'Corruption is a Cancer. A Cancer that eats away at a citizen's faith in democracy, diminishes the instinct for innovation and creativity.' - Joe Biden.
Introduction:
We all define corruption as the abuse of entrusted power for private gain. Corruption erodes trust, hampers economic development, and further accentuates inequality, poverty, social exclusion, and the environmental crises. In this paper, we shall go ahead discussing about the issue of 'corruption' in the corporate world.
Corruption and the Corporate World:
It is often misunderstood as a rumour that spreads like a wildfire that corruption enhances the economic pattern while on the contrary the rational viewpoint holds that corruption acts like 'sand in the wheels' of an economy. It negatively affects foreign direct investment in a country, diminishing economic growth and harming the society on a broader scale. Scholars have also been interested in studying corruption in different countries. The actors who make bribe payments well analyse the micro-factors and macro-factors of an economy. It is equally important to note that the people who take bribes play a vital role in extracting bribes. Such people generally support the corruption systems as they have their vested interests in the system. The corrupt officials strategically operate to sustain a corrupt system that is adverse to ethical enterpreneurs and society.
The researchers have testified that the decline of morals and ethics on part of employees has also resulted into bribery. The demand side of bribery strongly influences corruption. Certain organisations can take on forms to pursue opportunities for gain by facilitating and maintaining the business of bribery. We should investigate the dark and destructive sides of business. It is a dark practice that is destructive to the government and people's trust in the nation. Corruption is the misuse of public office for private gain. The most common type of bribery which is there to alter a person's behaviour. Studies on corruption enhance our perception on the economic consequences of the practice. Some scholars have argued that bribery can affect businesses in countries where the government is rigid and bureaucratic and slow- also known as 'Greasing the Wheel' hypothesis. Corruption always hurts the economy. The presence of corruption also signals an inefficient government. Corruption also negatively affects society because it serves as a regressive tax on the poor and drives enterpreneurs from constructive action to destructive activities.
Studies have shown that managers pay bribes to realize success in transition economies, which are characterised by weak economies and weak governments. The ability to pay a bribe negatively depends on firms refusal power. Bribery is positively related to greater perceived financial constraints and greater competitive intensity. Studies suggest that public officials act as bribe discriminators and it is determined to extract bribes. Some government officials may innovate and adapt their behaviour to sustain the status quo of bribery.
Anti-corruption efforts seems to become entangled in the very corrupt networks they were meant to fight. Most studies on corruption have centred on its consequences with very limited research focusing on how corruption is organized - or how it is structured and propagated. The agents who play a major role in promoting corruption have not been researched much.
India is an enterpreneurial society webbed in the network of corrupt system. As a result, numerous government intiatives have been launched to curtail corruption. For instance, in 2016, the Indian government took a major step towards curbing corruption by demonetizing large banknotes - namely eliminating notes for 500 and 1000 rupees. The attempt was to reduce the negative effects of the informal economy. Processes like Digital India have been initiated to reduce corruption by making the working of the government more transparent. Digital India has been regarded as 'people's movement' as it empowers Indian citizens by enhancing public service delivery to benefit poorer individuals and presenting opportunities to lower corruption. Despite the efforts into interplay, corruption is still widespread in Indian society. Second, we decided to focus our attention to the Indian state of Maharashtra as this region is recognized for it's enterpreneurial spirit and has experienced a host of corruption scandals.
Corruption had turned out to be the biggest obstacle for doing business in India. 60% of business owners have experienced corruption in some form when doing business. A significant portion of this corruption occurs when small business owners interact with government officials to acquire clearance, approvals and licenses. This has been referred to as need corruption because these individuals need bribery to gain fair acess to the government services they require to run small businesses. We must move ahead to openly discuss the organisation of corruption in economies. The government agents often play an important role in enabling corruption. Sometimes, politicians also act as agents for bribes.
