Resisting Corporate Corruption teaches business ethics in a manner very different from the philosophical and legal frameworks that dominate graduate schools. The book offers twenty-eight case studies and nine essays that cover a full range of business practice, controls and ethics issues. The essays discuss the nature of sound financial controls, root causes of the Financial Crisis, and the evolving nature of whistleblower protections. The cases are framed to instruct students in early identification of ethics problems and how to work (...) such issues within corporate organizations. They also provide would-be whistleblowers with instruction on the challenges they’d face, plus information on the legal protections, and outside supports available should they embark on that course. Some of the cases illustrate how ‘The Young are the Most Vulnerable,’ i.e. short service employees are most at risk of being sacrificed by an unethical firm. Other cases show the ethical dilemmas facing well-known CEOs and the alternatives they can employ to better combine ethical conduct and sound business strategy. Through these case studies, students should emerge with a practical toolkit that better enables them to follow their moral compass. Finally, the cases provide an in depth look at how a corporation becomes progressively corrupted (Enron), how the Financial Crisis was rooted in ethical decay at institutions as diverse as Countrywide, Goldman Sacks, Citigroup, Fannie Mae and Moody’s, and at the ethical challenges that persist in the post-Crisis, post-Dodd-Frank environment. (shrink)

The American regulatory model of corporate governance rests on the theory of self-regulation as␣the most effective and efficient means to achieve corporate self-restraint in the marketplace. However, that model fails to achieve regular compliance with baseline ethical and legal behaviors as evidenced by a century of repeated corporate debacles, the most recent being Enron, WorldCom, and Refco. Seemingly impervious to its domestic failure, Congress imprinted the same self-regulation paradigm on legislation restraining global business behavior, the Foreign Corrupt Practices (...) Act. This anti-bribery initiative prohibits unethical and illegal payments made to foreign public officials in an effort to eradicate bribery as a rational-choice global market entry strategy. However, this paper illustrates, using newly complied statistics from 1977 to 2008, that the FCPA has not had a dramatic impact on U.S. global corporate behavior despite its recent high profile coverage and the tough regulatory rhetoric about corporate compliance. The paper also extends the prior Cragg and Woof FCPA efficiency study and provides current empirical evidence to resolve several unanswered questions raised by that earlier study. (shrink)

Twelve detailed essays were assembled by editor Sarah Armstrong, to help students obtain a balanced understanding of corporate corruption. Students will read whether global efforts against corruption are working, whether corporate profiteering is a source of environmental violence, and whether corporate rights work against the individual's rights.

This paper seeks to determine the extent of anti-corruption information disclosure in the sustainability reports originating from Gulf countries. Focus primarily on the fight against corruption, this study utilizes a deeply-rooted content analysis technique of corporate sustainability reporting, covering 66 Gulf Cooperation Council (GCC) firms during 2014. Strengthened by the application of institutional theory, insight into the results points to a state of limited maturity regarding the disclosure of anti-corruption procedures in the region. More specifically, the results highlight the compliance (...) in the reporting of conduct code, while reporting information on whistle-blowing was significantly less in comparison. Firms in Qatar and UAE ultimately release better informed reports; inclusive of detailed information on internal anti-corruption practices. (shrink)

Recent studies :98–144, 2002; Weismann, J Bus Ethics 88:615–66, 2009) revealed that in the first 28 years of its existence, the Foreign Corrupt Practices Act was not enforced by the federal government. The Weismann study further concluded that the FCPA, designed by Congress as a self-regulatory model of corporate governance, failed to achieve the regulatory goal of deterring global bribery by U.S. companies. The current article addresses the reasons that the FCPA remains an ineffective measure to control bribery (...) as a global market entry strategy despite the highly publicized 2006 Department of Justice initiative to increase prosecutions and tighten enforcement efforts. The failure arises out of both the increased use of informal dispositions of case prosecutions,, which has made “getting caught” merely an increased “cost of doing business” and the failure to close the regulatory gaps in the statute that permit violators to slip through the enforcement net. The article updates and compiles the case prosecution data for every reported case prosecuted between 1977 and 2011. That data are then compared to the results of a 2010 integrity risk survey performed by Deloitte Financial Advisory Services and Forbes which reveal a widely held global business perception that compliance and integrity risks appear to be rising sharply and that the FCPA is ineffective in deterring bribery and corruption in foreign markets. The article aims to serve as a predictive tool for policy makers and business professionals in assessing risk in the global markets, particularly as commerce intensifies in the BRIC countries, notable for bribery and corruption. (shrink)

Despite many twenty-first century efforts to minimize corporate corruption, initiatives taken by local governments, global organizations, academic institutions, or the corporate world itself, it is clear that corporate corruption is perpetuating itself. In this paper, I apply the Aristotelian concept of “akrasia” (moral weakness) in order to provide an interpretation of corporate corruption as an act of moral failure and misapprehension of the right thing to do, if not an act of wickedness, which originates with lack of integrity. By utilizing (...) Aristotle’s philosophical framework, I attempt a redefinition of integrity not only with reference to the Aristotelian moral and intellectual virtues but also with a combination of theoretical and practical wisdom, that is, a connection between theory and action, definitive of moral consistency. Through this interpretation, I also wish to further emphasize the need for a philosophical background of contemporary managerial practices for a more effective countering of corporate corruption. (shrink)

"This book is a practical business guide for managers and executives covering bribery and FCPA compliance issues that they need to understand to ensure they are ...

