Hostname: page-component-848d4c4894-pjpqr Total loading time: 0 Render date: 2024-07-05T17:05:40.945Z Has data issue: false hasContentIssue false
  • English
  • Français

Testing an Expected Utility Model of Corporate Deterrence

Published online by Cambridge University Press:  01 July 2024

John Braithwaite  and
Toni Makkai
Get access Rights & Permissions [Opens in a new window]

Abstract

This article reports on the first quantitative perceptual deterrence study of corporate (rather than individual) deterrence. The study is based on interviews with 410 chief executives of small organizations and their officially recorded compliance with regulatory standards. We find partial support for the certainty of detection as a predictor of both self-reported and officially recorded compliance but no support for the certainty or severity of sanctioning. The narrow range of sanctions available in the particular regulatory domain studied (regulation of nursing home quality) has enabled a fuller specification than was possible in previous studies of an expected utility model for all available sanctions. Managers' expected corporate disutility from all sanctions fails to explain compliance. Deterrence does not work significantly more effectively for chief executives (a) of for-profit versus nonprofit organizations, (b) who are owners compared with those who are not owners, (c) who say they think about sanctions more (sanction salience), (d) who may better fit the rational choice model in that they are low on emotionality, (e) who have a weaker belief in the law. Nor is deterrence more effective when compliance costs are low.

Type
Research Article
Information
Law & Society Review , Volume 25 , Issue 1 , 1991 , pp. 7 - 40
Copyright
Copyright © 1991 by The Law and Society Association

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

This project has enjoyed the funding support of the Australian Department of Community Services and Health, the Australian Research Council, the American Bar Foundation, and the Australian National University. The authors are indebted to their colleagues on the Nursing Home Regulation in Action Project—Valerie Braithwaite, Diane Gibson, and David Ermann—for their support and to a number of others for helpful comments—Geoffrey Brennan, Jack Gibbs, Harold Grasmick, Stuart Hills, Jonathan Kelley, Philip Pettit, and Pat Troy. We are also grateful to three unusually helpful reviews and Editor Shari Diamond.

