Psychopathy and Corporate Crime

Psychopathic Personality Diagnostic Checklist

INTRODUCTION

The relationship between psychopathy and violent street-level offenses has been well established.  However, psychopathic characteristics and behaviors have been normalized, tolerated, and even valued among corporate offenders. There is a paucity of research that explores the relationship between psychopathy and forms of elite deviance, and the connection between psychopathy and corporate crime warrants further academic attention.

Psychopathy is characterized by glib/superficial charm, impression management, a grandiose sense of self-worth, pathological lying, conning/manipulativeness, lack of empathy, lack of guilt or remorse, shallow affect, and failure to accept responsibility. Impression management is indicated by efforts put forth by individuals in order to be viewed by others in a socially desirable or favorable manner. Grandiosity is typified by an excessive need for admiration, arrogance, sense of entitlement, envy, and exploitative tendencies towards others. Pathological lying is marked by a long history of frequent and repeated lying. Manipulativeness is characterized by charm, deceit, risk-taking, and carelessness about rules and conventions. Empathy has been defined as “the ability to detect accurately the emotional information being transmitted by another person”. Guilt “refers to the private feelings of a troubled conscience caused by a personal wrongdoing or by disadvantaging a valued other”. Although they are capable of concealing their emotional deficits, psychopaths are not capable of experiencing or appreciating everyday emotions, demonstrating a shallow affect. Psychopaths tend to rationalize and justify their behavior, often blaming others rather than accepting responsibility for their own actions.

While there has been little research conducted on psychopathy and corporate offending, personality traits such as interpersonal competitiveness, positive extroversion, agreeableness, and neuroticism have emerged as principal personality correlates of white-collar offending. Interpersonal competitiveness is defined as extreme competition in which individuals are motivated to avoid loss and to defeat their rival counterparts. Positive extroversion is characterized by individuals who are talkative and spontaneous. In contrast, the disagreeable businessman is defined by characteristics such as bitterness, having condescending attitudes towards co-workers, and being easily angered or frustrated at unplanned circumstances and inconsistencies with order, rules, and corporate customs. Neuroticism is defined by traits such as anxiety, insecurity, sloppiness, and low self-esteem. While these traits explain corporate offending, other characteristics, such as those typical of psychopathy, can be extended to many of the traits and behaviors of elite criminals. As this thesis demonstrates, corporate behaviors illustrate several traits that are consistent with psychopathy.

CORPORATE CRIME

In contrast to street level offenses, acts of elite deviance may fall beyond the scope of codified criminal law. Furthermore, many acts of elite deviance do not actually violate the law, but still have multiple adverse consequences for society. In fact, elite offenses cause significantly greater harm than street level offenses. For example, corporate and white-collar property crimes cause an estimated $404 billion in damages, while street level property damages are estimated to only cost $20 billion. Still, crimes committed by elites are rarely targeted under the current Crime Control Model.

Elite deviance is characterized by illegal and/or unethical behavior, the maintenance or increase in profit and/or power for economic and political organizations, the open or covert assistance and support from elites who oversee such organizations, and the participation of elite and/or employees that work for people who are wealthy and/or powerful. Elite deviance encompasses a wide variety of behaviors, such as white-collar crime, corporate crime, corporate violence, occupational crime, governmental deviance, crimes of the state, crimes of privilege, profit without honor, and crimes by any other name.

There has been a great deal of definitional ambiguity surrounding the conceptualization of white-collar and corporate crime.  A more recent definition describes white-collar crime as “illegal or unethical acts that violate fiduciary responsibility or public trust, committed by an individual or organization, usually during the course of legitimate occupational activities, by persons of high or respectable social status for personal or organizational gain”.

Corporate crime has been defined as wrongdoing committed by corporate officials for the benefit of their corporation and offenses of the corporation itself. In addition to violations of the existing law, corporations may commit acts that, while legal, have many negative social consequences. For this reason, definitions of corporate crime should include any harmful actions caused by negligent, reckless, or intentional behaviors that are both lawful and illegal. Frank and Lynch (1992, p. 17) defined corporate crime as, “socially injurious and blameworthy acts, legal or illegal, that cause financial, physical, or environmental harm, committed by corporations and businesses against their workers, the general public, the environment, other corporations and businesses, the government, or other countries.”

