Crime and punishment in reference to marketing
Crime and punishment in reference to marketing
Introduction
Crime has always been a subject of serious emotions because of conflicting ideologies. Economists have explained it as a detailed reflection of individual choices and the equilibrating forces within the markets. The persistence of different illegal activities in human history and some of the apparent regularities have attracted the attention of different economists globally. The crimes and the demand to be protected from different crimes are motivated by property accumulation which is presented by a penetration analysis of various factors which are responsible for the differences in the real magnifiers of severity and probability of sanctions for various crimes (Sowmyya, p. 197). In the late sixties, economists managed to reconnect with the subject of crime and punishment in marketing using the modern analysis of economics. The process of marketing is affected by various forms of crimes. These criminal activities slow down the process. When there is a crime in a business, the consequences are manifested within the public sector. One of the approaches through which crime is manifested is corruption. Some of the forms of corruption experienced in the public sector are embezzlement of funds, bribery, illicit enrichment, abuse of functions through favouritism and nepotism or trade influences. The legal articulation of corrupt practices is very complex. A good example is the UNCAC article 15, which defines bribery within the public sector as a promise, an offering or a gift given to a public official indirectly or directly for undue advantages. The offering is given with the intention of ensuring the official acts or gets to refrain from exercising or acting on his or her official duties. Even though this definition is quite challenging to digest, the essence of the crime, money or other objects of value are exchanged for benefits which could be in the form of economic or political actors. Such a criminal activity results in the circumnavigation of lawful protocols through the auctioning of economic and political powers to the best bidder. This is the same for property misappropriation and embezzlement. This two are defined by article 17 beyond the legal frameworks (Aghazada et al., p. 12). The meaning, however, is that an individual is entrusted with something of value like investments, property and funds which are taken from them, or they are routed to a third party at the expense of another individual. Such an offence is applicable to situations like patronage, nepotism, cronyism or extortion. Such crimes are destructive because they do not have transparency, accountably and are not supported by the law. The paper focuses on the aspect of corruption which is a crime that is punishable by the law in the marketing process, and the solutions to the challenge of corruption.
Causes of corruption
One of the causes is economical. In the public and private sectors, personal gains are regarded as the common forms of corruption. Where corruption occurred, deregulation and liberalisation have resulted in a market which is characterised by very intense competition (Riaz et al., p.396). That causes companies to engage in corruption as the main approach to maximisation the efficiencies of operation. It also makes it challenging for the companies to secure a competitive advantage over the other companies leading to the creation of snowball effects within the industries. Promoting the other companies to participate in such practices is an approach to maintaining relevance and effectiveness within the markets. Companies that refuse to pay bribes are always excluded from the markets because reduced competition results in high costs, goods and services which are of poor quality and harm the customers in the long run.
The other cause of corruption in the public and private sectors is rationalisation and individual causes. Individuals tend to engage in rationalisation approaches as a means of justifying their unethical behaviours. There are individuals who cheat with the objective of gaining advantages when they can rationalise their behaviours or when they feel good about their wrong behaviours (Sun, p.145). Some of the factors which influence rationalisation in the public and private sectors are the size of the company, the nature of the company as a foreign or domestic, diversity at work, gender and length of tenure, which affects the rationalisation of individuals within the private sectors. One of the approaches to rationalisation is the mentality that everyone is engaging in corrupt behaviours. In such a case, rationalisation manifests in various situations. Some companies have normalised the fact that no sanctions are imposed on individuals who engage in corrupt practices. Another rationale is that everyone engages in corrupt activities, and that justifies corrupt behaviours (Mujtaba et al. p. 45). Some of the reasons given by companies for engaging in corruption is that the competitors do not understand the approaches to the business. When the individuals perceive that competitors engage in corrupt practices, they can justify it by undertaking comparative actions with a rationale of ensuring the company and the well-being of an individual are secured.
The other cause of corruption is corporate culture. The individual and economic causes of corruption could result in the development of a corporate culture of corruption. Therefore a culture of corruption is an outcome and a reason for more corrupt activities. Such a culture normalises through processes like institutionalisation, which involves the embedding of corrupt approaches in the processes and the structure of the company (Wyatt et al., p. 352). It also involves rationalisation, which incorporates various self-serving ideologies which justify corrupt practices. Additionally, it involves the socialisation process where the new employees are socialised to norms and systems which tolerate or allow for corrupt practices. Corporate cultures of corruption always result in factors like competition, corruption and growth orientation. It also results in a complicated structure of leadership which is characterised by greater levels of autonomy and discretion, the absence of ethics, accountability and transparency in an organisation. In an environment like this, the processes and rules seeking to ensure integrity are often avoided selectively. Combating and replacing such cultures requires greater attention to the practice. An organisation can evade such a culture through the incorporation of strong ethical values which guide stakeholders and their interactions.
