White Collar Crime

White-Collar Crime Case Study
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White-Collar Crime Case Study
What steps can organizations take to reduce the physical and psychological distance between financial crimes and the harms they cause?
Many of the corporate executives implicated in financial reporting scandals did not consider the moral outcomes of their actions. Interestingly, the executives noted that such malpractices were tailored to solve current business problems to save the firm’s image and careers (Johnson, 2021). That said, organizations can employ James Rest’s four steps of moral development that culminate into ethical actions. The steps begin with the end-product of the action – and then the procedures that generate such dishonest behaviors. Therefore, firms can reduce the psychological and physical disconnect between financial fraud and the negative implications by practicing moral sensitivity [recognition], moral judgment [reasoning], (c) ethical focus [motivation], as well as the moral character [action] (EthicsSage.com, 2018). Rest’s four steps must happen for a moral decision to take place.
What might be other reasons that executives commit white-collar crimes?
Other reasons that drive executives to commit white-collar crimes include respectability and power. For instance, Bernie Madoff’s investment fraud can be traced to respectability that “got into his head” to the extent that he lacked empathy for his family. Respectability makes executives lack self-control which drives them to legitimize their dishonest dealings (Hayes, 2021). Accordingly, a company director should be considerate to ensure that power in the form of information asymmetry does not lure them into engaging in insider trading activities.
How can we help ensure that moral considerations are factored into important organizational decisions?
One approach to ensure that moral considerations are taken into account in making a crucial organizational decision is attention. Attentiveness ensures that the decision-makers understand the action holistically, including the effect on stakeholders and the company’s sustainability. It is also vital to utilize evidence-based decision-making processes. In this context, decision-makers gather data and reliable literature to ensure that their actions generate desirable outcomes. Lastly, we should e...