>> Support materials: Chapter 16


Chapter 16: Deviance, crime and social control

 

Case studies Video clips Weblinks Further reading Podcasts
Case studies Video clips Weblinks Further reading Podcasts

 

Case Study

Corporate deviance: The case of WorldCom
WorldCom was once the second-largest phone company in the US. Its CEO and founder, Bernard Ebbers, grew the company over a 15-year period, riding the wave of the IT bubble. He had become wealthy from WorldCom's rising stock price and was known for his flamboyance. Once the IT investment bubble burst in 2000, the company began to produce fraudulent accounting reports that minimised its expenditures and inflated its investments, profits, and share price. In 2002, accounting irregularities led to an investigation and the resignation of its CEO, with the company declaring bankruptcy that same year—the largest company to do so in US history. In 2006, the CEO was jailed for 25 years for his part in the US$11 billion fraud. The knowledge of the fraud was widespread within the company, and along with similar examples of corporate deviance, such as the global company Enron and HIH in Australia, this case posed the question, 'Is corporate deviance common?'

Discussion questions

  1. Is corporate deviance the same as other forms of deviance? Can a corporation be deviant? Can deviance be a collective property or should deviance be viewed as an individual act?
  2. Does following orders or abiding by organisational culture excuse those who commit corporate deviance?
  3. Despite the occasional scandal, white-collar crime is often considered to be less widely investigated or effectively penalised than blue-collar crime. Why might this be so?