Corporate social responsibility (CSR) is a relatively undeveloped concept despite its increasing importance to corporations. One difficulty is the possible inexactness of CSR. Another is the apparent reluctance by regulatory authorities and policy makers to intervene in the area. This is largely a result of inhibitions created by traditional approaches to company law with emphasis on shareholder protection and financial disclosure. The consequence is the stultification of independent development of CSR by tying social issues to financial performance. This attitude (...) might not be unconnected to the theoretical and practical challenges in justifying CSR and defining its scope. The underlying impediment is a factual and theoretical failure to distinguish ‘instrumental’ and ‘pure’ (ethical) CSR. This article demonstrates that ethical CSR highlights the role of regulation, and a principal stance is that regulation is neither incompatible nor irreconcilable with ethical CSR. The article argues that cognizance of the intrinsic moral justification of ‘pure’ CSR is required for delineating the scope of CSR as well as for clarifying the desirability and extent of its regulation. It argues that the dynamic history and visage of multinational corporate corruption illuminates the fluidity of the regulation–CSR relationship. The current and widening backlash against transnational corporate corruption is, arguably, a demonstration of the position that regulation and CSR are not mutually exclusive and absolute concepts. This article submits that recognition and application of this ‘ethical’ and ‘instrumental’ CSR distinction is fundamental to the development of CSR and resolution of connected questions of regulation. (shrink)

A by-product of the Watergate investigations into illegal political contributions and money-laundering was the revelation that American corporations had been making questionable payments to foreign officials to gain business advantages. That discovery was the driving force behind passage of the FCPA in 1977. Many since have complained that the law put American firms at a disadvantage in international trade. This paper assesses the credibility of that claim, as well as exploring the socioeconomic implications of corruption in a world of (...) intensifying international competition. Based on the literature review, examination of international trade data and intensive interviews with foreign firms doing business in Nigeria, the paper reaches the following conclusions:1. Enforcement of FCPA has waxed and waned, but there is no evidence that its enforcement has impeded the growth of U.S. trade. In fact, trade with countries previously considered "bribe prone" has out-paced the growth of trade with non-bribe-prone countries, despite FCPA. (shrink)

Thomas W. Dunfee, in addition to his many other contributions to business ethics literature, has generated a stream of research that attempts to tackle the issue of corruption. Dunfee's research on corruption includes three primary contributions: the introduction of "Integrative Social Contract Theory" which provides a normative theoretical framework by which to judge the morality of global business activity including corruption; the "C2 Principles", which outline specific content and implementation measures that corporations can voluntarily adopt to combat corruption; and (...) a normative evaluation of "guanxi," a concept which can lead to questionable corruption practices in China. The article will highlight Dunfee's contribution to the literature and suggest future research directions based on his academic work. (shrink)

Thomas W. Dunfee, in addition to his many other contributions to business ethics literature, has (along with several co-authors) generated a stream of research that attempts to tackle the issue of corruption. Dunfee's research on corruption includes three primary contributions: (1) the introduction of "Integrative Social Contract Theory" which provides a normative theoretical framework by which to judge the morality of global business activity including corruption; (2) the "C2 Principles" (Combating Corruption), which outline specific content and implementation measures that (...) class='Hi'>corporations can voluntarily adopt to combat corruption; and (3) a normative evaluation of "guanxi," a concept which can lead to questionable corruption practices in China. The article will highlight Dunfee's contribution to the literature and suggest future research directions based on his academic work. (shrink)

This study looks at how the corporate governance of family-owned business groups, the most dominant form of private sector organising in Asia, deals with different forms of corruption during the course of common business transactions. As a part of an ethnographic study conducted in 2007 to look at the impact of corporate governance reforms in the Philippines, one of the emergent themes from the study was the presence of significant corruption in the business environment of the country. A total of (...) 40 semi-structured interviews were conducted with board members from business groups and senior public sector officials supplemented by document analysis of media articles and other text and participant observation. Using Rose-Ackerman’s typology of petty and grand corruption, results show the dilemmas faced when trying to operate within the precepts of corporate governance whilst dealing with the practical reality of corruption in public sector institutions. The results of the study provide empirical evidence into corruption’s impact on Asian business groups and contribute to knowledge on the links between strong institutions and the efficacy of corporate governance. (shrink)

This study looks at how the corporate governance of family-owned business groups, the most dominant form of private sector organising in Asia, deals with different forms of corruption during the course of common business transactions. As a part of an ethnographic study conducted in 2007 to look at the impact of corporate governance reforms in the Philippines, one of the emergent themes from the study was the presence of significant corruption in the business environment of the country. A total of (...) 40 semi-structured interviews were conducted with board members from business groups and senior public sector officials supplemented by document analysis of media articles and other text and participant observation. Using Rose-Ackerman’s typology of petty and grand corruption, results show the dilemmas faced when trying to operate within the precepts of corporate governance whilst dealing with the practical reality of corruption in public sector institutions. The results of the study provide empirical evidence into corruption’s impact on Asian business groups and contribute to knowledge on the links between strong institutions and the efficacy of corporate governance. (shrink)

