simply to keep a business afloat. In any case, the many varieties of corporate crime are always propelled by a human criminal actor who devises, oversees, or participates in a criminal act involving a business.

To unlock this lesson you must be a Study.com Member.
Create your account

Frequently Asked Questions

What are some examples of corporate crime?

One example of corporate crime involved Royal Caribbean Cruise Lines practice of dumping oil, a violation of environmental laws. Another example occurred when Beech Nut made false claims regarding the ingredients in its apple juice.

What is the most common crime committed by corporations?

Environmental crimes are the most common type of corporate crime. It is important to remember, however, that individuals rather than companies initiate crimes. They may do so on behalf of a corporation, but a human hand is always involved in corporate crime.

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use Study.com

Become a Study.com member and start learning now.
Become a Member  Back

Resources created by teachers for teachers

Over 30,000 video lessons & teaching resources‐all in one place.
Video lessons
Quizzes & Worksheets
Classroom Integration
Lesson Plans

I would definitely recommend Study.com to my colleagues. It’s like a teacher waved a magic wand and did the work for me. I feel like it’s a lifeline.

Jennifer B.
Teacher
Jennifer B.
Create an account to start this course today
Used by over 30 million students worldwide
Create an account