1. Purpose

The purpose of this research is to provide and overview of the criminal victimization of businesses and set up the foundation for establishing efficient crime prevention policies. Specifically, this research is aimed at verifying 1) the crimes against businesses in Korea, their extent, and the details of the damage caused by those crimes and their characteristics, 2) the factors that make the victimized businesses vulnerable against the crimes, 3) the actions taken by the businesses after victimization, and 4) the perception on crime held by the businesses, the measures they take to prevent crimes, and the amount they spend in preventing crimes.

2. Overview

This research project represents the first attempt in Korea to analyze commercial victimization in Korea. For this reason, the project included the comparative analysis of commercial victimization and measures against it across various countries, focus group interviews with the police and business owners, and in-depth interviews with related individuals. A draft questionnaire was developed based on the findings from these analysis and interviews, of which validity was verified through cognitive interviews and a preliminary survey.
The basic questionnaire spanned over a total of 12 crime types. The basic questionnaire asked each respondent’s experience of 1) theft (including attempted theft), 2) fraud, 3) embezzlement, 4) robbery (including attempted robbery), 5) assault, 6) damage and destruction of property, 7) obstruction of business involving violence (disturbance or violence at workplace), 8) sexual violence, 9) distribution of malicious information, 10) false report, 11) coercion, and 12) bribery. The questionnaire also included questions on the respondent’s fear of commercial crimes, measures taken to prevent commercial crimes, and the personal characteristics of the respondent. Victimization experiences were categorized based on the findings from the basic questionnaire, and specific details of the “most damaging incident” were compiled using an incident questionnaire.

3. Method

The target population for the survey was businesses falling under the Wholesale and Retail Trade(G) category and the Accommodation and Food Service activities(I) category under the Korean standard industrial classification.
The samples were collected from the business list from the Report of the Census Establishment. The population consisted of 1,700,484 businesses covered by the Report of the Census Establishment in 2014. The number of samples was set at 8,000 cases considering the expense and time required. In consideration of excluded samples, a total of 8,140 cases were analyzed.
The cases were sampled using the stratified systematic sampling method. Three stratification variables were selected for the survey - business type, size, and location - considering the distribution of key variables under the Report and key factors affecting the victimization of businesses.
The main survey was conducted for seven weeks, from August 16th to September 30th. Each surveyor visited each business for a face-to-face interview based on the questionnaires. Self-reporting survey was also performed for respondents willing to take part in such survey.

4. Key Findings

(1) Victimization Rates

a. prence rates

For every 100 businesses surveyed, 28 experienced at least a single incident for the last year. From this finding, it can be inferred that, of the 1,700,484 businesses, 479,463 was subject to at least a single incident of crime for the last year.
For every 100 businesses surveyed, around 23 businesses experienced at least a single incident of property crimes for the last year, while 8 of them experienced violence crimes. The number of companies subject to property crimes was three times as large as the latter.
The crimes experienced by the largest number of businesses was Theft(12.6%) and Fraud(12.0%), followed by Obstruction of Business involving Disturbance or Violence(5.6%) and Sexual Violence(1.9%). Only a few businesses experienced crimes committed by their employees. Most crimes were committed by persons other than their members, such as guests.
The number of victimized companies varied significantly among business types.
For every 100 Bars surveyed, 46 of them experienced victimization, while the number was only 15 for Auto and Auto Parts Sellers. The percentage of businesses that experienced victimization was the highest among Bars, followed by Retailers(30%), Restaurants(29%), and Accommodation Businesses(28%).
Wholesalers(18%) and Auto and Auto Parts Sellers reported much lower percentages of victimized businesses.
The variation of the number of victimized businesses across business types was the most significant for violence crimes. For every 100 Bars surveyed, 28 of them experienced violence crimes in 2015. The figure dropped to around 1/2 for Restaurants (11) and Accommodation Businesses (10), to 1/5 for Retailers (5), and to less than 1/10 for Wholesalers (2) and Auto and Auto Parts Sellers (2).
Across all business types, the number of businesses victimized by violence crimes was higher than those who experienced property crimes.

b. incidence rate

The average number of victimizations experienced every 100 businesses was measured at 112.37. From this finding, it can be inferred that a total of 2,631,612 incidents were experienced by businesses falling under the Wholesale and Retail Trade category and the Accommodation and Food Service activities category.
The average number of victimizations by property crimes experienced by every 100 businesses was measured at 112.37, while the number of victimizations by violence crimes was 39.79. The number of property crime incidents was three times as large as the latter. For every 100 businesses surveyed, the number of victimizations by crimes involving deception and force was 2.59.
Theft was found to be the most common crime experienced by businesses, with 72.3 incidents experienced by every 100 businesses surveyed, followed by Fraud(38.0), Obstruction of Business involving Violence(23.11), Sexual Violence(13.82), Distribution of Malicious Information(1.19), Damage and Destruction(1.18) and Coercion(1.03). On the other hand, the number of victimizations by Assault, Robbery, False Report, and Bribery was quite low, with the number of incidents experienced by every 100 businesses standing at 0.83, 0.22, 0.37, and 0.02, respectively.
The incidence rate also varied across business types. Accommodation Businesses reported the highest incidence rate at 248 incidents for every 100 businesses
surveyed, although they did not manifest a high prence rate. Bars (226) and Retailers (205) reported similar figures. The incidence rate for Restaurants, however, was much lower at 130. Auto and Auto Parts Sellers and Wholesalers also showed a significant gap from Accommodation Businesses, reporting 62 incidents and 54 incidents for every 100 businesses surveyed, respectively. The variation across business types was more prominent in incidence rate than in prence rate.
The variation across business types was most striking in violence crimes, where the incidence rate of Bars (134) was 36 times as high as the incidence rate of Auto and Auto Parts Sellers.
While most business types reported a higher incidence rate of property crimes than violence crimes, Bars were found to be at a greater risk of experiencing violence crimes. Bars reported a higher incidence rate of violence crimes (134) than property crimes (90). Restaurants reported a higher incidence rate of property crimes, although the gap between property crimes and violence crimes was smaller compared with other business types.