Corruption in business is as old as business itself. Corruption exists to some extent in all cultures, under all market systems and in all countries. The objectives of this paper are not to stand in judgement or to consider moral issues. This article considers the findings of a study concerning managerial attitudes towards corruption in business. The methodology involves a number of scenarios which could be construed as being deviant or dishonest. These are presented to respondents. Respondents are then asked (...) questions regarding each situation. The findings were interesting. While the sample in general condemned corruption and corruptive practices, the perceived participation by the peer group was higher than one would have expected. The findings of a more comprehensive study of a similar nature should be meaningful to corporate policy in this regard, not only in respect of corruption, but also when decisions have to be made regarding the receipt of gifts. (shrink)

Corporate abuse is a dehumanizing attitude built into the policies, structures and operations of a business. This text explains how this attitude is a natural outcome of the transition from a manufacturing to an information-based economy.

What is right in the corporation is not what is right in a man's home or in his church," a former vice-president of a large firm observes. "What is right in the corporation is what the guy above you wants from you." Such sentiments pervade American society, from corporate boardrooms to the basement of the White House. In Moral Mazes, Robert Jackall offers an eye-opening account of how corporate managers think the world works, and of how big organizations shape moral (...) consciousnss. Based on extensive interviews with managers at every level of two industrial firms and of a large public relations agency, Moral Mazes takes the reader inside the intricate world of the corporation. It is a world where hard work does not necessarily lead to success, but where sharp talk, self-promotion, powerful patrons, and sheer luck might; where intense competition is masked by cheerfully bland public faces; where intentions are cloaked and frankness is simply one of many guises; and where words are always provisional and accountability often depends on the ability to outrun mistakes. In this topsy-turvy world, managers must bring often unforgiving technology and always difficult people together to make money, an uncompromising task demanding continual compromises with conventional verities. Moral issues are translated into practical concerns and into issues of public relations. Sooner or later, managrs ask themselves: How does one act in such a world and maintain a sense of personal integrity? Moral Mazes is a brilliant, sometimes disturbing, often wildly funny study of corporate thinking, decision-making, and morality. It is an analytical work of great importance, one filled with compelling real life stories of the men and women charged with running the business of America. It is a book for anyone interested in how big organizations actually function, or who is concerned with the current moral malaise in our public life. (shrink)

High-profile corporate scandals earlier in this decade provoked outrage and legislative action; however, corporate executive-level ethical lapses continue to come to light. This article examines the work of Professor Dunfee and his coauthors on corruption, ethical leadership, and social contracts theory, and relates that literature to corrupt activities by corporate executives. Corruption is defined broadly to encompass executive self-dealing, which harms their firms. The specific example of stock options backdating is used to show the harmful impact on shareholders and (...) the lack of managerial integrity though consequentialist, deontological, and legal analysis, as well as a critique of the practice using social contracts principles. Ultimately, this article utilizes the insights of Dunfee and his coauthors, and the lessons from the backdating example, to propose a framework aimed at improving corporate governance and preventing future executive corruption. The framework includes a strategy of identification and prevention, employing detection and eradication mechanisms, and institutional learning from past instances of corporate corruption. (shrink)

Corruption within the private sector has often not been dealt with in Brazil. Organizations may find corrupt acts in its operations or practices, but specific concepts and programs to avoid them are neither concrete nor clear. Some Brazilian stockholders have become aware of the risks involved in unethical procedures and are adopting the Best Practices of Corporate Governance initiative. International agencies have intensively supported organizations and governments in an effort to define policies that inhibit illegal or (...) class='Hi'>corrupt cultural habits throughout the world, but Brazilian practitioners show insufficient response. Skepticism may indicate a lack of understanding about how an ethical leadership can guide employees, setting high standards for the organizational culture and climate, clearly defining limits of correct behavior, and creating appropriate codes of ethics. Transparency still has to be discovered as a significant tool to encourage professionalism in performance and reporting of data in Brazilian companies. In this article, we analyze the ethical behavior of the purchasing department of a multinational company in its host country, Brazil. It focuses specifically on the supplier–buyer relationship. The results indicate that despite the negative reputation Brazilians have in business ethics, a company can still develop a positive and ethical relationship with its stakeholders. Communication, transparency, compliance with the company’s code of conduct as well as the supplier’s awareness of the buyer’s code of conduct are the factors which influence the supplier–buyer relationship. Transparency can be used as a tool to reduce corruption, thereby increasing ethical behavior and company image. Good ethical behavior can help to build up a company’s image. (shrink)

