Organizational Corruption Research Articles

Understanding Corruption in Organizations – Development and Empirical Assessment of an Action Model

Despite a strong sensitization to the corruption problem and a large body of interdisciplinary research, scientists have only rarely investigated which motivational, volitional, emotional, and cognitive components make decision makers in companies act corruptly. Thus, we examined how their interrelation leads to corruption by proposing an action model. We tested the model using a business simulation game with students as participants. Results of the PLS structural equation modeling showed that both an attitude and subjective norm favoring corruption led to a desire to act corruptly. Given high perceived behavioral control, this desire was transformed into an intention that finally resulted in corrupt action. Components related to general private and professional goals did not allow for any prediction. Based on these results, we discuss preventative measures and methods for combating intra- and inter-organizational corruption.

Corrupt Organizations or Organizations of Corrupt Individuals? Two Types of Organization-Level Corruption

We focus on two fundamental dimensions of corruption in organizations: (1) whether the individual or the organization is the beneficiary of the corrupt activity and (2) whether the corrupt behavior is undertaken by an individual actor or by two or more actors. We use these dimensions to define a new conceptualization of corruption at the organization level: the organization of corrupt individuals. We contrast this conceptualization with the prevailing concept of organizational corruption and develop propositions that highlight their differences.

Re-Viewing Organizational Corruption

This special topic forum was designed to stimulate theory development on corruption in organizational life as a systemic and synergistic phenomenon. Given the multiple perspectives and bodies of literature that can be brought to bear on the phenomenon, we introduce the forum with a micro view, macro view, wide view, long view, and deep view of organizational corruption. These views suggest that there is much need for conceptual work that is integrative, interactionist, and processual in nature.

Rationalization, Overcompensation and the Escalation of Corruption in Organizations

An important area of business ethics research focuses on how otherwise normal and law-abiding individuals can engage in acts of corruption. Key in this literature is the concept of rationalization. This is where individuals attempt to justify past and future corrupt deeds to themselves and others. In this article, we argue that rationalization often entails a process of overcompensation whereby the justification forwarded is excessive in relation to the actual act. Such over-rationalization provides an impetus for further and more serious acts of illegality. Using a number of high profile cases, it is argued that this dynamic gap between the act and excessive rationalization can explain why corruption often escalates in severity and scope in the organization.

Corrupt Organizational Hierarchies in the Former Soviet Bloc

Increasing scale and scope of corruption in the former Soviet Bloc, as well as numerous other countries, urges better understanding of the problem within the context of socio-economic transformations as it touches upon issues of organizational structures. This paper presents an overview of the research on corruption in organizations and develops models of corrupt organizations, including the vertical structure, the horizontal structure, and the hierarchy, as applied to transition economies.

Spiraling Down into Corruption: A Dynamic Analysis of the Social Identity Processes that Cause Corruption in Organizations to Grow

To date, theory and research on corruption in organizations have primarily focused on its static antecedents. This article focuses on the spread and growth of corruption in organizations. For this purpose, three downward organizational spirals are formulated: the spiral of divergent norms, the spiral of pressure, and the spiral of opportunity. Social Identity Theory is used to explain the mechanisms of each of these spirals. Our dynamic perspective contributes to a greater understanding of the development of corruption in organizations and opens up promising avenues for future research.

The Effect of the Sociology of Religion on Theology, a Holy Struggle for Power: A Mini-Festschrift

Jesus' kingdom involves suffering and self-denying service, unlike the power hierarchy of a worldly order. In his commentary on Matthew, Calvin saw that holy organizations are not free from corruption, and that power is a dangerous thing. In his commentary on Isaiah 42:1-9, Christ is the humble servant who came to bring the world under God's authority. Christ also represents peace, reconciling those separated from God or one another. How relevant are these bible references, and Calvin's comments for our day? (It is intriguing that Calvin reproved those who did not use ‘the works of the ungodly’ in physics, symbiotics, mathematics, etc). Mol would add (for Calvin) anthropology, psychology, sociology and political science. The areas of relevance are: Disorder and conflict minimization, where selfishness and pride endanger the social bond, whereas self-denial strengthens it. The global mission of the faith, associated with which are language- learning, health and education facilities, and the well-being of the poor. Organizational corruption, when social science organizations ‘bend’ content to suit their ends, and functional questions are not entertained.

Institutional Pillars and Corruption at the Societal Level

This article studies the effects of social institutions on organizational corruption at the societal level by focusing on the possible interactions between the institutional pillars that have been identified in past research. Based on these three institutional aspects or pillars, this article tests the interactive effects of social institutions among societies throughout the world. The results suggest that the three institutional pillars have significant interactive effects on organizational corruption at the societal level. A discussion of the implications of the research findings for researchers and practitioners is given.