The findings reveal that there is typically a hierarchy of officials who receive bribe payments. The bribe amount is divided among a group of government officials who faciliate a government service. These government officials claimed that they accepted bribes owing to the low wages they were being paid in order to supplement their incomes. To obtain the jobs in the first place, many have to pay a bribe. Moreover, by selecting people who willingly pay a bribe to secure a job, the corrupt system onboards individuals who likely hold attitudes about corruption that align with perpetuating the process. They are unlikely to be whistleblowers. They are probably interested in making a return on their investment. Generally, people who have some ethical standards and refuse to accept or pay bribes are either expelled or relocated from the group. Some government officials are worried about being caught taking bribes and thus rely on agents. Agents are placed by the officials themselves because they themselves can't ask for money directly. Hence, they get it routed to themselves through these agents. Politicians often play an independent intermediary role between small business owners and government officials couching their brokering position in terms of helping their constituents. Studies also reveal that politicians faciliate and participate in the bribery process themselves. Politicians take part in the process of bribery and get their advantage cut out from the situation. Local politicians do get their share of money when they help certain businessmen in relocating their businesses. It's a well defined model and these people work in perfect alignment with each other. Politicians even provide new sources of exploitation for government officials. Local politicians work along with the officials by giving them leads on people involved in illegal construction. The officials then make a surprise visit on these premises and try to corner the person involved. They scare him with potential action for breaking laws. In such situations, the officials try to put pressure on these people and make them pay money to let them off of any official action sanctioned on them. Thus, now we know that to sidestep the government's anti-corruption efforts, agents including politicians serve as brokers in faciliating small businesses bribe payments to government officials.
Studies also stress upon the role of the government officials to curtail corruption by enacting new laws. These anti-corruption effects hold a minimal impact and most people agree to the point that these anti-corruption drives will ultimately be ineffective in India. The government's implementation of new technology to lessen the examples of taking bribery. Hardly, there has been any reduction in corruption. We are still paying bribes the way we had been in the past. The practice to stop these bribes shall never come true in ages to comes and that the system cannot work without the act of taking bribes. Most of the citizens of the country are still doubtful of the fact that whether corruption will be eliminated from the country or not. Corruption is almost everywhere and no political party can manage to get rid of it completely. The use of cameras to catch the events of a bribe being accepted has further changed the policy of government officials operate to avoid being caught. The use of technology to stop bribing has further accentuated the corruption in the system. One who accepts bribes cannot be just too open. Government officials will never quote about it openly. They generally write it on a piece of a paper and that is how negotiation happens. The government officials have now got habituated to the process of taking bribes and cannot work the normal way now. We conclude that corruption is a vicious cycle in which business owners do not report corrupg government officials because they think that nothing will be done.
The informal autonomous ventures established within the government are driven by government officials motivation for personal gain. The objective of these ventures is to exploit opportunities to their convenience. Hence, we discover an interesting interplay between bureaucracy and autonomy unfolding simultaneously in the same organisation.
Individuals are selected into corrupt informal business ventures based on bribe payments. Those who have vested interests in the system of corruption also overcome the government's efforts to curb corruption and continue the status-quo of corruption. For this to change, the victims of it must report instances of bribery. However, people are reluctant to do so as they know that blowing whistle on corrupt behaviour will only mean suffering for them. It appears that only some social movement based on collective action has the power to dismantle this powerful system.
Some enterpreneurs act as brokers to generate positive outcomes for communities. This shows as to how brokerage can facilitate unlawful transactions. These agents are a means to circumvent the efforts to faciliate bribery. Politicians also are a part of the structure so as to garner their political mobilisation. Anyway, corruption is highly destructive in developing economies. The bureaucratic process is slowed down so that the process of bribery can run smoothly. Small business are always ready to pay it as they think that the bribe will help to run business smoothly. The behaviour in any of the cases harms the society at large. The future research can theorize the system to an end where it is more pristine than today. We must note that the networks among corrupt actors underscores the importance of trust and networks in the relation. Myriad of guidelines and regulatory frameworks have been developed to curtail corruption.