The corporate meltdowns of this and the previous decade in the US - WorldCom, Enron, Tyco, and in Australia - FAI, HIH and AWB being among the many examples - have resulted in the governments of those two countries introducing legislation and policy guidelines aimed at minimising future corporate misbehaviour. -/- The US has introduced the Sarbanes Oxley Act, with requirements on corporate accountants and auditors, as well as its whistleblowing provisions. It has revised the Federal Sentencing Guidelines for Organizations. (...) New rules for the NYSE and NASDAQ have also been introduced. In addition, the U.S. Securities and Exchange Commission and U.S. Department of Justice have further strengthened the Foreign Corrupt Practices Act 1977, last revised in 1997. -/- Australia has revised the Corporations Act to include whistleblower protection clauses as well as adopted the ASX Corporate Governance guidelines. Standards Australia has issued its handbook on corporate governance. Although not a business issue, the Australian government has also announced that it will introduce whistleblower protection legislation for the public sector by the end of its first term in office. This legislation will likely influence whatever the private sector does in this respect. The inclusion of whistleblower protection in both Sarbanes–Oxley and the Corporations Act reflects a growing body of research that finds that people internal to an organisation are the most effective way to identify corporate wrongs. The Commonwealth Treasury has recently issued an options paper, stating that the Corporations Act has been ineffectual. It has sought submissions on revisions to the legislation that the Australian Government could take. This paper examines the policies advocated by over 20 organisations and academics concerned with whistleblowing issues. It draws the conclusion that on current indications, even after further reform, Australian legislation and policies are still likely to be less effectual than overseas practices. -/- --------------------------------- . (shrink)

Organizational corruption has recently attracted considerable scholarly attention, especially since its devastating effects following recent major corporate scandals, the worldwide economic crisis of 2009, and the current European Union monetary crisis. This paper is based on the analysis of three distinct, yet contextually related, case studies in a European Union member state: (a) an incident of corruption by a minister in an adjudicative role, (b) widespread financial misreporting and perjury within an organization, and (c) abuse of due process and obstruction (...) of justice by civil servants within a ministry. These cases serve to illustrate, for the first time, Aguilera and Vadera’s (in J Bus Ethics 77:431–449, 2008 ) framework of organizational corruption, which relates distinct types of a corrupter’s opportunity, motivation, and justification with the type of corruption present in the organization. Furthermore, the data suggest how the framework may be extended and reveal conceptual issues that require reconciliation. This study attempts such reconciliations and offers some suggestions on how the findings may be utilized by policy reformers or corruption controllers. (shrink)

This article discusses the effects of the OECD Convention on Combating the Bribery of Foreign Public Officials, which was signed in 1997 and is due to be implemented by the signatory nation‐states this year. The Convention represents the expansion of legal measures to combat the bribery of foreign public officials by individuals or corporations, and it has been accompanied by the Organisation of American States’ Convention Against Corruption. Previously the Foreign Corrupt Practices Act (FCPA), which applied only (...) to United States individuals or corporations, ‘stood alone in the world as a legal barrier to transnational bribery’ (Low, Bjorklund and Atkinson 1998:245). This article proceeds in stages to evaluate implications of the Convention. Firstly the Convention is placed in the context of the increased focus on transnational business bribery in recent years. Second, the main points of the Convention are outlined. Third, the issues and problems posed by the Convention for business are discussed. Finally some themes regarding enforcement by the relevant authorities are outlined. (shrink)

This article discusses the effects of the OECD Convention on Combating the Bribery of Foreign Public Officials, which was signed in 1997 and is due to be implemented by the signatory nation‐states this year. The Convention represents the expansion of legal measures to combat the bribery of foreign public officials by individuals or corporations, and it has been accompanied by the Organisation of American States’ Convention Against Corruption. Previously the Foreign Corrupt Practices Act , which applied only (...) to United States individuals or corporations, ‘stood alone in the world as a legal barrier to transnational bribery’ . This article proceeds in stages to evaluate implications of the Convention. Firstly the Convention is placed in the context of the increased focus on transnational business bribery in recent years. Second, the main points of the Convention are outlined. Third, the issues and problems posed by the Convention for business are discussed. Finally some themes regarding enforcement by the relevant authorities are outlined. (shrink)

Over the past decade, we have witnessed some early signs of progress in the battle against international bribery and corruption, a problem that throughout the history of commerce had previously been ignored. We present a model that we then use to assess progress in reducing bribery. The model components include both hard law and soft law legislation components and enforcement and compliance components. We begin by summarizing the literature that convincingly argues that bribery is an immoral and unethical practice and (...) that the economic harm it causes falls most heavily on those least able to absorb it. The next section summarizes the main provisions of anti-bribery legislation including the Foreign Corrupt Practices Act (FCPA), the Organization for Eco nomic Development's Convention on Combating Bribery of Foreign Officials in International Business Transactions, the United Nations Convention Against Corruption and the laws of selected countries. We conclude this section with a discussion of the "moral imperialism" argument for not imposing Western laws and values on other cultures. The next section focuses on the roles played by NGOs including Transparency International (TI), the World Economic Forum (WEF), and the International Chamber of Commerce. We review trends in enforcement and prosecution, including a review of the United States' enforcement processes, mechanisms for cross-border legal assistance, a discussion of the distinctive nature of FCPA cases, and an assessment of what the future holds for enforcement. The final section focuses on compliance processes for corporations aimed at reducing the risk of FCPA and related violations. This section also addresses the ethics of gift giving and "grease" payments. The article concludes with a summary and suggestions for further research. Throughout the article, we reference important bribery cases and include comments from several authorities who are on the front lines of the battle against international bribery. (shrink)

