Globalization has increased the need for managers (and future managers) to predict the potential for country corruption. This study examines the relationship between Hofstede''s cultural dimensions and how country corruption is perceived. Power distance, individualism and masculinity were found to explain a significant portion of the variance in perceived corruption. A significant portion of country''s risk, trade flow with U.S.A., foreign investment, and per capita income was explained by perceived corruption.

The cases of corruption reported by the media tend almost always to involve a private party (a citizen or a corporation) that pays, or promises to pay, money to a public party (a politician or a public official, for example) in order to obtain an advantage or avoid a disadvantage. Because of the harm it does to economic efficiency and growth, and because of its social, political and ethical consequences, private-to-public corruption has been widely studied. Private-to-private corruption, by contrast, has (...) been relatively neglected and only recently has started to receive the attention it deserves. The purpose of this paper is to offer some thoughts on the nature and importance of private-to-private corruption; the legal treatment it receives in some of the world''s leading countries; and the measures that companies can take to combat it, with special consideration of its ethical aspects. (shrink)

We analyze ethical policies of firms in industrialized countries and try to find out whether culture is a factor that plays a significant role in explaining country differences. We look into the firm’s human rights policy, its governance of bribery and corruption, and the comprehensiveness, implementation and communication of its codes of ethics. We use a dataset on ethical policies of almost 2,700 firms in 24 countries. We find that there are significant differences among ethical policies of firms headquartered in (...) different countries. When we associate these ethical policies with Hofstede’s cultural indicators, we find that individualism and uncertainty avoidance are positively associated with a firm’s ethical policies, whereas masculinity and power distance are negatively related to these policies. (shrink)

The aim of this work is to analyse the influence of sociocultural factors on corruption levels. Taking as starting point Husted (J Int Bus Studies 30:339–359, 1999) and Graeff (In: Lambsdorff J, Taube M, Schramm M (eds) The new institutional economics of corruption. Routledge, London, 2005) proposals, we consider both the interrelation between cultural dimensions and the diverse expressions of social capital with corruption. According to our results, the universalistic trust (linking and bridging social capital) constitutes a positive social capital (...) that is negatively linked to corruption. In contrast, the particularistic levels of trust (bonding) can constitute a negative social capital directly related to corruption levels. Furthermore, cultures which are favourable to the legitimation of dependency relations and the formation of closed particularistic groups (power-distance and community factors) create a breeding ground for the development of these amoral rent-seeking structures. (shrink)

. This paper explores the relationship between gift giving, guanxi and corruption through a study of the relationships between UK manufacturing companies in China and their local component suppliers. The analysis is based on interviews in the China-based operations of 49 UK companies. Interviews were carried out both with senior (often expatriate) staff and with local line managers who were responsible for everyday purchasing decisions and for managing relationships with suppliers. The results suggest that gift giving is perceived to be (...) a significant problem in UK-owned companies in China. However the relationship between these payments and established understanding of gift giving within guanxi-networks appears to be weak. Gift giving appears to be associated with illicit payments, corruption and the pursuit of self-interest. Firms seek to reduce the incidence of illicit transactions by changing staff roles, instituting joint responsibilities, which include the separation of different aspects of sourcing/purchasing, ineasing the involvement of senior staff in the process and through the education of employee and suppliers. (shrink)

This study builds upon the top management literature to predict and test antecedents to firms’ engagement in corruption. Building on a survey of 341 executives in India, we find that if executives have social ties with government officials, their firms are more likely to engage in corruption. Further, these executives are likely to rationalize engaging in corruption as a necessity for being competitive. The results collectively illustrate the role that executives’ social ties and perceptions have in shaping illegal actions of (...) their respective firms. (shrink)