The Social Embeddedness of Deterrence and Compliance - Business Reactions to Unsanctioned Offenses of Competitors
|Starts:||16:00 3 Nov 2014|
|Ends:||17:00 3 Nov 2014|
|What is it:||Lecture|
|Organiser:||School of Law|
|Who is it for:||University staff, Adults, Alumni, Current University students, General public|
|Speaker:||Dr Judith van Erp|
Business compliance behaviour is often understood as a reaction to deterrence: an equation of sanction severity and detection probability. Although deterrence theories have been criticized for their unrealistic assumptions of rational decision-making, many studies over the last 20 years demonstrate that deterrence can be a fruitful perspective to understand business behaviour if it takes into account that business perceptions of sanctions are socially embedded rather than purely individualistic.
This presentation first gives an overview of research into the social embeddedness of sanctions, which has demonstrated that extra-legal sanctions by stakeholders, such as consumers, clients, private auditors, or communities, can increase the impact of public enforcement. The threat of reputational damage is often a more powerful deterrent than public fines. Enforcement agencies therefore increasingly make use of ‘naming and shaming’ of offending businesses. However, this strategy is not always successful against powerful firms with the capacity to resist attacks to their reputation. This talk will therefore discuss the possibilities and caveats of public shaming of corporations.
In comparison to sanction severity, the social embeddedness of business perceptions of detection probability is less researched. It has been assumed that business perceptions of detection rates are influenced by their knowledge of sanctions, or absence of sanctions, against peers. In times of budget austerity and decreasing enforcement capacity, it is likely that business will be aware that offenses by competitors sometimes remain undetected. This raises the question whether businesses are less willing to comply when they become aware that offenders are not punished. The second part of this presentation discusses new research results on the question how businesses react to the observation of unsanctioned offenses of competitors. Based on qualitative research among small and medium size agricultural businesses with regard to their tax compliance, this study found no indications that tax offences and tax compliance are influenced by undetected offences of competitors, unless these offences directly damage the interests of businesses.
Dr Judith van Erp
Role: Associate Professor in Criminology
Organisation: Erasmus School of Law, Rotterdam
Biography: Research Profile
Travel and Contact Information
Lecture Theatre C