Examples of Corporate Wrongdoing

In The Corporation: The Pathological Pursuit of Profit and Power, Joel Bakan (2004) discusses several examples of corporate wrongdoing. For instance, American corporations such as Nike, The Gap, Kathy Lee Gifford’s clothing line, and Walmart, often exploit impoverished countries for cheap and easy labor. Twenty-two separate operations take place to produce one Nike shirt. Five steps involve cutting the material, 11 steps involve sewing, and six steps involve attaching labels, hang tags, and packaging. The estimated maximum time to manufacture one shirt was 6.6 minutes, which cost $0.08 in labor and sold for $22.99. Typical sweatshop conditions are harsh and inhumane. Aside from receiving very little pay, employees in these situations are often humiliated and abused. Young girls are forced to take pregnancy tests and are fired if the results are positive. These facilities are usually located in secret, guarded locations and surrounded by barbed wire. Further, employees are often housed in substandard living conditions by the corporations they work for.

In 1938, President Franklin Roosevelt passed the Fair Labor Standards Act, which banned sweatshops, child labor, and industrial homework. However, the act is routinely violated by the garment industry and many sweatshops remain in operation both domestically and abroad. Only 33% of the garment industry is in compliance with the law. According to Charles Kernaghan, director of the National Labor Committee, sixty-five percent of clothing operations in New York City are sweatshops. Many sweatshops in the United States employ illegal immigrants.

Many state statutes label individuals with four convictions as “habitual criminals”. In his study, Sutherland (1949, 1983) used the records of court decisions and administrative commissions regarding 70 of the largest manufacturing, mining, and mercantile corporations in the United States. His analysis focused on violations such as restraint of trade, misrepresentation in advertising, infringement of patent, trademarks and copyrights, unfair labor practices, rebates, financial fraud and violation of trust, violations of war regulations, and other miscellaneous offenses. He found that a total of 980 decisions were made regarding the 70 corporations with an average of 14 decisions for each one.

There are countless other examples of corporate wrongdoing. Robinson and Murphy (2009) discuss several different types of corporate violations, including fraud, deceptive advertising, defective products, and deadly products. Fraud is defined as a form of theft in which the consumer is deprived of their money or property through deceit, trickery, or lies. Fraud occurs across a wide array of industries in a variety of contexts, such as consumer fraud, insurance fraud, credit card and check fraud, cellular phone fraud, health care fraud, Medicare and Medicaid fraud, telemarketing fraud, securities and commodities fraud, and automotive fraud. Quackery is a form of fraud that advertises worthless medical products, such as drugs, devices, and nutritional products.

Institutional Anomie Theory

The cultural element of Institutional Anomie Theory is centered around the notion of the American Dream, which leads to pressure for economic success and anomie. The term anomie, coined by sociologist Émile Durkheim, refers to “a weakening of normative order in society”. The American Dream is defined as “a broad cultural ethos that entails a commitment to the goal of material success, to be pursued by everyone in society, under conditions of open, individual competition”. The American Dream socializes people to seek out economic success and to believe that their chances of achieving economic success are relatively high. This facilitates the ongoing pursuit of rarely-achieved aspirations and material gains. This focus on material success undermines the importance of noneconomic structures, such as those related to education, family, and politics. The universal acceptance and pursuit of the American Dream creates a number of obstacles for people since the reality is that the existing social structure creates economic inequality.

The four basic value foundations of the American Dream are (1) achievement, (2) individualism, (3) universalism, and (4) materialism. Individual self-worth is often evaluated on the basis of achievement. American society emphasizes individualism, as Americans are deeply dedicated to individual autonomy and individual rights. Universalism is described as the universal acceptance of cultural goals and values, as virtually everyone is socialized to achieve and to evaluate themselves and others using this criteria for success. Materialism is a focus on monetary success and material accumulation. All of these factors function in a way that emphasizes material gain while diminishing the importance of legitimate means to attain economic success.

These cultural values, the devaluation of noneconomic institutions, and the portrayal of economic institutions and economic success of utmost importance can contribute to the commission of both street and elite crimes. In the context of corporations, seeking the American Dream, and the values associated with it, can motivate individuals to increase their gains at any costs necessary.

Maximization is defined as “the concomitant utilization of legitimate and illegitimate means to achieve the goals associated with the American Dream”. This form of behavior involves simultaneously obeying the law and violating the law. Maximizers simultaneously engage in both conformity and innovation, such that the boundaries between law-abiding behaviors and criminal behaviors become distorted or disregarded. This is especially likely to occur in corporate settings where there is added pressure to achieve financial success and immoral, harmful legitimate and illegitimate means are normalized. Maximizers view their actions as justifiable. Crime and deviance have become normal in corporations, and maximization is the primary way corporations have achieved greater wealth.