Moral Disengagement in Processes of Organizational Corruption

This paper explores Albert Bandura's concept of moral disengagement in the context of organizational corruption. First, the construct of moral disengagement is defined and elaborated. Moral disengagement is then hypothesized to play a role in the initiation of corruption by both easing and expediting individual unethical decision-making that advances organizational interests. It is hypothesized to be a factor in the facilitation of organizational corruption through dampening individuals’ awareness of the ethical content of the decisions they make. Finally, it is hypothesized to contribute to the perpetuation of corruption in organizations, because if individuals who have a greater propensity to morally disengage are more likely to make decisions that advance organizational interests regardless of the ethicality of those decisions, they may also be rewarded for those decisions in terms of organizational advancement. Together these studies form an argument that moral disengagement plays an important role in processes of organizational corruption.

The Aftermath of Organizational Corruption: Employee Attributions and Emotional Reactions

Employee attributions and emotional reactions to unethical behavior of top leaders in an organization recently involved in a highly publicized ethics scandal were examined. Participants (n = 76) from a large southern California government agency completed an ethical climate assessment. Secondary data analysis was performed on the written commentary to an open-ended question seeking employees’ perceptions of the ethical climate. Employees attributed the organization’s poor ethical leadership to a number of causes, including: lack of moral reasoning, breaches of trust, hypocrisy, and poor ethical behavior role modeling. Emotional reactions to corruption included cynicism, optimism, pessimism, paranoia and fear, and were targeted at top leaders, organizational practices (i.e., the old boy network, nepotism, and cronyism) and ethics interventions. Implications for leadership training and other organizational ethics interventions are discussed.

Ethical Distance in Corrupt Firms: How Do Innocent Bystanders Become Guilty Perpetrators?

This paper develops the concept of the ‘continuum of destructiveness’ in relation to organizational corruption. This notion captures the slippery slope of wrongdoing as actors engage in increasingly dubious practices. We identify four kinds of individuals along this continuum in corrupt organizations, who range from complete innocence to total guilt. They are innocent bystanders, innocent participants, active rationalizers and guilty perpetrators. Traditional explanations of how individuals move from bystander status to guilty perpetrators usually focus on socialization and institutional factors. In addition to these factors, we propose that the very distance between an act and its ethical consequences (ethical distance) may also play a determining role – if not always in the same way – in the transition process. Having developed this conceptual argument, we conclude with a discussion of managerial and research implications.

The Dark Side of Authority: Antecedents, Mechanisms, and Outcomes of Organizational Corruption

Corruption poisons corporations in America and around the world, and has devastating consequences for the entire social fabric. In this article, we focus on organizational corruption, described as the abuse of authority for personal benefit, and draw on Weber’s three ideal-types of legitimate authority to develop a theoretical model to better understand the antecedents of different types of organizational corruption. Specifically, we examine the types of business misconduct that organizational leaders are likely to engage in, contingent on their legitimate authority, motives, and justifications. We conclude by suggesting managerial implications of our theoretical model and propose directions for future research.

Organizational Corruption as Theodicy

This paper draws on Weber’s theodicy problem to define organizational corruption as the emerging discrepancy between experience and normative expectation. Theodicy describes the attempts to explain this discrepancy. The paper presents four normative principles enlisted by observers to respond to perceived corruption: moral dilemma, detachment, systematic regulation, and normative controls. Consistent with social construction, these justifications work to either reaffirm or challenge prevailing social norms in the face of confusing events. An exemplar case involves perceived corruption in the business of mountain climbing as represented through the 1996 Mt. Everest climbing disaster. The events illustrate how theodicy informs descriptive accounts of corruption and expose two limitations of normative models of ethics.

"Vestments of civil life" in Caine Mutiny and Attack

Differing in theaters of operation and branches of military, Caine Mutiny (1954) and Attack (1956) both focus on unquestioning obedience to authority and on competency of commanding officers within United States military in Second World War.2 While two narratives each explore complex and uneasy interaction between military service and ideals, they evoke and reflect very different understandings of World War II and War America. This essay explores contrasting and philosophic reflection(s) within two films. Caine Mutiny embodies War's emphasis on obedience to authority, subordination of individual to corporate body, and harmony.3 Attack, in contrast, illustrates continuity of Front articulation of the rhetoric of class and need for a new moral economy with which could resist privilege, organizational corruption, and authoritarian control. Historian Michael Denning argues, for example, that social, cultural, and political alliances of Front produced a cultural front which reshaped culture. Such a Popular Front public took three political forms: a social democratic electoral politics; a politics of anti-fascist and anti-imperialist solidarity; and a civil liberties campaign against lynching and labor repression.4 Together, these two films demonstrate lack of a Cold War consensus on very definition of ideals or on implications of militarization. In praising journalist Marion Hargrove's See Here, Private Hargrove, on experience of induction and boot camp, a New York Times article described Hargrove as a true American understandably impatient in presence of hierarchy and red tape.5 Hargrove's initial resistance to military is a manifestation of what military historian John Keegan has termed culture shock experienced by men who entered military's system of subordination and autocracy which is alien to values.6 In fact, one of dominant literary themes of Second World War was that true Americans found authoritarian, hierarchical, and inefficient military structure hard to take. Even military acknowledged that its ranks were full of such incorrigible civilians.7 Thus, as Jeanine Basinger points out, Hollywood-produced combat films of World War II championed, for duration, subordination of individualism to greater goals of unity and cooperation within military.8 The War, however, demanded a standing peacetime military and celebrated corporate organizational structure. This shift resulted in rewriting of both nature of military and definition of true American. Caine Mutiny reflects both of these trends with its suggestion that obedience and subordination demanded in military service conforms to, rather than directly contradicts, values and ideals. The film justifies its call for unquestioning obedience on grounds that military is actually a meritocracy and not moribund bureaucracy portrayed in literature and personal accounts of war. In this reconstituted military, those who are most capable, loyal, and skilled rise to high rank. It is an anyone-can-succeed salute to War's myth of a classless America. Attacking those who criticized military red-tape, hierarchy, and authority, Caine Mutiny celebrates War era militarization of life. As Hanson W. Baldwin, military editor at New York Times, pointed out, great question of Caine Mutiny is the issue of unreasoning, unquestioning acceptance of orders.9 Having successfully defended Lt. Maryk on a mutiny charge, conscience of film, Greenwald, castigates Maryk and his fellow junior officers for their happiness, which comes at expense of Lieutenant Commander Queeg. Greenwald first argues that there were in fact no objective lapses of courage or command on Queeg's part that could have possibly justified a junior officer removing him from command. …