Although US and European research has documented improvement in earnings quality associated with corporate governance characteristics, the situation in Latin America is questionable, given the business environment in which firms operate, which is characterized by controlling family ownership and weak legal protection. The purpose of this study is to examine the relation between the internal mechanisms of Corporate Governance and Earnings Management measured by discretionary accrual. We use a sample of listed Latin American non-financial companies from the period 2006–2009. Our (...) results show how in the Latin American context the role of external directors is limited and that Boards which meet more frequently take a more active position in the monitoring of insiders, so showing a lower use of manipulative practices. In addition, we find a non-linear relation between insider ownership and discretionary accruals, also pointing to the fact that ownership concentration may be a manipulative practices constrictor mechanism only when the ownership of main shareholders is moderate. The findings have important policy implications since this is, to the best of our knowledge, the first study to analyze the relation between the effectiveness of the government and the earnings management behavior. As policy implications, we document how when a country implements controls aimed at reducing corruption, strengthening the rule of law or improving the effectiveness of government, this leads to a reduction in firm earnings management. (shrink)

We test the hypothesis that US corporations headquartered in states with greater public corruption are also prone to more unethical behavior when operating abroad. We exploit passage of Foreign Corrupt Practices Act that curtailed bribery of foreign officials and find firms in corrupt states, especially those exporting to more corrupt countries, suffer greater performance decline following FCPA, suggesting larger loss from anticipated bribery restrictions. Controlling for industry, firms in corrupt states are more likely to (...) be targets of FCPA enforcement actions. They are also more likely to have paid foreign bribes, as disclosed during pre-FCPA investigations. (shrink)

Using a general model of corruption that explains and accounts for corruption across different corporate and professional activities, the paper will examine how certain practices in the media, especially in areas where journalism, advertising and public relations regularly intersect and converge, can be construed as instances of corruption. By applying this general model of corruption the paper will then offer a taxonomy of media corruption by identifying most if not all the major types of media corruption. It will be (...) argued that such corruption is regular and systematic. (shrink)

The dramatic increase in the number of corporate ethical codes over the past 20 years has been attributed to the Watergate scandal and the Foreign Corrupt Practices Act. Ethical codes differ somewhat from profesional codes and mission statements; yet the terms are frequently interchanged and often confused in the literature. Ethical code studies are reviewed in terms of how codes are communicated to employees and whether implications for violating codes are discussed. Most studies use content analysis to determine (...) subjects in codes. Little information is available about how codes are communicated, whether they are accepted and used by employees, and whether they affect employee/corporate behavior. More research on ethical codes is needed to answer some of these questions. (shrink)

This book provides an applied model of corruption to identify, analyse, and assess the ethics of major types of corruption in the media involving practices such as cash-for-comment, media release journalism, including video news releases, fake news, deep fakes, and staged news. The book starts with a conceptual philosophical analysis of corruption in general, followed by an in-depth analysis of media corruption, across its various transformations, from the legacy media of the 4th Estate to the digital media of the (...) 5th Estate to the Network Media of the 6th Estate, and provides key case studies as practical illustrations and contextualisation of those major types of media corruption. It explains how the conversion of the two forms of media communication, corporate and social digital communication, as expressed in the symbiotic relationship between the 4th Estate and the 5th Estate exposes and enables the reporting of corruption, signalling a major shift in the way the media itself can provide an effective means for anti-corruption measures against major practices of corruption that would have otherwise gone unnoticed. (shrink)

Recent calls in the corporate social reporting (CSRep) literature have emphasized the importance of giving voice to non-managerial stakeholder groups in the social reporting process. The research, presented in this paper, employs recent work in stakeholder theory and CSRep to examine the perceptions of a diverse set of non-managerial stakeholders in the context of a developing country, Bangladesh. A series of semistructured interviews were conducted with individuals who identify with various non-managerial stakeholder groups. Interviewees generally believed that the motivation and (...) practice of CSRep in Bangladesh is developing in response to pressures from international markets and is producing largely cosmetic responses. Also, they expressed concerns that, given the economic, political, and social conditions in Bangladesh, premature adoption of strict CSRep standards may lead to increased corruption and other unintended consequences. Whilst some of the interviewees sharply criticized the current process of imposing social accounting codes/standards on developing countries which fail to consider the important local socio-economic context, the findings suggest that there is overwhelming support for mandatory externally verified CSRep based on the principles of peoples' right to know, full disclosure/completeness, and relevance, which are anchored in the broader principles of transparency and stakeholder accountability. (shrink)

Recent scandals involving executive leadership have significantly contributed to the topic of corporate social responsibility (CSR) becoming one of the most important concerns of the management literature in the twenty-first century. The antithesis of CSR is embodied in executive corruption and malfeasance. Unfortunately such things are all too frequent. We view the degree of centrality of leadership, and the primary power motivation of leaders, as key factors that influence the engagement in corruptive leader behavior and consequent corporate social ir-responsibility (CSIR) (...) in organizations. Shared and self-leadership, on the other hand, we introduce as alternatives to traditional top-down centralized views of leadership that can establish needed checks and balances capable of reducing corruptive tendencies. We offer a conceptual model along with several propositions to help guide future research and practice. (shrink)