Differential Association Theory

The culture of competition within the subculture of organizations also creates criminogenic conditions in which illegal and amoral acts are incorporated into organizational norms. The competitive struggle for personal gain and advancement is viewed as a positive individual strength rather than as negative or selfish. Any social inequality is viewed as legitimate and fair. The poor are stigmatized and labeled incompetent and lazy, while the rich and successful are admired, creating a strong desire for success and a fear of failure.

PSYCHOPATHY

Psychopathy is fascinating because it is a form of antisocial behavior disguised by a veil of normalcy. Indeed, psychopaths are so proficient in their conning and manipulative qualities that they can easily gain the trust of those who surround them. Seemingly impervious to the common plights of other psychological disturbances, psychopaths are generally well-liked by others and perceived as well-meaning.

Cleckley (1941) formed the foundation for the pathological condition we now know as psychopathy. His work identified several criteria including superficial charm, lack of anxiety, lack of guilt, undependability, dishonesty, egocentricity, failure to learn from punishment, poverty of emotions, and lack of insight into the impact of one‟s behavior on others.

The PCL-R four-factor model of psychopathy identifies several personality characteristics. Among these are conning/manipulativeness, impression management, pathological lying, lack or remorse of guilt, callousness/lack of empathy, stimulation seeking, impulsivity, and criminal versatility. Personality can be defined as “the set of psychological traits and mechanisms within the individual that are organized and relatively enduring and that influence his or her interactions with, and adaptations to, the intrapsychic, physical, and social environments” (Larson & Buss, 2005, p. 4).

Other personality traits relevant to corporate violence that are not identified by the PCL-R are also explored. Among these are desire for control and openness/intellect. Desire for control can be defined as an urge to exercise control over everyday life events. Openness/intellect, sometimes referred to as culture, imagination, or fluid intelligence, is illustrated by an openness to new experiences, intellectual ability, and creativity.

Psychopathy and Street Crime

Those with higher PCL-R scores received reduced sentences and were able to appeal the sentences of higher courts successfully. This demonstrates the ability of psychopaths to continue impression management and manipulative behaviors during the course of criminal proceedings, ultimately deceiving the criminal justice system.

Such capabilities are certainly relevant to extending this analysis to the exploration of psychopathic corporate crime. Psychopathic features such as callousness, grandiosity, and manipulativeness, are relevant to making persuasive arguments and potentially harmful decisions, while features such as impulsivity, irresponsibility, and poor behavioral controls are relevant to poor decision making and performance.

Psychopathy and Elite Crime

Babiak, Neumann, and Hare (2010) explain that our limited knowledge about corporate psychopathy is largely due to the difficulty in obtaining the cooperation of business organizations. They were presented with a unique opportunity to explore psychopathy and its correlates in a sample (N=203) of corporate professionals from various companies.

PCL-R scores were not significantly related to the level of management held by participants. However, the authors noted that of the nine participants who scored 25 or higher, two were vice presidents, two were directors, two were managers or supervisors, and one held some other type of managerial position. Performance appraisals and 360-degree assessments indicated that psychopathy was associated with strong communication skills, strategic thinking skills, creativity/innovation, poor management style, and not being perceived as team oriented.

According to Bakan (2004), corporations were initially conceived as public institutions intended to serve national interests and advance public goods. They are creations of the state, which granted them rights such as legal personhood and limited liability, and are viewed as independent persons. Bakan also argues that corporations are psychopathic and interviewed Dr. Robert Hare, creator of the PCL-R, on the subject. Hare points out several psychopathic qualities of corporations, including irresponsibility, manipulativeness, lack of empathy, lack of guilt or remorse, and superficiality.

Hare explains that corporations are often irresponsible since they attempt to satisfy their goals by putting others at risk. They attempt to manipulate public opinion and display grandiosity by their persistence in establishing their position as “number one” and “the best”. Lack of concern shown for those that they have harmed and could potentially harm demonstrates their lack of empathy. Lack of guilt or remorse is illustrated by the fact that corporations often continue to commit the same violations after being caught and paying fines that are often trivial in comparison to their profits. Hare also argues that corporations are superficial in their relations since they attempt to present themselves in a positive light to the public, which is not representative of what they are in reality. Similar to the way in which a human psychopath uses manipulation and charm to “mask” themselves as normal, corporations present themselves as socially responsible, compassionate, and concerned about others. However, in reality, and as displayed in their behaviors, they are not.

Excerpted from “PSYCHOPATHY AND CORPORATE CRIME A Thesis by ANGELA DAWN PARDUE“, August 2011

Images courtesy Christopher Dombres, William Murphy, Dr. Rex, CountyOfLiars.com

 

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