Many scholars and activists favor banning illicit businesses, especially given that such businesses constitute a large part of the global economy. But these businesses are commonly operated as if they are subject only to the ethical norms their management chooses to recognize, and as a result they sometimes harm innocent people. This can happen in part because there are no effective legal constraints on illicit businesses, and in part because it seems theoretically impossible to dispose definitively of arguments that support (...) moral relativism. Progress is being made, however, towards a “second best” arrangement consisting of widespread institutional agreements regarding ethical norms. This development might eventually enable us to transcend moral relativism in some respects. Indeed, although some business ethicists who examine illicit business practices accept moral relativism, others attempt to surmount it. The latters’ endeavor, I show, is cross-cultural in nature in that it involves businesses that are deemed illicit in at least one but not every culture. I then recall some traditional solutions and their limits: ideological teachings are culture-specific, hence both temporally and spatially limited; legal constraints, though potentially helpful, are too diverse hence often narrow in reach. Especially problematic are defense industry businesses, which are inherently transcultural and, though uniquely harmful, are not effectively banned in any culture. Harm to quality of life (QoL) can, however, be measured. So I recommend institutional support for international human rights tied to QoL data as a workable way to counter moral relativism regarding illicit businesses. (shrink)

The purpose of this research is to extend prior research testing the premise that small deviations from ethical behavior lead to even larger deviations from ethical behavior. This study examines the association between a person’s willingness to bribe a police officer to avoid being issued a speeding ticket with their views on inappropriate behavior of corporate executives. Our sample of 528 participants comes from Colombia (90), Ecuador (70), South Africa (131) and the United States (237). As part of our data (...) gathering, we controlled for social desirability response bias in the responses of the students who participated in our study. Our data indicate significant differences between the views of the students from Colombia, Ecuador, and South Africa when compared to the views of the students from the United States. The analysis indicates that, for all four dilemmas, the most significant variable was the belief about how ethical it was to pay a bribe to avoid a traffic ticket. In addition, in three of our four dilemmas, Paulhus’ Impression Management Subscale, which measures social desirability response bias, was the second most significant variable. Finally, in three of the four dilemmas, the students from Colombia, Ecuador and South Africa thought the actions described in the dilemmas were less ethical than the students from the United States. (shrink)

Globalization leads to cross-border business transactions between societies with very different norms and regulations regarding bribery. Bribery in international business transactions can be seen as a function of not only the demand for such bribes in different countries, but the supply, or willingness to provide bribes by multinational firms and their representatives. This study addresses the propensity of firms from 30 different countries to engage in international bribery. The study incorporates both domestic (economic development, culture, and domestic corruption in the (...) supplying country) and international factors (those countries’ patterns of trade and involvement in international accords) in explaining the willingness to bribe abroad. The propensity to provide bribes was the lowest when corruption was not tolerated in the multinational firms’ home countries, when the firms’ countries were signatories of the Organization for Economic Cooperation and Development (OECD) anti-bribery convention, and when those countries traded heavily with wealthier nations. Further, these findings are maintained when controlling for levels of economic development and cultural values in the supplying country. In terms of culture, firms from high power distance countries showed a somewhat greater propensity for providing bribes in transactions with less-developed nations. (shrink)

Corruption in the construction industry is a serious problem in China. As such, fighting this corruption has become a priority target of the Chinese government, with the main effort being to discover and prosecute its perpetrators. This study profiles the demographic characteristics of major incidences of corruption in construction. It draws on the database of the 83 complete recorded cases of construction related corruption held by the Chinese National Bureau of Corruption Prevention. Categorical variables were drawn from the database, and (...) ‘association rule mining analysis’ was used to identify associations between variables as a means of profiling perpetrators. Such profiling may be used as predictors of future incidences of corruption, and consequently to inform policy makers in their fight against corruption. The results signal corruption within the Chinese construction industry to be correlated with age, with incidences rising as managers’ approach retirement age. Moreover, a majority of perpetrators operate within government agencies, are department deputies in direct contact with projects, and extort the greatest amounts per case from second tier cities. The relatively lengthy average 6.4-year period before cases come to public attention corroborates the view that current efforts at fighting corruption remain inadequate. (shrink)

This article presents the results of the longitudinal study of Addiopizzo, a successful anti-bribery organization founded in Sicily in 2004. It analyzes how this organization has used information disclosure as a strategy to fight adverse environmental conditions and the immoral activities of the Sicilian Mafia. This article extends the business ethics and corporate social responsibility literature by showing how multi-level strategic information disclosure processes can help gain organizational legitimacy in adverse social environments and successfully fight against social resistance to change, (...) low levels of moral imagination and attacks from criminal organizations. This article provides an additional contribution to the literature by linking the three research streams on corporate transparency, the fight against corruption, and organizational legitimacy. The results of this research also contribute to the special issue of the EBEN AC 2010, “Which values for which organizations”, since it provides a unique example of an organization capable of spreading the values of social justice and honesty in a difficult social environment plagued by Mafia. (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)

We examine whether anti-corruption intensity strengthens tax enforcement effectiveness in China. Using hand-collected anti-corruption data and aggregate tax enforcement data, which include the probability of tax audits and tax deficiencies, for a sample of 11,687 firm-year observations from 2012 to 2017, we find that anti-corruption intensity increases the deterrence role and the enforcement role of tax audits. We also identify the fear effect as a possible channel through which anti-corruption intensity affects tax enforcement effectiveness. Overall, the results indicate that anti-corruption (...) intensity can improve a revenue agency’s effectiveness. (shrink)

Misbehaviour and malpractices of Chinese journalists in recent years have brought media corruption under the spotlight. The lack of professionalism and scarcity of fully established ethics in media organisations have made the case worse. However, while Chinese media and academics concentrate narrowly on paid-for news or gag fee by prompting the enforcement of disciplinary restraints and ‘thought education’, this hot issue has been largely ignored by western scholars and has only been occasionally reported by some western media. Based mainly on (...) prominent cases and document studies, this article classifies three major types of media corruption in the Chinese context: (1) individual red-envelope taking, (2) institutional profit seeking and (3) personal businesses benefiting from the identity of a reporter. It then explores two major endogenous causes of media corruption: media’s unique role in China’s political power structure and their monopoly in information collection and delivery. Two current countermeasures undertaken against this phenomenon in China are finally analysed. (shrink)

The construction industry consistently ranks amongst the highest contributors to global gross domestic product, as well as, amongst the most corrupt. Corruption therefore inflicts significant risk on construction activities, and overall economic development. These facts are widely known, but the various sources and nature of corruption risks endemic to the Iranian construction industry, along with the degree to which such risks manifest, and the strength of their impact, remain undescribed. To address the gap, a mixed methods approach is used; with (...) a questionnaire, 103 responses were received, and these were followed up with semi-structured interviews. Results were processed using social network analysis. Four major corruption risks were identified: procedural violations in awarding contracts, misuse of contractual arrangements, neglect of project management principles, and, irrational decision making. While corruption risks in Iran align with those found in other countries, with funds being misappropriated for financial gain, Iran also shows a strong inclination to champion projects that serve the government’s political agenda. Root cause identification of corruption risks, namely, the noticeable impact of authoritarianism on project selection in Iran, over criterion of economic benefit or social good, is a significant outcome of this study. (shrink)