References

AKERS, R. L., KROHN, M. D., LANZA-KADUCE, L., and M., RADOSEVICH (1979) “Social Learning and Deviant Behavior: A Specific Test of a General Theory,” 44 American Sociological Review 635.Google Scholar
ALM, James, McCLELLAND, Gary H. and William D., SCHULZE (1990) “Why Do People Pay Taxes?” (unpublished, Department of Economics, University of Colorado).Google Scholar
ANDERSON, Linda S., CHIRICOS, Theodore G., and Gordon P., WALDO (1977) “Formal and Informal Sanctions: A Comparison of Deterrent Effects,” 25 Social Problems 103.Google Scholar
AUSTRALIAN DEPARTMENT OF COMMUNITY SERVICES AND HEALTH (1988) “New Nursing and Personal Care and Staffing and Funding Arrangements” (Canberra, unpublished paper).Google Scholar
BAILEY, William C., and Ruth P., LOTT (1976) “Crime, Punishment and Personality: An Examination of the Deterrence Question,” 67 Journal of Criminal Law and Criminology 99.Google Scholar
BECKER, Gary S. (1968) “Crime and Punishment: An Economic Approach,” 78 Journal of Political Economy 169.Google Scholar
BISHOP, D. M. (1984) “Legal and Extralegal Barriers to Delinquency: A Panel Analysis,” 22 Criminology 403.Google Scholar
BLOCK, Michael K., NOLD, Frederick C., and Joseph G., SIDAK (1981) “The Deterrent Effect of Antitrust Enforcement,” 89 Journal of Political Economy 429.Google Scholar
BLUMSTEIN, Alfred, Jacqueline, COHEN, and Daniel, NAGIN (eds.) (1978) Deterrence and Incapacitation: Estimating the Effects of Criminal Sanctions on Crime Rates. Washington, DC: National Academy of Sciences.Google Scholar
BRAITHWAITE, John (1989) Crime, Shame and Reintegration. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
BRAITHWAITE, John, BRAITHWAITE, Valerie, GIBSON, Diane, LANDAU, Miriam, and Toni, MAKKAI (1991) The Reliability and Validity of Nursing Home Standards. Canberra: Department of Community Services and Health.Google Scholar
BRAITHWAITE, John, and Brent, FISSE (1990) “On the Plausibility of Corporate Crime Theory,” 2 Advances in Criminological Theory 15.Google Scholar
BRAITHWAITE, John, and Gilbert, GEIS (1982) “On Theory and Action for Corporate Crime Control,” 28 Crime and Delinquency 292.Google Scholar
BRAITHWAITE, John, MAKKAI, Toni, BRAITHWAITE, Valerie, GIBSON, Diane, and David, ERMANN (1990) The Contribution of the Standards Monitoring Process to the Quality of Nursing Home Life: A Preliminary Report. Canberra: Department of Community Services and Health.Google Scholar
BRAITHWAITE, Valerie A. (1987) “The Scale of Emotional Arousability: Bridging the Gap Between the Neuroticism Construct and Its Measurement,” 17 Psychological Medicine 217.Google Scholar
BURKETT, S. R. and E. L., JENSEN (1975) “Conventional Ties, Peer Influence and the Fear of Apprehension: A Study of Adolescent Marijuana Use,” 16 Sociological Quarterly 522.Google Scholar
CARROLL, John (1982) “Committing a Crime: The Offender's Decision,” in Konecni, V. and Ebbesen, E. (eds.), The Criminal Justice System: A Social Psychology Analysis. San Francisco: W. H. Freeman.Google Scholar
COHEN, L. (1978) “Sanction Threats and Violation Behavior: An Inquiry into Perceptual Variation,” in Wellford, C. F. (ed.), Quantitative Studies in Criminology. Beverly Hills, CA: Sage Publications.Google Scholar
COLEMAN, James (1990) Foundations of Social Theory. Cambridge, MA: Belknap Press.Google Scholar
CRESSEY, Donald R. (1988) “The Poverty of Theory in Corporate Crime Research,” 1 Advances in Criminological Theory 31.Google Scholar
CULLEN, Francis T., and Paula J., DUBECK (1985) “The Myth of Corporate Immunity to Deterrence: Ideology and the Creation of the Invincible Criminal,” 49 Federal Probation 3.Google Scholar
EDWARDS, Ward (1961) “Behavioral Decision Theory,” 12 Annual Review of Psychology 473.Google Scholar
EHRLICH, Isaac (1972) “The Deterrent Effect of Criminal Law Enforcement,” 1 Journal of Legal Studies 259.Google Scholar
ETZIONI, Amitai (1988) The Moral Dimension: Toward a New Economics. New York: Free Press.Google Scholar