c. Concentration of victimization

Among businesses who experienced at least one incident in the last year, the average number of victimizations was 5.5. The average number of victimizations by property crime and violence crimes was 4.90 and 4.87, respectively.
The crime most likely to be recurrent was Fraud by Employee(8.6 incidents), followed by Sexual Violence(7.4 incidents). The crime least likely to be recurrent was Robbery (1.3 incidents). This finding shows that incidents of Fraud by Empoyees and Sexual Violence are concentrated around a few businesses.
The risks of repeated victimizations also varied across business types.
Accommodation Businesses reported the highest risk(9.0 incidents on average), which was three times as large as Wholesalers(2.9 incidents on average), which reported the lowest level of risk.
The overall risk of repeated victimizations by violence crimes was lower than property crimes. The risk of repeated victimizations by violence crimes was the highest among Retailers (5.7 incidents on average) Each business type was found to be particularly vulnerable to repeated victimizations by different types of crimes. Auto and Auto Part Sellers were most likely to be subject to repeated victimizations by Distribution of Malicious Information (11.4 incidents on average), and Wholesalers and Restaurants showed higher risks of repeated victimizations by Sexual Violence (5.1 incidents and 6.7 incidents, respectively). As for retailers, the highest risk of repeated victimizations came from Fraud by Employees (31.0 incidents on average), while Accommodation Businesses was the most vulnerable to repeated victimizations by Theft by Customers (14.9 incidents on average) Fraud by Employees and Distribution of Malicious Information were not the types of crimes commonly experienced by business entities. However, the average numbers of incidents of those crimes were high among Retailers and Auto and Auto Parts Sellers, which suggests that the said crimes were concentrated in certain types of business.

(2) Factors Causing Vulnerability to Crimes

Retailers, businesses dealing in alcoholic beverages, and businesses operating around-the-clock were found to be more vulnerable to property crimes. While a business with a longer history reported a lower risk of property crimes, the risk was positively correlated with the average number of visitors per day.
The risk of violence crimes was the highest among Bars, and positively correlated with the size of business entities. The risk of violence crimes was found to be affected more by the business type and mode of operation of the businesses, rather than their locations. This tendency was more apparent in violence crimes than property crimes. On the other hand, business type, sale of alcoholic beverages, around-the-clock operation, protective measures, and disorder in the local community were found to raise the risk of victimization across all types of crimes.
Retailers, convenience stores, and businesses dealing in alcoholic beverages were the most vulnerable to crimes committed by employees. Larger businesses reported higher risks of crimes by employees, and businesses with longer history reported lower risks.

(3) Fear of Crime and Crime Preventive Activities

Fear of crimes in general was the highest among Bars(1.90 points), and the lowest among Wholesalers (1.66 points). Bars, Restaurants, and Accommodation Businesses reported high levels of fear of violence crimes, while the fear of property crimes was high among Retailers. Bars and Auto/Parts Sellers reported a relatively high level of fear of bribe-taking by public officials or coercion from their clients.
To break down the findings by business types, the fear of Burglary(15.7%) was found to be the highest, followed by Robbery(15.5%) and Obstruction of Business involving Disturbance or Violence(13.7%). Fear of crime was found to be positively correlated with sale of alcoholic beverages, average number of visitors, number of types of preventive measures, and the level of disorder in the area.
The means most commonly employed by the surveyed businesses to prevent crimes was precaution aimed at reducing the potential causes of crimes, followed by cooperation with the local community, and protection.
Bars and Restaurants, which reported higher fear of Obstruction of Business involving Violence, resorted less to protection measures, while showing a relatively high level of preventive activities within the local community.

5. Implications

The findings above suggest, more than anything, the need to focus on preventing re-victimization. The surveyed businesses were found to be experiencing a significantly high level of repeated victimizations. An average business entity which experienced any crime in the last year reported 5.5 incidents of victimizations in the same period. It is imperative to identify which crime types and business types represent higher risks of re-victimization, and immediately intervene to remove the risk factors from the identified high-risk groups.
Risk of falling victim to crimes was also found to be correlated to local characteristics of the area(physical or social disorder, proximity to traditional markets) where those businesses are located, as well as business types or modes of operation.
The significant effect of local characteristics on experience of crime suggests that individual efforts from businesses, such as strengthening their preventive facilities, may not be enough to prevent crimes. Strategies aimed at preventing crimes against businesses should be designed in a way to allow local businesses to engage themselves in prevention projects in each area.
The level of preventive efforts among the surveyed businesses was found to be relatively low. Those who do make such efforts were mostly dependent on CCTVs or security service providers, which require fairly high maintenance costs.
Bars and Restaurants, mostly consisting of smaller businesses, reported higher risks of victimization. Despite the higher risk, however, they were behind other business types in terms of the efforts to prevent crimes. This finding suggests the need to come up with preventive strategies tailored to smaller businesses which may lack the resources to invest in preventive facilities.