Considering the lack of substantive scientific or theoretical studies about ethics in small and medium sized enterprises (SMEs) in Latin America, this paper examines the context of an existent paradox, based upon the perspective of experts and academicians of Latin America and the Caribbean. These countries live different realities, due to their respective European cultural influences, as well as to racial and economic issues. Such facts impact the size and characteristics of their industries. On the other hand, the SMEs face (...) more similarities in the region, so they will be treated as a group in the discussion of ethics and corporate social responsibility (CSR) in Latin American SMEs. As this topic has not been sufficiently investigated in this geographic area, the objective of this exploratory study is to offer a contribution for future research. It raises the main dilemmas and intends to explain how legislation and common practices enable and perhaps lead SMEs to choose unethical strategies to survive and compete in the market. These enterprises are growing in number and in job creation, but do not participate in the Gross National Product in the same proportion. Informality, tax evasion and corruption are gradually caused or erode morality in business, but can contribute to corporate social responsibility in the region. The paper tries to show positive and negative aspects of apparently unethical practices and discusses challenging ways to solve complex problems that are common in most Latin America. (shrink)

This paper explores the growing array of initiatives aimed at creating corporate accountability with the goal of attempting to uncover the foundation principles that underlie them and create a floor below which practices are ethically questionable. Using the Global Compact's nine principles and the work of Transparency International as guides, foundational principles seem to exist in the areas of human rights, labor standards, environment, and anti-corruption initiatives.

In the current study, we examine the changes in disclosure practices on compliance and the fight against corruption at Siemens AG, a large German multinational corporation, over the period 2000–2011 during which a major corruption scandal was revealed. More specifically, we conduct a content analysis of the company’s annual reports and sustainability reports during that period to investigate the changes of Siemens’ corruption and compliance disclosure using both quantitative and qualitative methods. Through the lens of legitimacy theory, stakeholder analysis, (...) and organizational façades, we find evidence that Siemens changed its compliance and corruption disclosure practices to repair its legitimacy in the wake of the 2006 corruption scandal. We analyze these strategies more closely by using the rational, progressive, and reputation façades framework. Our primary findings suggest that the annual reports show peaks of disclosure amounts on corruption and compliance disclosures earlier than sustainability reports, which can be partly explained by analyzing the disclosures made about—and to—the different stakeholder groups. We find that the annual report focuses more on internal stakeholders such as employees, while the sustainability report focuses more on external stakeholders such as suppliers. We also find that the company uses the façades differently depending on which report is being analyzed. (shrink)

Recent calls in the corporate social reporting literature have emphasized the importance of giving voice to non-managerial stakeholder groups in the social reporting process. The research, presented in this paper, employs recent work in stakeholder theory and CSRep to examine the perceptions of a diverse set of non-managerial stakeholders in the context of a developing country, Bangladesh. A series of semi-structured interviews were conducted with individuals who identify with various non-managerial stakeholder groups. Interviewees generally believed that the motivation and practice (...) of CSRep in Bangladesh is developing in response to pressures from international markets and is producing largely cosmetic responses. Also, they expressed concerns that, given the economic, political, and social conditions in Bangladesh, premature adoption of strict CSRep standards may lead to increased corruption and other unintended consequences. Whilst some of the interviewees sharply criticized the current process of imposing social accounting codes/standards on developing countries which fail to consider the important local socio-economic context, the findings suggest that there is overwhelming support for mandatory externally verified CSRep based on the principles of peoples’ right to know, full disclosure/completeness, and relevance, which are anchored in the broader principles of transparency and stakeholder accountability. (shrink)

We examine the relationship between Japanese foreign direct investment (FDI) and the national corporate responsibility (NCR) environment in host countries using corporate social responsibility and international business theories. Based on data from the Japanese Government’s Ministry of Finance AccountAbility, and other sources, we find that the level of NCR has a positive relationship with FDI inflow for developing countries. The relationship for developed countries is negative but not statistically significant. The underlying host country development stage moderates the relationship. The results (...) can help deepen understanding of FDI behaviors and have practical implications for host countries in terms of attracting FDI. (shrink)

The way things are supposed to be : reputational theory and its demise -- Thriving the new way : with little or no reputation : the Goldman Sachs story -- The way things used to be : when reputation was critical to survival -- Individual reputation unhinged from the firm : hardly anybody goes down with the ship -- Proof in the pudding : Michael Milken, Junk Bonds, and the decline of Drexel and -- Nobody else -- The new, post-reputation (...) Wall Street : accounting firms -- The new, post-reputation Wall Street : law firms -- The new, post-reputation Wall Street : credit rating agencies -- The new, post-reputation Wall Street : stock exchanges -- The SEC and reputation -- The SEC : captured and quite happy about it -- Where we are and where we are headed : a conclusion of sorts -- Index. (shrink)

Argues that many corporate executives have destroyed the value of their companies, cheated stockholders, employees, and the public, and compromised the integrity of financial markets and accountants while enriching themselves.

