Blue-collar crime is a generic term used to describe crimes that are not white-collar crimes. In business, property crimes (rather than person crimes) are a primary concern. A property crime is a crime involving damage to property, while a person crime is a crime involving the injury to a person’s body. Larceny is a major concern for many businesses. White-collar criminals are not the only ones who commit larceny. In retail, for instance, primary loss prevention concerns include shoplifting. Shoplifting is a serious and prevalent crime. Additionally, in any type of business, employee theft is a serious problem.
Last, vandalism is unauthorized property damage, and any business with a physical presence can become the target of vandals.
KEY TAKEAWAYS
Crime is a very important consideration in the business world. White-collar crimes are particularly insidious because white-collar criminals work from the inside, can be difficult to spot since they often hold positions of trust, and use deception as their primary tool. Blue-collar crimes also pose substantial risk of loss for businesses. Fraud, cybercrime, environmental crime, organized crime, and various forms of property crimes are all serious threats to businesses. Crime carries high personal costs not only to the individuals involved in the misconduct but also to society at large, including the corporations and others who depend on those corporations.
EXERCISES
- Consider the video in Note 10.59 "Hyperlink: Too Good to Be True? Statistically Impossible Returns" concerning Harry Markopolos’s use of statistical modeling to identify Bernie Madoff’s Ponzi scheme. What role should statistical analysis and probability modeling have played in the regulatory environment that could have identified the Madoff Ponzi scheme disaster earlier?
- How can businesses protect themselves from embezzlement? What are some specific strategies that could be devised to ensure that bookkeepers or accountants do not skim money from the business?
- If you caught an employee stealing one dollar’s worth of office supplies, what would you do? What about twenty five dollars’ worth of supplies? One hundred dollars’? One thousand? Should employees be trained not to even take a pencil home? Would that type of training be worth the cost of the training itself?
- Check out Note 10.76 "Video Clip: Who Said Antitrust Is Boring? Not Hollywood!" to review some of the convictions against corporations. Are penalties payable to nonprofit environmental organizations appropriate penalties for corporate convictions for environmental crimes? Why or why not?
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