Entrepreneurship and Organised Crime

Entrepreneurship and Organised Crime

Entrepreneurs in Illegal Business

Petter Gottschalk

Entrepreneurship and Organised Crime provides a fresh and realistic insight into the problem of organised crime activity and the role of entrepreneurs in illegal business.

Chapter 4: Value Configurations in Criminal Entrepreneurship

Petter Gottschalk

Subjects: business and management, entrepreneurship


Based on the enterprise paradigm of organised crime, this chapter outlines how value configuration analysis might be applied to criminal organisations. Distinctions are made between value chains, value shops and value networks. In the value chain, an entrepreneur organises flows of goods. In the value shop, an entrepreneur organises knowledge work. In the value network, an entrepreneur organises connections between actors. Based on the contingent approach to management, entrepreneurs will initiate different criminal organisations depending on the value configuration of a value chain, value shop or value network. For a long time, we thought the only possible value configuration for business organisations was the value chain developed by Porter (1985). Insights emerged, however, that many organisations have no inbound or outbound logistics of importance, they do not produce goods in a sequential way, and they do not make money only at the end of their value creation chain. Similarly, organised crime does not necessarily involve logistics and production, as defined by the value chain concept. Some criminal enterprises provide services, while other activities are mainly problem solving for law firm clients, consulting customers and hospital patients. In such cases, neither the beginning nor end of value creation is characterized by physical goods changing attributes in a sequential chain. Therefore, two alternative value configurations have been identified, labelled value shop and value network (Stabell and Fjeldstad, 1998). As we move into a knowledge economy, both legal and criminal organisations make their living from knowledge creation and knowledge application. The typical value...

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