This book examines the relationship between organizational culture and ethical practices among NGOs in Kenya. It highlights the need for greater oversight and anti-corruption policies to better control corrupt practices from within and avoid adverse implications and financial effects due to a lack of accountability and unethical behaviors.

ABSTRACTThis study examines whether a firm's ownership form has any influence on its social performance. Conventional wisdom suggests that public corporations are more susceptible to corruption and socially irresponsible behavior than privately owned corporations because of the intense short‐term profit maximization pressure from shareholders and the lack of sufficient monitoring mechanisms. This study introduces an alternate perspective in thinking about the relationship between ownership form and corporate social responsibility. This study reasons that public corporations are more likely (...) to become socially responsible because of their greater exposure to external influence and greater dependence on external actors with diverse interests. Using a panel data on the pollution management practices of 118 industrial facilities over a 13‐year period, this study shows that public corporations were indeed subject to greater external pressure to reduce pollution, and the pressure led to consistently stronger environmental performance. (shrink)

Die letzte Finanzkrise mit ihren gravierenden Auswirkungen auf die Weltwirtschaft fuhrt vor Augen: Der globale Finanzmarkt hat sich von der Realwirtschaft weitgehend losgekoppelt. Um solche Krisen in Zukunft zu verhindern, gilt es, die Finanzmarkte an der menschengerechten Gestaltung des Globalisierungsprozesses wirksam zu beteiligen und damit gesellschaftlich einzubinden. Dies wurde nicht nur der zusammenwachsenden Weltgemeinschaft, sondern auch der Effizienz des globalen Finanzmarktes dienen. Zu einer Globalisierung der Menschenrechte hat die Finanzindustrie einen entscheidenden Beitrag zu leisten. Mit dieser Zielsetzung ist in theologischer (...) Perspektive eine Wirtschaftsethik als Ethik der Anreizstrukturen fur Unternehmen und Unternehmer in der Finanzbranche zu entwickeln. Welche Rolle kommt dabei den institutionellen Investoren, den viel geschmahten Hedgefonds, den Rating-Agenturen, den Banken, der Bankenaufsicht und den grossen internationalen Finanzinstitutionen zu? Die Reform der Finanzmarkte muss innerhalb der Wirtschaftsstrukturen selbst beginnen, wenn der Nationalstaat nicht zum allmachtigen Regulierer verkommen soll. (shrink)

Human rights imply duties. The question is, duties for whom? Without a well-defined scheme for assigning duties correlative to human rights, these rights remain illusory. This paper develops core elements of a general scheme of duty assignment and studies the implications for corporations. A key distinction in such an assignment is between unconditional and conditional duties. Unconditional duties apply to every agent regardless of the conduct of others. Conditional duties reflect a division of moral labour where different tasks are (...) assigned to specific agents, whose default activates back-up duties of other agents. Corporations face unconditional duties to not directly violate the rights of others, and not undermine the division of moral labour through practices such as tax evasion or corruption. Being unconditional, these duties cannot be deviated from by reference to the misconduct of competitors. In addition, corporate conditional duties to protect, promote or fulfil rights can be activated if the state and other designated duty-bearers fail to discharge their duties. (shrink)

Although corruption is ubiquitous, attitudes toward it differ among countries. Until the 1997 OECD Convention, the U.S. had been one of the only two countries with an explicit extraterritorial anti-bribery law, the Foreign Corrupt Practices Act (FCPA) of 1977. The FCPA employs a two-pronged approach to control the supply side of corruption: (1) anti-bribery provisions; and (2) accounting (books and record and internal controls) provisions. I offer evidence, albeit indirect, to show that the FCPA had limited success. The (...) OECD Convention adopts the same two-pronged approach, but, since it is a multilateral treaty, is likely to be more successful provided that enforcement is vigorous enough. The signatory nations effectively form a cartel to reduce the cost of doing business. As with any cartel, however, each multinational corporation has an incentive to deviate. Thus, the mutual enforcement of the agreement is crucial for its success. However, the two-pronged approach is not sufficient, since internal control does not adequately monitor decisions made at the top level. I argue that the two lessons drawn from the U.S. experience are: (1) law enforcement must be credible; and (2) internal controls alone are not sufficient. Stronger and more effective corporate governance within an appropriate regulatory framework is needed to ensure that multinational corporations conduct their business in an ethical manner. (shrink)

On pouvait croire que le vampirisme des entreprises camerounaises se limitait aux seules activités économiques ou à leur rapport avec l'Etat, mais, en réalité, elles vont plus loin, jusqu'à aspirer la richesse des populations qui sont expropriées de leurs terres et de leurs ressources. Quand bien même ces populations sont embauchées dans ces entreprises, elles sont traitées avec mépris et perçoivent des salaires dérisoires. Le compte-rendu des ressources exploitées est falsifié, les engagements vis-à-vis de ces populations par rapport à leurs (...) ressources exploitées ne sont pas souvent tenus. Au vu de ce qui précède, les questions que l'on est en droit de se poser sont les suivantes : comment sauver l'entreprise au Cameroun de la menace du vampirisme qui plane sur elle? Comment parvenir à l'émergence, tant souhaitée et martelée à coups de slogans, si les entreprises mêmes qui bénéficient de tous les avantages fiscaux et de toutes sortes d'exonérations sont celles-là mêmes qui sont les moins disposées à la révolution? Ce livre est la première publication d'un auteur qui compte plus d'un manuscrit dans ses tiroirs. Il y décrit tout en la décriant la situation dans laquelle des entreprises sans scrupules mettent en péril le projet d'émergence du Cameroun. (shrink)

