Why Do Companies Succumb to Price Fixing?

When Ben Franklin wrote Poor Richard’s Almanac and the words, “A little neglect may breed great mischief,” he did not have price fixing in mind. To the 47 executives in companies in the folding-box industry convicted of price fixing, however, the words seem tailored to fit. In those companies convicted under antitrust laws in 1976, […]

by

Jeffrey A. Sonnenfeld

and

Paul R. Lawrence

by

Jeffrey A. Sonnenfeld

and

Paul R. Lawrence

From the Magazine (July 1978)

Down the centuries social analysts have frequently charged, “Laws are like spiderwebs, which may catch small flies but let wasps and hornets break through.” As more and more corporations have been caught in the web of price-fixing laws, however, this charge has lost its punch. Senior business managers in industries that have never before known these problems, as well as previous offenders, are probably more concerned now about their corporate exposure to being indicted and convicted of price fixing than they were in any other recent period.

A version of this article appeared in the July 1978 issue of Harvard Business Review.

JS

Jeffrey A. Sonnenfeld is the senior associate dean for executive programs at the Yale School of Management and the president of Yale’s Executive Leadership Institute.
PL

Paul R. Lawrence was the Wallace Brett Donham Professor of Organizational Behavior Emeritus at Harvard Business School.

Why Do Companies Succumb to Price Fixing?

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