Corruption: the corporate perspective

Abstract

Corruption (bribery, extortion, blackmail, favor‐currying, abuse of insider information, nepotism, favoritism, mafias, protection rackets, siphoning off funds, laundering illicit money) is a source of concern for governments, entrepreneurs, private individuals, non‐governmental organizations, companies – indeed, for society as a whole, on a number of levels; economic, sociopolitical, and ethical. The purpose of this article is primarily to explain why corruption is a cause for concern for companies. It begins by explaining what corruption is, describing how it occurs and offering a causal explanation, and then goes on to describe how it occurs in companies and why it is a cause of concern for them.

To Pay or Not to Pay? Dynamic Transparency and the Fight Against the Mafia’s Extortionists

“…The first category draws on information from extensive surveys and macro-data on socio-economic systems (see Hess and Dunfee 2000) and discusses anti-corruption policies (Hess and Dunfee 2000;Hess 2009). The second, theoretical in nature, concerns the ethical nature and implications of corruption (see Argandoña 2001Argandoña , 2003a. The third is related to individual perceptions about corruption, and differences across geographical areas (see Bernardi et al 2009).…”

“…Following the seminal works of Argandoña (2000Argandoña ( , 2001Argandoña ( , 2003aArgandoña ( , 2007 and Dunfee 2000, 2003;Dunfee and Hess 2001), the literature on business ethics and corporate social responsibility (CSR) is focusing on corruption-related issues such as anti-corruption policies being adopted in the public sector (Hess 2009), corruption indexes to rank countries (Warren and Laufer 2009), different perceptions of bribery and ethical behavior (Sanchez et al 2008;Bernardi et al 2009), the role of the firm in the fight against corruption (Calderon et al 2009), etc. It should be noted that empirical research in this field focuses mainly on analysis and discussion of extensive quantitative data, gathered via questionnaires or from indirect sources (see Nwabuzor 2005).…”

Cultural Secrecy and Anti‐corruption Disclosure in Large Multinational Companies

“…Several studies show that corruption has a negative impact on sales (Gaviria 2002;World Bank 2003) and that it contributes to increased operational costs (Errath et al 2005) and costs associated with managerial misconduct arising from the lower regulatory oversight typical in corrupted organisations (Jensen and Meckling 1976). These additional costs relate to bribery, penalties and fines (Argandoña 2001;Doh et al 2003). Corruption is also related to reputational, legal and competitive risks (Hess 2009).…”

Corporate reporting on corruption: An international comparison

“…Corruption matters because, at the firm level, it inflicts uncertainty and additional costs on business; at the societal level, it weakens societal institutions like courts and regulatory agencies, diverts funds away from food, health care, poverty alleviation or education projects, slows economic growth and misdirects entrepreneurial talent (Heywood & Rose, 2014;Rodriguez, et al, 2006;Svensson, 2005;Tanzi, 1995). At the same time, the private sector has also been a major source of corruption in many countries, whether these are actions that benefit the company, such as bribing civil servants to obtain public contracts, or actions that benefit individuals within the company, such as nepotism in personnel recruitment (Argandoña, 2001;Sikka & Lehman, 2015).…”