FISSE, Brent, and John, BRAITHWAITE (1983) The Impact of Publicity on Corporate Offenders. Albany: State University of New York Press.Google Scholar
GALBRAITH, John K. (1969) The New Industrial State. Harmondsworth: Penguin.Google Scholar
GEERKEN, Michael R., and Walter R., GOVE (1975) “Deterrence: Some Theoretical Considerations,” 9 Law & Society Review 498.Google Scholar
GIBBS, Jack P. (1975) Crime, Punishment and Deterrence. New York: Elsevier.Google Scholar
GIBBS, Jack P. (1986) “Deterrence Theory and Research,” in Melton, Gary B. (ed.), The Law as a Behavioral Instrument: Nebraska Symposium on Motivation. Lincoln: University of Nebraska.Google Scholar
GRABOSKY, Peter, and John, BRAITHWAITE (1986) Of Manners Gentle: Enforcement Strategies of Australian Business Regulatory Agencies. Melbourne: Oxford University Press.Google Scholar
GRASMICK, Harold G., and George J., BRYJAK (1980) “The Deterrent Effect of Perceived Severity of Punishment,” 59 Social Forces 471.Google Scholar
GRASMICK, Harold G., and Robert, BURSIK (1990) “Conscience, Significant Others, and Rational Choice: Extending the Deterrence Model,” 24 Law & Society Review 837.Google Scholar
HANUSHEK, Eric A., and John E., JACKSON (1977) Statistical Methods for Social Scientists. Orlando, FL: Academic Press.Google Scholar
HINDELANG, Michael, Travis, HIRSCHI, and Joseph, WEIS (1981) Measuring Delinquency. Beverly Hills, CA: Sage Publications.Google Scholar
JENSEN, Gary F., and Maynard, ERICKSON (1978) “The Social Meaning of Sanctions,” in Krohn, M. and Akers, R. (eds.), Crime, Law and Sanctions: Theoretical Perspectives. Beverly Hills, CA: Sage Publications.Google Scholar
JESILOW, Paul, Gilbert, GEIS, and O'BRIEN, Mary Jane (1986) “Experimental Evidence that Publicity Has No Effect in Suppressing Auto Repair Fraud,” 70 Social Science Research 222.Google Scholar
KAGAN, Robert A., and John T., SCHOLZ (1984) “The Criminology of the Corporation and Regulatory Enforcement Strategies,” in Hawkins, K. and Thomas, J. (eds.), Enforcing Regulation. Boston: Kluwer-Nijhoff.Google Scholar
KAHNEMAN, Daniel, and Amos, TVERSKY (1979) “Prospect Theory: An Analysis of Decision Under Risk,” 47 Econometrica 263.Google Scholar
KINSEY, Karyl A. (1986) “Theories and Models of Tax Cheating,” 18 Criminal Justice Abstracts 403.Google Scholar
KLEPPER, Steven, and NAGIN, Daniel (1989a) “The Deterrent Effect of Perceived Certainty and Severity of Punishment Revisited,” 27 Criminology 721.Google Scholar
KLEPPER, Steven, and NAGIN, Daniel (1989b) “Tax Compliance and Perceptions of the Risk of Detection and Criminal Prosecution,” 23 Law & Society Review 209.Google Scholar
KOETTING, Michael (1980) Nursing Home Organization and Efficiency: Profit Versus Non-Profit. Lexington, MA: Lexington Books.Google Scholar
KRAUT, Robert E. (1976) “Deterrent and Definitional Influences on Shoplifting,” 23 Social Problems 358.Google Scholar
LEWIS-BECK, Michael S., and John R., ALFORD (1980) “Can Government Regulate Safety? The Coal Mine Example,” 74 American Political Science Review 745.Google Scholar
LUNDMAN, Richard J. (1986) “One-Wave Perceptual Deterrence Research: Some Grounds for the Renewed Examination of Cross-sectional Methods,” 23 Journal of Research in Crime and Delinquency 370.Google Scholar
MCDONALD, Tracey T. A., and Philip W., BATES (1989) Commonwealth Nursing Home Outcome Standards: A Practical Guide to the Duty of Care. Canberra: Department of Community Services and Health.Google Scholar
MAKKAI, Toni, and John, BRAITHWAITE (1991) “Criminological Theories and Regulatory Compliance,” 29 Criminology 191.Google Scholar
MASON, Robert, and Lyle D., CALVIN (1978) “A Study of Admitted Income Tax Evasion,” 13 Law & Society Review 73.Google Scholar
MEIER, Robert F. (1982) “Jurisdictional Differences in Deterring Marijuana Use,” 12 Journal of Drug Issues 51.Google Scholar
MEIER, Robert F., and Weldon T., JOHNSON (1977) “Deterrence as Social Control: The Legal and Extra-legal Production of Conformity,” 42 American Sociological Review 292.CrossRefGoogle Scholar