Corruption and the Business Ethics:
The effects of corruption on society are well documented. Politically, it stands as a hindrance to democracy and the rule of law. It puts an imbalance in the way that business is done enabling those who corrupt to win. Some employees may even conside it to be harmless. Still, corruption is not a victimless crime. Corruption has its costs - it costs people their freedom, health, human rights and etc. Corruption fails the adequate procedures required to run a system. Companies should be proactive in fighting bribery and corruption. No company ofcourse wants it's reputation to be tarred by involvement in a corruption scandal. In order to bring a long term behaviour change, the companies need to implement the anti-corruption measures effectively. Corruption can be so very well ingrained in the societies as in some cases the payments are seen as the norms of doing business.
Different countries and cultures may have different interpretations of what is considered ethical when it comes to bribery and corruption. Research has revealed that simply publishing a code of ethics will not help in ensuring that the policies and measures to check corruption are sufficient. As survival takes precedence over moral considerations, some people cite it as essential for their sustenance. Employers need to provide relevant support to staff to help them understand the ethical challenges they face. Although, many of them are already aware but not everyone is courageous to report about it. An ethics programme requires various components including, for example, awareness of the issues and training in handling them, a communication strategy and a speak-up procedure. With the advent of technology, new ways have come up to support the staff. There is always a delicate balance to be had between engaging issues and encouraging employees to apply them in real terms. Sometimes people accept bribes without being much aware of the sinister plans behind it. Being clear about what can and can't be accepted is good business practice and reduces the risk of corruption.
Some practical guidance has also been extended to help recognise a particular situation. It has been designed to give employees the confidence to make the right decision in situations which could lead to accusations of bribery by explaining why that particular decision needs to be made. Factors such as fear, ignorance or pressure to meet business targets is always there and have great chances of putting everyone into ethical dilemmas. The obvious becomes so much less obvious when in the moment. Visible support from leadership is atmost required. The management should declare a zero-tolerance approach to bribery and corruption. Equally, role playing and working should be also there into consideration. Creating a culture of integrity and openness should be there to help discussion on corrupt practices within the organisation. It is a powerful way to help mitigate against the risk of an ethical lapse. Word should be spread about the importance of ethical standards and that's how the fight against corruption can take a serious form.
The Shackles in the Business Economy:
Corruption appears out to be the major shackle in the business behaviours. It is the abuse of entrusted power for private gain. Corrupt practices are usually hidden and covert, the extent of corruption is difficult to measure. Corruption has been recognised as a global problem and as an underlying cause of poverty, inequality, terrorism and conflict. Over the time, the issue has caught the attention of national regulators and international institutions. The statistics cited for corruption have either not been revealed or have not been summated properly. For corporations, the bribery of government officials is the most salient form of a corrupt act. Presently, there is a remarkable degree of international regulatory consensus over the expectations of business with regard to bribery. A paradox exists in which corruption is universally condemned as unethical or immoral yet corrupt behaviour is widespread. Zero tolerance policies can be effective deterrents. But they depend on being practically feasible and the psychosocial environment and may also create a motivation to further conceal one's own corruption or speak up less about the corruption of others. Corruption is not limited to ill-intentioned people but it also hurts the morally engaged people too. It is again challenging that corrupt environments impose norms, rewards and punishments.
Corrupt practices are so very pervasive in business that it is impossible to completely eliminate the risks of corruption. As a result, an effective anti-corruption programme is considered both an operational and legal defense against employees violations of anti-corruption laws, and may reduce the penalties an organisation faces if it is found to have engaged in bribery. There are some key elements of an anti-corruption drive:-
* Commmitment from senior management and a well defined policy against corruption.
- Code of conduct and compliant policies and procedures.
- Oversight, autonomy and resources.
- Risk assessment.
- Training and continuing device.
- Incentives and disciplinary measures.
- Third-party due diligence and payments.
- Confidential reporting and internal investigation.
- Continuous improvement and periodic reviews and assessment.
- Integration of the system.