Effects of corruption
One of the impacts of corruption in the process of marketing is that it results in unfair competition. Organisations which offer bribes to customers gain unfair advantages over their competitors. This is because the services of the other companies may not be willing, or they may not be able to bribe (Chen et al., p. 187). As a result, corruption will undermine the competition because the companies that failed to pay for the bribes could be excluded from the markets.
The other issue is inflated costs of products. Corruption results in the decline of competition. That results in significantly higher costs and a poor quality of services and goods. In the long run, it harms the consumers (Sowmyya, p. 197). A good example is when an organisation pays bribes to sell its products. Such a company may not regard it as a necessary process to invest in any innovations, training of staff on new technologies, among other activities that could improve the quality and productivity of the services and the products.
Also, corruption affects society. It often has adverse impacts on the rights of the people because those who have power tend to influence the decision of the weak in the society (Sowmyya, p. 197). It causes communities to tend to waste their resources by investing in poor quality infrastructure and services. It also erodes the trust that individuals have in the private and public sectors because individuals act depending on their interests.
Solutions to corruption
Since corruption is a major issue in the public and private sectors, different states respond differently to this issue. One of the approaches which are commonly used is the adoption of norms that advocate for criminal anti-corruption. This goes hand in hand with the enforcement of the norms via incentives and actions. There are national and regional frameworks which establish crimes such as embezzlement and bribery and other offences which promote the concealing of such crimes, obstructing justice and laundering of the proceeds. In public procurement, corruption could be addressed by the exclusion of the contractors who are corrupt from accessing the advertised contracts from the government or other service providers (Ahmed et al., p.102). This is referred o as blacklisting. The method always prevents the contractors who are convicted because of particular breaches of the ethics and laws from bidding contracts which have been marketed by the government institutions for a certain period of time.
In the private sector of business, corruption is addressed through corporate liability. Previously corruption was outside the criminal laws, which played more attention to the personal notions and guilt of the culprit or the blame. Those enforcing anti-corruption targeted officials who participated in the collection of bribes or embezzlement of public funds. It also targeted individuals who offered bribes to a lower degree. Over the years, the state has passed laws which seek to ensure companies are compliant with the international laws of anti-corruption. The liability of legal corporations is called corporate liability. It is a vital feature of the global war against corrupt practices in various markets (Sartor et al., p. 349). Corporate liability was introduced due to the fact that the traditional legal tools like the individual criminal obligations had proven to be insufficient. Decentralisation of the available corporate structures and other complex processes of decision making made it challenging to identify and punish the criminals. In many cases of corporate corruption, the leadership of a given organisation would play a vital role in case they fail to adequately supervise their employees or incentivise the habits of their workers, and that results in an offence. Most large corporations have corporate cultures that wrong incentive behaviours by junior employees but ignore the senior employees. That makes it challenging to press charges against the top management (Wu et al., p, 408). The standards of corporate liability could be subjective or objective. The objective liability involves all the wrongdoings which are committed by employees while on duty. When an employee commits a given crime, the corporation is considered liable. The objective system of liability encourages the implementation of various preventive policies which discourage individuals from reporting wrongs or corporations with others during the process of investigation. Subjective liability, on the other hand, imposes a duty to organisations with the objective of preventing any criminal activities. This is achieved through employee education and the implementation of internal controls within the activities of the company. Such systems tend to excuse the employees who comply with the requirements as defined by the law. The systems contain risks because companies always focus on the elements which are listed in the law as the pillar of defining effective systems of compliance.
Another approach to corruption is debarment and suspension. The policies of debarment always exclude particular suppliers or contractors from contracts which are more profitable because of any unethical practices. The determination of debarments involves approaches such as rules which are based on an automatic system of debarment (Sartor et al., p. 349). This approach focuses more on the current responsibilities. Internationally, companies used the system of debarment and suspension from the World Bank. Such systems tend to sanction all the corrupt officials, any worker who engages in coercive, obstructive and collusive practices, among others. The different forms of debarment and suspension are the fixed period debarment without any form of conditions for release, conditional forms of non-debarment, a public letter of reprimand and restitution. The World Bank always makes an assessment of the mitigating and aggravating factors during the determination of the best sanction which can be applied in an organisation. The threat of imprisonment is limited to specific persons in society. Debarment and suspension could be compared to the deterrent of companies that depend on contracts which are advertised by government institutions. Companies also need to dismiss their employees as one of the conditions for settling the employees (Sowmyya, p. 197). The approach is an effective deterrent for managers and other senior stags who experience challenges in getting a comparable alternative to employment. The managers of an organisation and the employees always have to understand the fact that bribery is detrimental to every stakeholder. It is also an offence that can result in the termination of a person’s employment.
