NCJ Number
38014
Journal
Yale Law Journal Volume: 85 Issue: 8 Dated: (JULY 1976) Pages: 1091-1129
Date Published
1976
Length
39 pages
Annotation
THIS NOTE ARGUES THAT WITH AN UNDERSTANDING OF THE DECISIONMAKING PROCESS UNDERLYING CORPORATE ACTION, LEGAL POLICYMAKERS CAN IMPOSE CRIMINAL PENALTIES ON THOSE MOST CAPABLE OF PREVENTING CORPORATE LAWBREAKING.
Abstract
AS A RESULT, THOSE WHO SHAPE THE CORPORATE DECISIONMAKING PROCESS WILL BE ENCOURAGED TO DO SO IN A WAY THAT ENHANCES THE LIKELIHOOD OF LAW-ABIDING CORPORATE CONDUCT. THE NOTE PROCEEDS BY ANALYZING DIFFERENT CHARACTERIZATIONS OF THE CORPORATE DECISIONMAKING PROCESS AND EXPLORING THEIR IMPLICATIONS FOR THE DEVELOPMENT OF APPROPRIATE LEGAL POLICY. THE ANALYSIS IS STRUCTURED BY THREE WIDELY USED MODELS OF DECISIONMAKING, EACH OF WHICH ISOLATES AND ILLUMINATES DISTINCTIVE FACETS OF THE DECISIONMAKING PROCESS. THE MODELS ARE EMPLOYED TO ELUCIDATE HOW CORPORATE LAWBREAKING TAKES PLACE AND HOW IT MAY BE CONTROLLED. THE RATIONAL ACTOR MODEL (MODEL ONE) ASSUMES THAT CORPORATE LAWBREAKING RESULTS FROM THE PURPOSEFUL, CONSISTENT ACTS OF THE CORPORATE ENTITY. IT SUGGESTS TO LEGAL POLICYMAKERS - LEGISLATORS, PROSECUTORS, AND JUDGES - THAT THE KEY TO CONTROLLING CORPORATE CRIME IS TO FOCUS ON THE RATIONAL CALCULUS THAT UNDERLIES CORPORATE VIOLATIONS, EFFECTING THE SUBSTITUTION OF DESIRABLE COURSES OF ACTION FOR UNDESIRABLE ONES. THE ORGANIZATIONAL PROCESS MODEL (MODEL TWO), VIEWS MOST CORPORATE ACTIONS AS CONSISTING OF SUBCORPORATE UNITS FOLLOWING PREEXISTING ORGANIZATIONAL ROUTINES (STANDARD OPERATING PROCEDURES). IT IMPLIES THAT CORPORATE VIOLATIONS OCCUR BECAUSE EXISTING ROUTINES MANDATE OR ALLOW ILLEGAL ACTIONS OR BECAUSE NO STANDARD OPERATING PROCEDURES EXIST TO PREVENT ILLEGAL ACTIONS. LEGAL POLICY BASED ON THIS MODEL WOULD IMPOSE ON INDIVIDUAL CORPORATE DECISIONMAKERS AN AFFIRMATIVE DUTY TO CORRECT OR ATTEMPT TO CORRECT ROUTINES KNOWN TO BE FLAWED AND TO FERRET OUT FLAWED PROCEDURES THEY HAVE THE AUTHORITY TO CORRECT. ACCORDING TO THE BUREAUCRATIC POLITICS MODEL'S (MODEL THREE) CONCEPTION OF THE DECISIONMAKING PROCESS, THE RESPONSIBILITY FOR CORPORATE CRIME MUST BE DEFINED IN TERMS OF THE POLITICAL RESULTANT OF THE ACTIONS OF INDIVIDUALS. THE LEGAL POLICY IMPLICATIONS OF THIS MODEL SUGGEST THAT CRIMINAL LIABILITY SHOULD APPLY TO THOSE INDIVIDUALS PARTICIPATING IN LAWBREAKING, AS WELL AS THOSE WHO ACQUIESCE IN OR, ADVOCATE AN UNLAWFUL DECISION. (AUTHOR ABSTRACT MODIFIED)