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Title:
Why they do it : inside the mind of the white-collar criminal
Author(s):
Soltes, Eugene,
ISBN/ISSN:
9781610395366 (hardback)

1610395360 (hardback)
Personal Author:
Physical Description:
viii, 448 pages : illustrations ; 25 cm
Contents:
Prologue: Managing in the gray -- The struggle to criminalize. "Not...bucket-shop operators, dead-beats, and fly-by-night swindlers" : pillars of the community ; "Guys...don't drop out of windows for no reason" : creating the white-collar criminal -- Nature or nurture? Reasoning or intuition?. "Inherently inferior organisms" : bad people making bad decisions ; "I thought it was all going to pass" : a press release with consequences ; "If you don't take it then you will regret it forever" : the triumph of reason ; "I never once thought of the costs versus rewards" : intuitive decisions ; "I never felt that I was doing anything wrong" : overlooking harm ; "If there was something wrong with this transaction, wouldn't people have told me?" : the difficulty of being good -- The business of malfeasance. "You can't make the argument that the public was harmed by anything I did" : misleading disclosure ; "Unfortunately, the world is not black and white" : financial reporting fraud ; "You go from just being on top of the world" : insider trading ; "I thought we were freakin' geniuses" : deceptive financial structures ; "You couldn't stop because you would wreck everything" : the Ponzi scheme ; "When I look back, it wasn't as if I couldn't have said no" : Bernie Madoff -- Conclusion: Toward greater humility.
Abstract:
"Rarely does a week go by without a well-known executive being indicted for engaging in a white-collar crime. Perplexed as to what drives successful, wealthy people to risk it all, Harvard Business School professor Eugene Soltes took a remarkable journey deep into the minds of these white-collar criminals, spending seven years in the company of the men behind the largest corporate crimes in history-from the financial fraudsters of Enron, to the embezzlers at Tyco, to the Ponzi schemers Bernie Madoff and Allen Stanford. Drawing on intimate details from personal visits, letters, and phone calls with these former executives, as well as psychological, sociological, and historical research, Why They Do It is a breakthrough look at the dark side of the business world. Soltes refutes popular but simplistic explanations of why seemingly successful executives engage in crime. White-collar criminals, he shows, are not merely driven by excessive greed or hubris, nor do they usually carefully calculate the costs and benefits before breaking the law and see it's worth the risk. Instead, he shows that most of these executives make decisions the way we all do-on the basis of their intuitions and gut feelings. The trouble is, these gut feelings are often poorly suited for the modern business world. Based on extensive interaction with nearly fifty former executives-many of whom have never spoken about their crimes-Soltes provides insights into why some saw the immediate effects of misconduct as positive, why executives often don't feel the emotions (angst, guilt, shame) most people would expect, and how acceptable norms in the business community can differ from those of the broader society"-- Provided by publisher.

"Perplexed as to why people who seemingly had it all would risk it all just to acquire more, Eugene Soltes began an investigation into the mind of the corporate criminal. His journey into this netherworld included intense and lengthy personal interactions with the famous (such as Bernie Madoff, executives from Enron, Worldcom, Tyco, and McKinsey) as well as those who are lesser known--all of whom traded places of privilege for prison and disgrace. Based on intimate details from personal visits, interviews, letters and phone calls and fascinating psychological, sociological and historical insight, Why They Do It is a breakthrough look at a modern phenomenon. Soltes pushes beyond the explanation that these criminals were driven by psychological aberration, overconfidence, or excessive greed and ambition. Nor did they rationally calculate the costs and benefits of their crimes. Instead, these people were working in a "grey zone"--stepping over the line, often without careful calculation, letting their intuition and gut feel for what is right and wrong elude them. Based on innovative research and extended contact with close to 50 former executives--many of whom have never spoken about their crimes--Soltes provides insights such as why some saw the immediate effects of misconduct as positive; why executives often don't feel the emotions--angst, guilt, shame--most people would expect; and how acceptable norms in the business community can differ from those of the broader society. No one book has provided a complete picture of this phenomenon of the white-collar criminal. Why They Do It is an original, provocative, and compelling analysis of a complex disturbing trend that will, with the ever-increasing globalization of business, continue to worsen"-- Provided by publisher.
Bibliography Note:
Includes bibliographical references (pages 397-433) and index.
Pub Date:
PublicAffairs, [2016]
Holds:

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Summary

Summary

From the financial fraudsters of Enron, to the embezzlers at Tyco, to the insider traders at McKinsey, to the Ponzi schemer Bernie Madoff, the failings of corporate titans are regular fixtures in the news. But what drives wealthy and powerful people to white-collar crime? Harvard Business School professor Eugene Soltes draws from extensive personal interaction and correspondence with nearly fifty former executives as well as the latest research in psychology, criminology, and economics to investigate how once-celebrated executives become white-collar criminals. The product of seven years in the company of the men behind the largest corporate crimes in history, Why They Do It is a breakthrough look at the dark side of the business world.