The practice of philanthropy, which releases private property for public purposes, represents in many ways the best angels of our nature. But this practice's noteworthy virtues often obscure the fact that philanthropy also represents the exercise of private power. In The Tyranny of Generosity, Theodore Lechterman shows how this private power can threaten the foundations of a democratic society. The deployment of private wealth for public ends may rival the authority of communities to determine their own affairs. And, in societies (...) characterized by wide disparities in wealth, philanthropy often combines with background inequalities to make public decisions overwhelmingly sensitive to the preferences of the rich. Allowing private wealth to dictate social outcomes collides with core commitments of a democratic society, a society in which people are supposed to determine their common affairs together, on equal terms. But why exactly is democracy valuable? How should these values be weighed against the liberty of donors and the many social benefits that philanthropy promises? Lechterman explores these questions by examining various topics in the practice of philanthropy: the respective roles of philanthropy and government, public subsidies for private giving, the use of donations for political speech, instruments of perpetual giving, the rise in giving by commercial corporations, and effective altruism as a guide for individual giving. These studies build to a surprising conclusion: realizing the democratic ideal may be impossible without philanthropy--but making philanthropy safe for democracy also requires fundamental changes to policy and practice. (shrink)

The quest for integrity in business is not only a reaction against malfeasance in business and associated calls for reform, but also a result of changes and new demands in the global business environment as well as the latest economic crisis. Among the sources of these new demands are the expectations of stakeholders that corporations and their leaders will take more active roles as citizens within society and in the fight against some of the most pressing problems in the (...) world, such as poverty, environmental degradation, defending human rights, corruption, and pandemic diseases. This topical and much needed book constitutes an important part of the debate on the best practices for ensuring integrity in an organizational context. (shrink)

Many U.S. corporations and the goods they produce negatively impact our society without breaking any laws. We are all too familiar with the tobacco industry's effect on public health and health care costs for smokers and nonsmokers, as well as the role of profit in the pharmaceutical industry's research priorities. It's Legal but It Ain't Right tackles these issues, plus the ethical ambiguities of legalized gambling, the firearms trade, the fast food industry, the pesticide industry, private security companies, and (...) more. Aiming to identify industries and goods that undermine our societal values and to hold them accountable for their actions, this collection makes a valuable contribution to the ongoing discussion of ethics in our time. This accessible exploration of corporate legitimacy and crime will be important reading for advocates, journalists, students, and anyone interested in the dichotomy between law and legitimacy. Nikos Passas is Professor in the College of Criminal Justice at Northeastern University. Neva Goodwin is Co-director of the Global Development and Environment Institute at Tufts University. (shrink)

„Krumme Touren“ in der Wirtschaft werden in der aktuellen Debatte oft bemängelt. Doch wer zieht die Grenzlinie zwischen legitimem und illegitimem Verhalten von Unternehmern und Firmen? Diese Fragestellung verfolgen die Autoren des Bandes anhand von europäischen Beispielen aus dem 19. und 20. Jahrhundert. Dabei zeigt sich, dass unternehmerische Handlungsnormen weder konstant noch unumstritten waren. Die Beiträge richten den Blick auf öffentliche Kritik und Skandale, Gerichtsprozesse, unternehmerische Selbstregulierung und staatliche Maßnahmen. Dabei tritt ein Spannungsverhältnis zwischen dem Prinzip der Gewinnmaximierung einerseits und (...) Werten wie Gemeinwohl, Transparenz oder politischen Idealen andererseits zutage. (shrink)

: This paper argues that three salient corrupt practices that mark contemporary Chinese health care, namely the over-prescription of indicated drugs, the prescription of more expensive forms of medication and more expensive diagnostic work-ups than needed, and illegal cash payments to physicians—i.e., red packages—result not from the introduction of the market to China, but from two clusters of circumstances. First, there has been a loss of the Confucian appreciation of the proper role of financial reward for good health (...) care. Second, misguided governmental policies have distorted the behavior of physicians and hospitals. The distorting policies include (1) setting very low salaries for physicians, (2) providing bonuses to physicians and profits to hospitals from the excessive prescription of drugs and the use of more expensive drugs and unnecessary expensive diagnostic procedures, and (3) prohibiting payments by patients to physicians for higher quality care. The latter problem is complicated by policies that do not allow the use of governmental insurance and funds from medical savings accounts in private hospitals as well as other policies that fail to create a level playing field for both private and government hospitals. The corrupt practices currently characterizing Chinese health care will require not only abolishing the distorting governmental policies but also drawing on Confucian moral resources to establish a rightly directed appreciation of the proper place of financial reward in the practice of medicine. (shrink)