Business as usual: The acceptance and perpetuation of corruption in organizations

Executive Summary Many of the recent corruption scandals at formerly venerated organizations such as Enron, WorldCom, and Parmalat have some noteworthy features in common. In most instances, the fraudulent acts involved knowing cooperation among numerous employees who were upstanding community members, givers to charity, and caring parents—far removed from the prototypical image of a criminal. The involvement of such individuals in corrupt acts, and the persistence of the acts over time, is both disturbing and puzzling. We argue that the above phenomenon can be explained in part by the rationalization tactics used by individuals committing unethical or fraudulent acts. Rationalizations are mental strategies that allow employees (and others around them) to view their corrupt acts as justified. Employees may collectively use rationalizations to neutralize any regrets or negative feelings that emanate from their participation in unethical acts. Further, rationalizations are often accompanied by socialization tactics through which newcomers entering corrupt units are induced to accept and practice the ongoing unethical acts and their associated rationalizations. We describe the different forms of rationalization and socialization tactics and the ways in which firms can prevent or reverse their occurrence among employees. The onset of these two tactics can establish enduring corruption in organizations and become institutionalized in seemingly innocuous processes.

THE ROLE OF VALUES AND EMOTIONS IN NEWCOMERS' SOCIALIZATION INTO ORGANIZATIONAL CORRUPTION.

We offer a theoretical framework predicting the susceptibility of newcomers' to corrupt choices and their subsequent involvement in ongoing organizational corruption. Previous research on corruptio...

Corruption and economic development on the Baltic littoral: Focus on Latvia

This paper explores corruption and its impact on economic development on the Baltic littoral. Its main focus is on Latvia, the country with the weakest economy and allegedly the most affected by corruption. Comparative rankings of Baltic countries on corruption and various indicators of economic freedom reflect how much is at risk in allowing corruption to continue unchecked. The paper explores the origins of corruption in weak social organizations and deficiencies in social capital, and ends with policy suggestions for corruption abatement.

Executive Commentary

The article presents a commentary on the paper “Business as Usual: The acceptance and perpetuation of corruption in organizations,” by Vikas Anand, Blake E. Ashforth, and Mahendra Joshi. The author notes that ethics training has often failed to achieve its desired outcome because it has addressed external behaviors rather than the root cause of an inappropriate business practice or workplace behavior. The author contends that what's missing is the corporate establishment of a baseline or shared ideology for acceptable conduct.

Business as usual: The acceptance and perpetuation of corruption in organizations

Executive Summary Many of the recent corruption scandals at formerly venerated organizations such as Enron, WorldCom, and Parmalat have some noteworthy features in common. In most instances, the fraudulent acts involved knowing cooperation among numerous employees who were upstanding community members, givers to charity, and caring parents—far removed from the prototypical image of a criminal. The involvement of such individuals in corrupt acts, and the persistence of the acts over time, is both disturbing and puzzling. We argue that the above phenomenon can be explained in part by the rationalization tactics used by individuals committing unethical or fraudulent acts. Rationalizations are mental strategies that allow employees (and others around them) to view their corrupt acts as justified. Employees may collectively use rationalizations to neutralize any regrets or negative feelings that emanate from their participation in unethical acts. Further, rationalizations are often accompanied by socialization...

Productivity and the Moral Manager

In this article, the authors argue that there is a positive relationship between productivity and morality in public-sector organizations. If there are ethical problems such as corruption in such organizations, the administrative answer typically is added rules, more complex procedures, and greater sanctions. In other words, we increase organizational red tape to confront our ethical problems rather than address the real problem directly. Using a systems modeling approach informed by Kohlberg’s moral development theory and Friedrich’s view of “inner controls,” we suggest (a) a more direct method to assess the level of ethical development in organizations and (b) a technique by which to improve public-sector organization productivity that places greater emphasis on individual morality rather than on more administrative controls.