MNEs encountering Corruption within the BRIC-countries : Combining a neglected complexity and moral reevaluation to a new perspective on the phenomenon 

University essay from Umeå universitet/Företagsekonomi; Umeå universitet/Företagsekonomi

Abstract: The awareness about corruption has distinctly risen since the 1990s. In line with this many anti-corruption approaches arose initiated by the international community. This ranged from international legislation, initiatives by international institutions as Transparency International as well as strategic efforts on corporative levels as given with the appearance of Code of Conducts. However, the phenomenon appears to be of stable nature, which clearly impacts international business. Globalisation brings companies from less corrupt countries, unexperienced with its dimensions and handling, in frequent contact with business environments being highly dominated by corruption. Due to this, we find it to be a topic of importance and high relevance for almost any multinational business actor. Within the business related research field of corruption, we identified three research gaps. Firstly, the investigation of the supply-side of corruption within the private sector has not received sufficient attention in comparison to the demand-side. Further it appears that the contextuality of the phenomenon has been widely neglected, meaning that its driving dimensions of economical, social and political nature have not been investigated as a whole, revealing potential interrelations. In connection to this, the third gap we see to be given with a lacking connection of the topic to ethical considerations, which also calls for a contextual embedment. Based on these gaps we formulated the following research question: What drives corrupt practices of Multinational Enterprises within the internationalisation process? We argue that before any decisions concerning the handling of corruption can be made, one firstly needs to understand the phenomenon in its complexity. Building up on that, we further aim to scrutinise whether the above described anti-corruption approaches represent sufficient measures for MNEs when it comes to the practical avoidance of corruption. This represents the purpose of our study. We divided anti-corruption measures into internal and external approaches. The former include corporate anti-corruption- strategies, which in connection with ethical standpoints are commonly stated within Code of Conducts. The latter depicts the international legal framework against corrupt practices as well as international institutions fighting it. We concentrated our research on MNEs based in Europe, which internationalised to the BRIC-countries. In order to gain practical insights, a qualitative multiple case study has been conducted, comprising a sample of ten European companies. Given that we decided to conduct an exploratory study, we interviewed firms of differing size and industries in order to gain diverse data. The data collection was specifically tailored to the sensitivity of our research topic. As an ethical standpoint we took the anthropological perspective of moral relativism, implying that corruption cannot be evaluated as right or wrong without taking its context into consideration. Based on the latter, the findings revealed that corruption depicts a phenomenon of high complexity, being driven by every single of the investigated dimensions. Those are intensively interrelated and further reinforce each other. This characteristic seems to lead to a failure of anti-corruption approaches as sufficient measures on the operative level. Thus, within the BRIC-countries MNEs are unlikely to be able to uphold a strict non-tolerance for corruption as it appears to represent the Western business expectations. Consequently, they seem be entangled in a dilemma, facing the local given of strongly prevalent corruption but lacking tools to efficiently circumvent any engagement. According to this we identified a need for a new perspective, going beyond the oversimplified moral evaluation of corruption as right or wrong, implying a ‘black or white’-decision. We see this to be unrealistic since the real-life- context partly leads to grey-zones, in our view making the engagement in corrupt actions morally acceptable since the assessment has to be based on national moral views and take situational dependency into account. With this, we provide a new perspective on the phenomenon of corruption which can serve as a base for future research. On top of that managers can make use of our implications in order to better understand corruption. Consequently, they are able to make more realistic evaluations, for example acknowledging acceptable cultural adaptations instead of claiming a zero-tolerance approach. This again can lead to the creation of transparency, in the end supporting the combating of corruption. 

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