Corruption continues to be a considerable challenge for internationally active companies. In this article, we examine personal and socioenvironmental antecedents of corrupt behavior in organizations. In particular, we aim to illuminate the links between Machiavellianism, on-the-job experience with corrupt behavior at work, neutralization, and the attitude of business professionals toward corruption. The empirical analysis is based on the responses of 169 professionals. At first, a positive relationship between both Machiavellianism and on-the-job experience and the acceptance of corruption appears in the (...) model. However, an in-depth mediation analysis shows that neutralization is the keystone linking both Machiavellianism and on-the-job experience to the likelihood to condone corruption. Based on these results, we offer avenues for further research and implications for practitioners. (shrink)

Despite the increasing inclusion of ethics and compliance issues in corporate training, the business world remains rife with breaches of responsible management conduct. This situation indicates a knowledge–practice gap among professionals, i.e., a discrepancy between their knowledge of responsible management principles and their behavior in day-to-day business life. With this in mind, this paper addresses the formative, developmental question of how companies’ ethics and compliance training programs should be organized in a manner that enhances their potential to be effective. Drawing (...) on both the qualitative analysis of existing ethics and compliance training and the conceptual literature on behavioral ethics, a framework is proposed that consecutively aligns various types of training into a comprehensive ethics and compliance training program. The strengths and limitations of the suggested framework are discussed. (shrink)

The academic literature has viewed drivers of corruption in isolation and, consequently, failed to examine their synergistic effect. Such an isolated view provides incomplete information, leads to a misleading conclusion, and causes great difficulty in curbing corruption. This paper conducts a systematic literature review to identify the drivers of corruption in the construction industry. Subsequently, it develops a system dynamics (SD) model by conceptualizing corruption as a complex system of interacting drivers. Building on stakeholder and open systems theories, the proposed (...) SD model shows how the complex reinforcing relationship between authoritative, organizational, cultural, and financial drivers of corruption further increases corrupt practices. The new model also provides lessons that can be helpful in the development of policy frameworks to control corruption in the construction industry. To achieve success in the fight against corruption, the findings of this research suggest that (1) corruption must be understood at both the organizational and state levels, (2) anticorruption practices must be informed by ethically grounded stakeholder management strategies, and (3) anticorruption reforms must go hand-in-hand with strategies to tackle the economic downturn. (shrink)

In recent years, trade-control laws and regulations such as embargoes and sanctions have gained importance. However, there is limited empirical research on the ways in which small- and medium-sized enterprises (SMEs) respond to such coercive economic measures. Building on the literature on organizational responses to external demands and behavioral ethics, this study addresses this issue to better understand how external pressures and managerial decision-making are associated with the scope of trade-control compliance programs. Based on a sample of 289 SMEs, the (...) findings show that the organizational responses of SMEs reflect proportionate adjustments to regulatory pressures but only if decision-makers are well informed and aware of the prevailing rules and regulations. Conversely, uninformed decision-making leads to a disproportionate response resulting in an inadequately reduced scope of the compliance program. In addition, the results indicate that SMEs that are highly integrated into supply chains are susceptible to passing-the-buck behavior. (shrink)

Business and Society Review, Volume 127, Issue 1, Page 69-96, Spring 2022.

Motivated by the increasing economic significance of investment advisory industries and the prevalence of wrongdoing in financial planning services, we examine whether, and to what extent, employee misconduct is shaped by their local corruption culture. Using novel data of more than 4.7 million adviser-year observations of financial advisers and the Department of Justice’s data on corruption, we find that financial advisers and advisory firms located in areas with higher levels of corruption are more likely to commit misconduct. These results hold (...) for both individual advisor and firm level analyses and are robust to the use of various fixed effects, model specifications, proxies for corruption and misconduct, and an instrumental variable approach. Using the passage of the Dodd-Frank Whistleblower Provision, which provides incentives for reporting corruption incidences and thereby reduces the incentives for fraud, we find that the relation between local corruption culture and adviser misconduct is attenuated after the provision enacted by the SEC. Overall, our study highlights the externalities of corruption culture on individual ethics and the essential role of whistleblowing laws in reducing corruption-prone norms. (shrink)

This study explores the micro-determinants of corruption tolerance among 1414 university students in Guatemala, a country grappling with significant corruption issues. By examining the attitudes of economics majors compared to students in other disciplines through ordered logistic regression analysis, we offer new insights into factors influencing corruption tolerance in a developing country setting. This approach, by focusing on a developing country, fills a research gap in the literature on the differences between economics students and their peers from other programs. We (...) find that economics students exhibit a greater tolerance for corruption. This result aligns with theories and research that suggest that economists show a profit-maximizing mindset, and distinctive values and fairness perceptions. Furthermore, our analysis reveals significant effects of gender and age on corruption tolerance, with women and older students reporting lower tolerance to corrupt practices. The study also uncovers the higher tolerance towards private versus public corruption. These findings provide valuable guidance for developing policies and educational initiatives to reduce corruption tolerance among future professionals in similar socio-economic environments. (shrink)

Corporate anti-corruption initiatives can make a substantial contribution towards curtailing corruption and advancing efforts to achieve the United Nations’ Sustainable Development Goals. However, researchers have observed that underdeveloped assumptions with respect to the conceptualization of corruption and how firms respond to corruption risk impeding the efficacy of anti-corruption programs. We investigate the relationship between the perceived level of corruption in foreign host countries and the organizational structure of subsidiary operations established by multinational corporations. Foreign host market corruption is disaggregated into (...) two components—private and public corruption. We employ an uncertainty-based perspective grounded in transaction cost theory to focus upon the distinct mechanisms through which private and public corruption can each be expected to impact a foreign subsidiary’s organizational structure [wholly-owned subsidiary or a joint venture with a local partner]. We expect that each type of corruption fosters a different type of uncertainty which predominates in shaping the MNC’s choice of foreign subsidiary investment structure. Hypotheses are developed and tested with a sample of 187 entries into 19 foreign host markets. Each type of corruption was found to exert a distinct effect upon the organizational structure of foreign subsidiaries. More precisely, while heightened perceived levels of public corruption were found to motivate MNCs to invest through a JV with a local partner rather than a WOS, more pronounced private corruption precipitated the opposite outcome. (shrink)