Preventing Organizational Misconduct by Administrative Fines – Towards a Holistic Understanding

The article discusses the potential of administrative fines at preventing organizational misconduct. Although there is substantive empirical research on the effect of fines, such research does not necessarily distinguish between administrative fines and criminal penalties. Whereas criminal penalties are stigmatizing sanctions, it is more questionable if administrative fines are experienced as sanctions or as mere prices. Drawing from criminological and behavioral literature, we summarize key factors affecting organizational misconduct. We analyze whether these factors usually, or even necessarily, make criminal penalties more preventive than administrative fines. We will argue that administrative sanctions are not mere prices, though most likely less stigmatizing than criminal penalties; much depends on the exact design.