Influence of Corruption on Business Strategies = An explorative study of Swedish entrepreneurs in Tanzania

University essay from Handelshögskolan i Stockholm/Institutionen för marknadsföring och strategi

Abstract: A limited amount of research has been done on how companies respond to corruption in developing countries apart from avoiding entry. Even less studies concern strategies of international small and medium enterprises entering unknown to them African markets. The purpose of this thesis was to study influence of host country corruption on business strategies of foreign companies both at the entry and post-entry stages through the example of Swedish SMEs in Africa. In order to fulfill the purpose a qualitative study was conducted where the Swedish entrepreneurs doing business in Tanzania were interviewed. Their responses were further compared to the results of the previous studies on corruption, after that differences and similarities were analyzed.The main conclusion of the thesis is that it is possible for international entrepreneurs to successfully start and grow a business in a corrupt host country without taking part in corruption. The important recommendation drawn from the interviews and the literature is having a local partner who has connections and knowledge of the market. However, you have to put significant amount of time and effort into partner selection to make sure that you find a person that shares your values and principles, including negative attitude towards corruption. Another strategies that appeared to be sustainable against corruption were spreading your investment, not outsourcing non-core activities and performing micromanagement on the upper management level.

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