corruption : the international evolution
CASE N°2
« Corruption: The international evolution of new management challenges “
School year 2013 - 2014
Introduction
Since the phenomenon of globalization, companies that decided to broaden their horizons have to face multiple challenges and their management functions need some adaptations. While going abroad, companies may become concerned with the subject of corruption that makes the business with foreign countries even more complicated. Even if there is a willingness to fight and reduce the corruption across the world, companies must be aware that this subject exists and must take it into account while dealing with foreign companies, their efforts to understand and adapt to local corruption influencing their success of failure.
Analyse the causes of corruption. Why has corruption been greater in countries with extensive government regulation? Will a shift to free markets inevitably reduce corruption?
Many authors tried to understand the subject of corruption and its causes. Among them, the government weaknesses or shortcoming may lead to higher corruption since companies are not afraid of being apprehended (David Conklin, 2009). Besides, government officials with low wages and low educational levels will be more likely to accept illegal payments to survive but also because they do not realize the consequences for the nation’s economic development (David Conklin, 2009). Other reasons are given by the author like the widespread poverty, the possession of major reserves of natural resources, as being likely to influence positively the corruption. On top of that, the current literature identified a linear relationship between corruption and government regulations (Naved Ahmad, 2002) and it seems that higher degree of government regulations leads to higher levels of corruption. This is easily understandable. The more the companies need the intervention of the government to run a business (licenses and permits, control over procurement, contracts,
« Corruption: The international evolution of new management challenges “
School year 2013 - 2014
Introduction
Since the phenomenon of globalization, companies that decided to broaden their horizons have to face multiple challenges and their management functions need some adaptations. While going abroad, companies may become concerned with the subject of corruption that makes the business with foreign countries even more complicated. Even if there is a willingness to fight and reduce the corruption across the world, companies must be aware that this subject exists and must take it into account while dealing with foreign companies, their efforts to understand and adapt to local corruption influencing their success of failure.
Analyse the causes of corruption. Why has corruption been greater in countries with extensive government regulation? Will a shift to free markets inevitably reduce corruption?
Many authors tried to understand the subject of corruption and its causes. Among them, the government weaknesses or shortcoming may lead to higher corruption since companies are not afraid of being apprehended (David Conklin, 2009). Besides, government officials with low wages and low educational levels will be more likely to accept illegal payments to survive but also because they do not realize the consequences for the nation’s economic development (David Conklin, 2009). Other reasons are given by the author like the widespread poverty, the possession of major reserves of natural resources, as being likely to influence positively the corruption. On top of that, the current literature identified a linear relationship between corruption and government regulations (Naved Ahmad, 2002) and it seems that higher degree of government regulations leads to higher levels of corruption. This is easily understandable. The more the companies need the intervention of the government to run a business (licenses and permits, control over procurement, contracts,
Bibliography: Ahmad N. (2002). Corruption and Government Regulations : An Empirical Analysis. The Bangladesh Development Studies , Vol. 28, No. 4 pp. 29-51. Briscoe D., Schuler R., Tarique I., (2011). Internatonal Human Resource Management : Policies and Practices for Multinational Entreprise. Madani D., Licetti M. (2010). Business regulation, reform and corruption. The World Bank, PREM notes, number 155. Taylor&Francis.Conklin D. (2009). Corruption : the international evolution of new management challenges. Richard Ivey School of Business. Transparency International (2013). Politics and government Retrieved october 30, 2013 from http://www.transparency.org/topic/detail/politics_and_government Warner C. (2007). Globalization and Corruption. The Blackwell Companion to Globalization. Ritzer, George (ed). Blackwell Publishing,. Blackwell Reference Online. 04 November 2013http://www.blackwellreference.com/subscriber/tocnode.html?id=g9781405132749_chunk_g978140513274934