Every day, iconic brands like J.C. Penny, Sears, Kodak, and Blockbuster vanish. Jeff Bezos himself predicts that Amazon will eventually go bankrupt. While once exemplary lawful firms fail, El Chapo Guzmán, convicted head of the Sinaloa Cartel, and his wife launch their high-profile “El Chapo 701” fashion clothing line. Managers in lawful companies face disruptive technologies, groundbreaking new products, and competition from entrants that challenge their survival. Every organization must manage its way through a rapidly changing environment. Yet some organized crime syndicates endure decades despite massive law enforcement efforts and rival gangs dedicated to their daily demise.
Using rigorous economic analysis, we analyze how these criminal organizations survive, and even thrive, whereas legal companies that play by the rules falter and often fail.