The best approach to address the crime of corruption
The best approach to corruption is a collective action between the private and public sectors through partnerships. This is because a global regime that is based on the application of agent and principal relationships is inefficient. This principle requires that parent companies remain responsible for any actions of their subsidiaries, intermediaries and third parties (Sowmyya, p. 197). The strategy is vital in the reduction of bribes within the international businesses as well as the global chains of supply. It is known for enhancing the probability of various multinational companies being sanctioned for corruption in a single country because they may forfeit the opportunities for business in other countries. This is due to the fact that they may be blacklisted and hence unable to access public tenders. The strategy could be inefficient when corruption is systematic. This is common when corrupt activities have spread significantly and embedded the public and private sectors in their marketing processes. It could also apply when corrupt activities are organised by governments. This may cause companies to withdraw because of limited options from particular markets of unintended policies and the consequence of leaving the markets to other scrupulous players. The markets, which are characterised by systematic corporations, face the challenge of a prisons dilemma (Sartor et al., p. 349). This challenge causes companies to fear any form of competitive advantage in case of refusal to participate in corrupt practices like the loss of contracts. Such is also described as a challenge of collective action, which results in a significant increase in collective costs.
The response to this challenge involves agreements which are similar to multiparty contracts. Those are agreements between stakeholders who commit themselves to some new normative balances. The approach involved stakeholders who expected their peers to abide by and comply with the available rules and regulations. Such a collective and coordinated approach is called the collective action initiative. The actions of collective action take the form of short to long-term initiatives with various forms of external enforcement. Companies which participate in such initiatives could pursue their objectives efficiently in a concentrated and joint effort instead of individually. Initiatives of collective action could be developed through the partnerships between private and public sectors (Sowmyya, p. 197). A good example is the collective approaches used to address the single available challenges like facilitation of payment, advocacy for a regulated and improved environment of business or a program that ensures action is taken against individuals who engaged in criminal activities. Today, the companies of the world are really adopting the collective approaches to anticorruption upon collaboration with the existing public sectors, academics and civil societies (Sowmyya, p. 197). Such collective approaches have a significant potential to reduce corrupt activities in society for various reasons. The first reason is that corruption is highly complex, and it cannot be addressed by the companies of government regulations which act independently. While the private sector is the challenge, it forms a vital component of the solutions towards addressing the aspect of corruption in society. While companies are the sources of corrupt funds, they are also significant victims of corrupt events. As a result, they have a share in participating in the process of reform. Also, the government can benefit from the available responses and expertise which is brought by the ethics of business to fight against corrupt events (Sartor et al., p. 349). A collective action ensures companies of all sizes develop into meaningful change agents of change related to policies and procedures of corruption as well as the stimulation efforts within the public and the private sectors, which seek to decrease corruption through engagement ineffective reforms.
The collective actions also involved the private and the government sectors. Collaborations are the partnerships between the public and the private sectors. One of the examples of collective action is the intervention which was led by the maritime network of anticorruption in Argentina alongside other business associations that operate within the maritime sector of transportation. Such interventions seek to reduce corruption when goods are inspected at the borders. The inspections seek to ensure that the approaches to transportation were inadequacy (Sartor et al., p. 349). This approach was effective because it ensured that the available transport approaches were effective and could not contaminate the agricultural products. This action resulted in the birth of an illicit business which was worth $ 31 million annually. Some of the factors which resulted in this are unsupervised discretions which was enjoyed by different inspectors at the port, costs derived from various forms of delay which was caused by the disapproval of warehouses and the absence of transparency or regulation of the process of inspection. Such an environment allowed for bribery which was paid by ships that were in a bad condition for the avoidance of unjustified and costly delays (Sowmyya, p. 197). With time the level of systematic corruption in the inspections affected the companies and the companies had to include bribery in their business costs. This resulted in extremely higher product costs as well as legal risks which discouraged the foreign organisations from trading within the country.
To address the issue of corruption the authorities from marine networks had to engage every stakeholder among them the government in a process which involved designing the process of investigation. The discussions evaluated commercial, financial and legal pros and cons experienced by every stakeholder and the impacts of a level playing field. The stakeholders in agreement with the government chose to have a regulatory framework (Sartor et al., p. 349). This collective action continued to a point of reform implementation where the operative personnel were trained and stakeholders from private and public sectors met. The bribes reduced to zero in the businesses and the incidents of corruption were sanctioned and reported with immediate effect.
Conclusion
In conclusion, the crimes which take place in marketing affect the businesses significantly. One of the manifestations of criminal activities is corruption within the public and private sectors. It is therefore important to understand the causes and effects of criminal activities because this is the pillar of having effective solutions. Corruption involves using gifts, offerings and other tokens to influence the decision of an individual. It results in favoritism and unfair competition within the market sectors. Organisations report corruption in form of bribery or embezzlement of funds. Even though solutions such as having criminal laws to punish the corrupt leaders are effective there are gaps such as having the laws apply to junior officials and excluding the senior officials. Such a gap could be addressed through a collaborative effort between stakeholders in the private and the public sectors. A collaborative effort will ensure the two sectors come together and develop systems which will help identify corrupt officials and punish them for their offences. A good example of the effectiveness of this approach is its application in the marine networks of Argentina.
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