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Corporate (White-Collar) Crime: Definition, Scope and a Neutralization Theory Explanation
Introduction
White-collar crime, frequently labelled corporate crime when committed by organisations or their officers, poses a significant threat to economic integrity, public trust and social welfare. Unlike direct, violent crime, corporate wrongdoing often hides behind legitimate business activity, making detection and prosecution difficult. This paper defines corporate/white-collar crime, summarises its scope, and applies one criminological theory, neutralization theory, to explain how individuals and organisations justify and normalise illegal conduct. Neutralization theory offers a useful interpretive lens because corporate offending often depends on cognitive and social processes that allow actors to dissociate their self-image from the harmful outcomes of their actions.
Defining Corporate and White-Collar Crime
Classic definitions of white-collar crime emphasise offences committed by persons of respectability and high social status in the course of their occupation (Sutherland, as discussed in later literature). Contemporary scholarship distinguishes between individual occupational offences and corporate crimes, the latter involving organisational structures and routines that create or conceal illegality (van Erp, 2018). Corporate crime covers a broad range of harmful behaviours including fraud, bribery and corruption, tax evasion, price-fixing, environmental violations, and the facilitation of money laundering through professional enablers (OECD, 2021). Crucially, corporate crime differs from street crime in scale and social impact: the financial, environmental and public health harms can be extensive and diffuse, often affecting large numbers of people and public institutions.
Scope of the Problem
Measuring the full scope of corporate crime is inherently challenging. Many offences remain undiscovered or are resolved through administrative sanctions rather than criminal prosecution (St-Georges et al., 2023). Nevertheless, available evidence demonstrates the problem is substantial and growing in complexity. Large-scale leaks and scandals, such as the Pandora Papers and corporate tax avoidance schemes, highlight how corporate structures and cross-border financial systems enable wrongdoing at scale (Evertsson, 2020). International organisations and scholars report persistent gaps in enforcement and prosecution, and they document the role of professional enablers in facilitating concealment (OECD, 2021). Empirical studies also show public tolerance for white-collar wrongdoing can be higher than for other crime types, complicating political will for rigorous enforcement (St-Georges et al., 2023). The economic costs are large: corporate fraud and financial crime contribute to lost revenue, misallocated capital, and eroded confidence in markets, while environmental and safety breaches can cause long-term societal damage.
Neutralization Theory: Theoretical Perspective
Neutralization theory originated with Sykes and Matza (1957) to explain how juvenile offenders employ rationalisations to neutralise the moral guilt associated with delinquent acts. The central claim is that offenders draw on culturally available justifications that permit them to drift between conventional behaviour and rule-breaking without experiencing a sustained identity rupture. Classic neutralizations include denial of responsibility, denial of injury, denial of the victim, condemnation of the condemners, and appeal to higher loyalties. Scholars have since extended and adapted the framework to adult, occupational and corporate contexts, demonstrating its applicability to sophisticated forms of offending (Stadler, 2012; Schoultz, 2019).
Applying neutralization theory to corporate crime involves identifying how executives, managers and organisations reframe illegal conduct so that it appears necessary, harmless, or justified in pursuit of organisational goals. This perspective emphasises cognitive and cultural processes rather than individual pathology, thus fitting corporate settings where group norms and institutional pressures shape conduct (van Onna, 2020). Recent empirical work shows that corporate actors often employ language and narratives that mirror neutralization techniques; for instance, public statements by firm leaders frequently deny responsibility, minimise harm, or invoke competitive necessity (Evertsson, 2020).
Key Concepts of Neutralization Theory and Their Corporate Application
Neutralization theory’s core concepts are straightforward but powerful in organisational analysis. Denial of responsibility occurs when actors attribute wrongdoing to external pressures or systemic constraints, arguing that they had little choice. In corporate settings, managers may claim that market pressure, shareholder expectations, or unrealistic targets forced them into questionable accounting or regulatory evasion. Denial of injury treats harmful acts as technically illegal but not genuinely harmful; for example, executives might justify tax avoidance by arguing the firm still contributes jobs and investment. Denial of the victim reframes the harmed party as undeserving or as part of a corrupt system; corporations involved in price-fixing sometimes characterise consumers as sophisticated actors who should protect themselves. Condemnation of the condemners shifts blame onto regulators or competitors, alleging hypocrisy or selective enforcement. Finally, appeal to higher loyalties reframes illegal acts as serving a greater good, saving jobs, protecting shareholder value, or maintaining national competitiveness.
Scholars have also documented corporate-specific neutralizations. Stadler (2012) and Schoultz (2019) developed typologies that incorporate notions such as “ledgering” (balancing wrongdoing against corporate benefits) and “organizational loyalty” (placing the firm’s survival above abstract legal norms). These adaptations show how neutralization techniques operate not only at the individual level but also through organisational discourse, policies and incentives.
Applying Neutralization Theory to Corporate Crime
Neutralization theory helps make sense of several widely observed patterns in corporate crime. First, it explains the frequent mismatch between actors’ self-concept and their behaviour: managers who view themselves as law-abiding may still participate in harm because neutralizations reduce cognitive dissonance. For example, in high-profile accounting scandals, executives often described complex financial manoeuvres as legitimate risk management or necessary to meet market expectations (Evertsson, 2020). Second, the theory highlights the role of organisational culture in normalising wrongdoing. When a firm cultivates aggressive targets, rewards short-term performance and discourages dissent, neutralization narratives find fertile ground. Van Onna (2020) shows that company cultures and professional networks can normalise evasive practices, allowing wrongdoing to be routinised.
Third, neutralization theory draws attention to the social and communicative dimension of corporate crime. Public relations responses and internal memos often enact neutralizations designed to shape stakeholder perceptions. Media analyses reveal that firms accused of corruption or tax avoidance commonly deploy denial and minimisation strategies to retain legitimacy (Schoultz, 2019). Understanding these rhetorical moves is essential for regulators and investigators because they signal the mechanisms through which harm is justified and hidden.
Finally, the theory suggests intervention points. If neutralizations are socially produced and maintained, then altering organisational narratives and incentive structures can reduce offending. Corporate compliance programs that foreground ethical reasoning, encourage whistleblowing, and de-link remuneration from short-term gains challenge the neutralizing narratives of necessity and loyalty to the firm. OECD guidance on internal controls and the recent emphasis on holding professional enablers to account reflects this policy logic: reducing the tools and narratives available for neutralization undermines the social scaffolding of corporate crime (OECD, 2021).