The top-down management focuses on policies, procedures, and processes rather than culture or human behaviours more broadly. There are significant gaps in the implementation of programs and there are limitations in the design themselves. It is surprising that corruption should be tackled via internal controls and make anti-corruption programs the responsibility of the compliance and legal departments. Corruption risk should be viewed as a principal agent problem. The regulatory climate means that 'zero tolerance' is the only appropriate public position for companies to take on the issue. It is logical and unsuprising that companies have implemented anti-corruption programs lean heavily on audits, due-diligence checks and other documentary processes that demonstrate efforts to reduce corruption levels. It has also been revealed that individual employees can participate in unethical behaviour for prosocial reasons with the belief that they will support their organisation. The study finds that positive social relationships and higher levels of identification with the organisation may unintentionally encourage unethical behaviour designed to benefit the organisation, despite also enhancing favourable outcomes such as increased job performance and extra role behaviour. This involves neutralization, a process which masks the moral content of an unethical action or otherwise causes it to be overlooked. Social exchange theory suggests that employees might view unethical approaches to helping their organisation win business as a way to reciprocate positive social exchange relationships with their employer. High levels of identification thrive corrupt behaviours swiftly. Organisations groups tend to maintain their loyalty towards their head and against the wider society.
A compliance-led approach does not adequately address either the individual or group psychology of corruption. Preventive policies are necessary but not sufficient. Corruption risk touches almost every aspect of a transnational business. Senior leadership commitment to anti-corruption and legal compliance are required. However, the dominant approach is to view anti-corruption efforts as a regulatory cost an make it the compliance department's responsibility. The tensions resulting from this domain have been recognised but have not been attended properly.
Corruption may appear to be efficient or beneficial but this is probably not true in the long-term of when examining sophisticated analyses of the impacts. Corruption has a dynamic relationship with the bureaucratic environment in which a company operates. Once bribery is on the table, the cost of procedural barriers increases it's principal cost. Ultimately, it leads to higher costs and more harassment than operating with integrity. This also has the potential for reputational damage. Risking criminal penalities typically has the opposite of intended result. The clean-hands policy approach is likely to be successful with considerable governmental changes. However, such policies also create a motivation to more effectively hide or cover up corruption making it harder to detect. The consequences of hinder-speak up culture is this witnessed in an organisation.
Zero-tolerance is a just aim which successfully requires the consideration of the psychological and socio-cultural influences in the environment that affect individual decisions. For example, youth raised in corrupt environments have lesser chances of drawing an objection on the activities of corruption. There is also the issue of practicality and potential repercussions and risks to an organisation from those disempowered when their corruption is no longer effective or accepted. Regulatory investigations are still a low-impact event. In some countries, corruption measures have gone highly aggressive. Compliane teams have gained visibility and resources. Moreover, criminalized compliance regimes are inherently ineffective because they impose unintended behavioural consequences on corporate employees. Employees subject to criminalized compliance have greater opportunities to rationalize their future unethical or illegal behaviour. The complexity of corruption had been recognized as an organisational phenomenon. It can be restricted either to a bad agent or the collective wrong deeds of a group. It can impact the entire organisation with the change in leadership and strategic decisions. Corruption is carried out by individuals to secure the benefit of the organisation but later becomes so widespread. The question arises that whether it is possible to generalize about corruption and also speaks the need to examine both it's group and organisational characteristics.
De-normalization of corrupt regimes is required where the self-serving ideologies develop to justify the behaviour is rejected. De-institutionalization is also required as the rejection of all corrupt acts and processes embedded in structures and processes. There is also the idea of social cocoon where cultures or subcultures of corruption develop within an organisation. When employees consider whether to be unethical on behalf of their organisation, existing cultural norms may influence the perceived acceptability of such pro-organisational behaviours. Attempts to de-normalize corruption are difficult especially where rationalizations for corruptions have already developed in roots. There may be great social values inside the organisation to be gained through corrupt behaviour and responsibility. Careful analysis of company culture may reveal pressure towads corrupt behaviour. In addition, when corrupt behaviour is detected, interviewing guilty parties to obtain an understanding of their experience can also reveal organisational dynamics that led to the behaviour. The growth of corrupt culture somewhere justifies the notion of a war persistent within the organisation that is, 'End justifies the Means'. Further supported by a perceived need for security and punishment of deviation from corrupt practices, employees rationalize bad behaviour as necessary for security and justifiable as team spirit. As a community of fate, they feel their mutual survival is on the line as they are pressed into a battle against competitors and market conditions. This shared commitment leads to the development of team behaviour. As group survival is essential, survival instincts overtake moral thinking justifying corruption as acceptable and necessary. Organisations where there is an overwhelming focus on competition with growth as an exclusive goal, the norms of secrecy and fear get highly directive. This reveals the degree to which tackling corruption rests on a more ethical internal culture. Most companies still struggle to come out of their behaviour dilemmas. Furthermore, industry disruption and geopolitical uncertainity are giving momentum to perceptions of an external environment in which ruthless and competitive business practices are seen as the only way to survive.
