The Shadow of Effectiveness: An Investigation of Illegal Corporate Activity

Abstract

183 p.Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 1981.This dissertation treats, conceptually and empirically, several forms of corporate illegality and their antecedent conditions. Specifically, the violation types are (a) illegal mergers and acquisitions, (b) anti-competitive trust behavior, (c) misrepresentation, (d) pollution, and (e) illegal domestic and foreign payments (bribery). Included in the aims of this treatise are: (1) Identification of a framework of predictive factors for each type of offense. (Note this is the alternative to the null hypothesis that these offenses are random occurrences.) (2) Determination of differences in antecedent conditions associated with the statutory/regulatory violations. (3) A comprehensive organizational science contribution to the body of literature on businesses running afoul of the law. (4) An integration of theory and empiricism extant in the varied disciplines of organization theory, sociology, criminology, economics, business policy, and law, which have overlapping interests in this area. (5) Addition of a sociological examination of dysfunction heretofore lacking in the organizational literature. (6) Description and implementation of an approach to organizational effectiveness research that closely parallels what Perrow (1977) has labelled "gross malfunctioning analysis." This is not intended to be a substitute for current comprehensive models of effectiveness, but a small-scale (in terms of the scope of the dependent variable) example of future conceptual and methodological possibilities.Two null and six alternative hypotheses were generated from this perspective and tested with the five-category violator sample, with two additional comparison groups. One of the latter consisted entirely of uncited firms, the other only cited firms but in years in which the company was not cited. (0) Violations will tend to be randomly distributed. (Disconfirmed.) (0') Violations will tend to be distributed among firms and industries in accordance with their citation (selection) potential. (Significant, but accounts for little variance, except for pollution subsample.) (1) Violations will occur as a function of the moral character or value system of the firm's management. (Mildly supported for misrepresentation and bribery subsamples only.) (2) Violations will occur in concentration in specific industries, owing to patterns of association. (Supported with qualifications.) (3) Violations of newly enacted or enforced laws will tend to be more randomly distributed than those of longer standing. (Moderately supported.) (4) Violations will tend to occur in response to a perceived unfavorable shift or trend in the economic performance or position of the firm. (Very little support.) (5) Violations will tend to be of a type that is pertinent to the solution of the perceived problem. (Marginally supported.) (6) The patterns of factors related to illegal activity is invariant with regard to the type of said activity. Stated another way, the same configuration of conditions accounts for all possible types of violations. (Strongly disconfirmed.)Overall, it can be concluded that behavioral, particularly organizational, science has much to offer and gain from the study of illegal corporate behavior, to paraphrase Payne's (1980) comments on the analysis of ethics. Furthermore, the obvious obstacles inherent in gaining access to business organizations for the purpose of obtrusive measurements need not preclude investigation of the activity. Certainly this study can be no more than a beginning to such a pursuit, one that it is hoped sets a true course toward understanding.U of I OnlyRestricted to the U of I community idenfinitely during batch ingest of legacy ETD