MINOR, William W. (1977) “A Deterrence-Control Theory of Crime,” in Meier, R. (ed.), Theory in Criminology: Contemporary Views. Beverly Hills, CA: Sage Publications.Google Scholar
MOORE, Charles A. (1987) “Taming the Giant Corporations: Some Cautionary Remarks on the Deterrability of Corporate Crime,” 33 Crime and Delinquency 379.Google Scholar
PATERNOSTER, Raymond (1989) “Decisions to Participate in and Desist from Four Types of Common Delinquency: Deterrence and the Rational Choice Perspective,” 23 Law & Society Review 7.Google Scholar
PATERNOSTER, Raymond, and Leeann, IOVANNI (1986) “The Deterrent Threat of Perceived Severity: A Re-examination,” 64 Social Forces 751.Google Scholar
PATERNOSTER, Raymond, SALTZMAN, Linda, WALDO, Gordon, and Theodore, CHIRICOS (1983a) “Estimating Perceptual Stability and Deterrent Effects: The Role of Perceived Legal Punishment in the Inhibition of Criminal Involvement,” 74 Journal of Criminal Law and Criminology 270.Google Scholar
PATERNOSTER, Raymond, SALTZMAN, Linda, WALDO, Gordon, and Theodore, CHIRICOS (1983b) “Perceived Risk and Social Control: Do Sanctions Really Deter?” 17 Law & Society Review 457.Google Scholar
PILIAVIN, Irving, GARTNER, Rosemary, THORNTON, Craig, and Ross C., MATSUEDA (1986) “Crime, Deterrence and Rational Choice,” 51 American Sociological Review 101.Google Scholar
ROTH, Jeffrey A., SCHOLZ, John T., and Anne Dryden, WITTE (1989) Tax Compliance: An Agenda for Research, Vols 1 and 2. Philadelphia: University of Pennsylvania Press.CrossRefGoogle Scholar
SILBERMAN, Matthew (1976) “Toward a Theory of Criminal Deterrence,” 41 American Sociological Review 442.Google Scholar
SIMPSON, Sally (1990) “Corporate Crime Deterrence and Corporate Control Policies: Views from the Inside” (delivered to Edwin Sutherland Conference on White-Collar Crime, Indiana University).Google Scholar
SMITH, Kent (1990) “Integrating Three Perspectives on Noncompliance: A Sequential Decision Model,” 17 Criminal Justice and Behavior 350.Google Scholar
SPICER, M. W. and S. B., LUNDSTEDT (1976) “Understanding Tax Evasion,” 31 Public Finance 295.Google Scholar
STALANS, Loretta J., SMITH, Kent W., and Karyl A., KINSEY (1989) “When Do We Think About Detection? Structural Opportunity and Taxpaying Behavior.” 14 Law and Social Inquiry 481.Google Scholar
TABACHNICK, Barbara G., and Linda S., FIDELL (1989) Using Multivariate Statistics. 2d ed. New York: Harper & Row.Google Scholar
TEEVAN, James Jr. (1976a) “Deterrent Effects of Punishment: Subject Measures Continued,” 18 Canadian Journal of Corrections 152.Google Scholar
TEEVAN, James Jr. (1976b) “Subjective Perceptions of Deterrence (Continued),” 13 Journal of Research in Crime and Delinquency 155.Google Scholar
TEEVAN, James Jr. (1976c) “Deterrent Effects of Punishment for Breaking and Entering and Theft,” in Law Reform Commission of Canada, Fear of Punishment. Ottawa: Law Reform Commission.Google Scholar
TITTLE, Charles R. (1980) Sanctions and Social Deviance. New York: Praeger.Google Scholar
TOBY, Jackson (1964) “Is Punishment Necessary?” 55 Journal of Criminal Law, Criminology and Police Science 332.Google Scholar
VISCUSI, W. Kip, and Richard J., ZECKHAUSER (1979) “Optimal Standards with Incomplete Enforcement,” 27 Public Policy 437.Google Scholar
WAERNERYD, K. E. and B., WALERUD (1982) “Taxes and Economic Behavior—Some Interview Data on Tax Evasion in Sweden,” 2 Journal of Economic Psychology 187.Google Scholar
WALDO, Gordon P., and Theodore G., CHIRICOS (1972) “Perceived Penal Sanction and Self-reported Criminality: A Neglected Approach to Deterrence Research,” 19 Social Problems 522.Google Scholar
WILLIAMS, Frank P. III (1985) “Deterrence and Social Control: Rethinking the Relationship,” 13 Journal of Criminal Justice 141.Google Scholar
WILLIAMS, Kirk, and Richard, HAWKINS (1989) “The Meaning of Arrest for Wife Assault,” 27 Criminology 163.Google Scholar
ZIMRING, Franklin E., and Gordon J., HAWKINS (1973) Deterrence: The Legal Threat in Crime Control. Chicago: University of Chicago Press.Google Scholar