Soltes reveals how the usual explanations fail to tell the whole story of why many seemingly successful people go over the line. White-collar criminals are not merely driven by excessive greed or hubris, nor do they usually carefully calculate costs and benefits before breaking the law. Instead, Soltes shows that most of the executives who committed crimes made decisions the way we all do--on the basis of their intuitions and gut feelings. The trouble is that these gut feelings are often poorly suited for the modern business world where leaders are increasingly distanced from the consequences of their decisions and the individuals they impact.

The extraordinary costs of corporate misconduct are clear to its victims. Yet, never before have we been able to peer so deeply into the minds of the many prominent perpetrators of white-collar crime. With the increasing globalization of business threatening us with even more devastating corporate misconduct, the lessons Soltes draws in Why They Do It are needed more urgently than ever.


Author Notes

Eugene Soltes is the Jakurski Family Associate Professor of Business Administration at Harvard Business School. His research on corporate malfeasance has been cited by the Wall Street Journal, Financial Times, USA Today , and Bloomberg News . Professor Soltes teaches in Harvard Business School's executive education programs and is the recipient of the Charles M. Williams Award for Outstanding Teaching. He received his PhD and MBA from the University of Chicago Booth School of Business and his AM in statistics and AB in economics from Harvard University.


Reviews 1

Library Journal Review

Soltes (Jakurski Family Associate Professor of Business Administration, Harvard Business Sch.) has written a groundbreaking book on executive misconduct. It draws on the author's interviews with multiple convicted white-collar felons, including Bernie Madoff and Dennis Kozlowski. The author shows how these managers rationalize their actions, rely on instinct, and fall victim to temptation and corporate culture. The book is divided into three parts. Part 1 argues that these criminals don't make cool cost-benefit decisions, contrary to popular belief. Part 2 uses numerous case studies and describes the changing scholarly explanations for white-collar crime. The third section is the work's culmination, with an in-depth interview and analysis of Bernie Madoff, who appears to be a psychopath-Madoff views his victims as suckers who benefited from his scheme before in unraveled. The volume concludes that the organizations that spawn these criminals must be punished to change their leaders' values. VERDICT Engaging, precisely researched, and well argued, this is a spectacular achievement in business ethics, corporate culture, and true crime. Highly recommended for all audiences.-Harry Charles, St. Louis © Copyright 2016. Library Journals LLC, a wholly owned subsidiary of Media Source, Inc. No redistribution permitted.


Table of Contents

Prologue: Managing in the Grayp. 1
Part I The Struggle to Criminalize
1 "Not... bucket-shop operators, dead-beats, and fly-by-night swindlers": Pillars of the Communityp. 13
2 "Guys... don't drop out of windows for no reason": Creating the White-Collar Criminalp. 33
Part II Nature Or Nurture? Reasoning Or Intuition?
3 "Inherently inferior organisms": Bad People Making Bad Decisionsp. 47
4 "I thought it was all going to pass": A Press Release with Consequencesp. 65
5 "If you don't take it then you will regret it forever": The Triumph of Reasonp. 81
6 "I never once thought of the costs versus rewards": Intuitive Decisionsp. 99
7 "I never felt that I was doing anything wrong" Overlooking Harmp. 115
8 "If there was something wrong with this transaction, wouldn't people have told me?": The Difficulty of Being Goodp. 131
Part III The Business of Malfeasance
9 "You can't make the argument that the public was harmed by anything I did": Misleading Disclosurep. 165
10 "Unfortunately, the world is not black and white": Financial Reporting Fraudp. 175
11 "You go from just being on top of the world": Insider Tradingp. 201
12 "I thought we were freakin' geniuses": Deceptive Financial Structuresp. 227
13 "You couldn't stop because you would wreck everything'': The Ponzi Schemep. 257
14 "When I look back, it wasn't as if I couldn't have said no": Bernie Madoffp. 287
Conclusion: Toward Greater Humilityp. 309
Acknowledgmentsp. 331
Illustration Creditsp. 337
Notesp. 339
Bibliographyp. 397
Indexp. 435

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