The identification of cultural influences shall help in mitigating challenges of corrupt behaviour. Psychological contracts between employee and employer may be a strong driver of actual behavior. Unethical leadership is associated with increased crimes of obedience, but this relationship is dampened by individual moral awareness. This may show the need to select and train officials of moral awareness and also raise concerns of handling managerial pressure. When connected and courageous, the employee is likely to act morally and take action when others endanger the organisation through unethical behaviours. The importance of psychological contracts is further clarified by research findings that the contract can create feelings of shame and guilt when an employee feels that failure to participate in corruption is a violation of that agreement. Activating or guiding these self-conscious emotions to align with ethical pursuits, such as feeling more guilt about corruption than organisational non-compliance may be an important factor lever in the reduction of corrupt behaviours. It follows that anti-corruption training can improve their ability to reject their justifications for corruption. The conversion of pressures into behaviour are governed in large part by the employees ability to think morally and act in accord with moral values. An organisation must address tensions between global and local standards as well as internal tension between compliance and commercial goals. Corruption can be seen as 'degeneration of a legitimate value'. Through the methods of degeneration, individual responsibility and methods of sense-making can be altered to encourage corruption. Further, there are ways to relate to anti-corruption measures. Interventions can be shaped to appeal to these psychological pathways. Corruption may also spread in an organisation due to the result of emotional contagion. Even well-intentioned and morally engaged individuals can become corrupt subject to instrumental pressures. People are likely to be praised for their corrupt behavior while transgressions against the organisational norms are punished resulting in the corrupt behaviour appearing as the moral one within these relationships. Generally, the corrupt behaviour is viewed to be categorically immoral. At the national level, the government leniency towards unethical practices can foster unethical culture within firms. This is the dilemma for the businesses operating within the organisational forum. Organisations with unequal power distribution survive corrupt behaviours more readily than others. Perceptions of corruption are linked to inequality and unfairness. Corrupt behaviour is both intuitive and unintentional as well. Accountability, mechanisms, transparency and codes of conduct can be helpful in this regard. This reduces the appearance of corruption as common and instead signals unified commitment to ethical behaviour. Thinking of corruption as being more accepted in certain cultures may be more of a stereotype than a reality. Cross-disciplinary researches must be conducted on this practice. Ethical values must be framed in such a manner that it appeals to all. Building strategic partnerships and effective judicial action can help in controlling corruption. Individuals with greater moral commitment regardless of demographics and personal characteristics, may be less likely to give in to corruption. Those who are uncompromising with respect to their integrity are less likely to accept bribes while those with more honest behaviour are less likely to accept bribes. Learning and questioning this practice can help us understand about the manifestation of this practice. We get to know about the various folklores that continue to support this tradition. Corruption proposes risks that cannot be eliminated. Companies must make strategic decisions to control this practice.
Conclusion:
Corruption seems to be ceaseless in the business world. Research and studies have discussed the possibility of it being eliminated but there are very lesser chances that the discussion may shape into reality. Anyway, the change can always begin. We always have to draw a new line. We have no idea as to when this process would end but the change has to always begin at our places and the place where are perceptions are rooted. Elaborate research have been done on a myriad of areas but the reality is yet to be unearthed.