This book discusses the causes and mechanisms of corruption in multinational corporations. The author develops innovative and intellectually stimulating anti-corruption mechanisms and provides the reader with a precious toolkit. His work combines empirical research with valuable practical insights. Both board members and senior managers will appreciate the large variety of issues covered.
Contents
1. Introduction
1.1. Definition
1.2. Negative Aspects
1.3. Motivation and Research Objective
2. Causes and Areas of Special Attention
2.1. Common Causes
2.2. Rules, regulations and taxes
2.3. Four Categories
2.4. Sociological Aspects
2.5. Final Remarks
3. Legal Situation
3.1. Overview
3.2. Case Analysis: Germany
3.2.1. The Criminal Code
3.2.2. The Act on Regulatory Offences
3.2.3. Other Laws
3.2.4. Further Aspects to Consider
4. Corruption Methods and Practices
4.1. Different Methods at Different Levels
4.2. Payment Methods
5. Prevention Methods and Mechanisms
5.1. Introductory Comments
5.2. Social Media Marketing Approach
5.3. Questions to Ask
5.4. Defining Clear, Precise and Unambiguous Goals
5.5. Review Process
5.6.Further considerations
5.7. Gifts and Benefits
5.8. Training
5.8.1. Training Plan for Employees in Less Corrupt Countries or Business Areas
5.8.2. Training Plan for Employees in Corrupt Countries or Business Areas
5.8.3. Training Plan for Employees in Highly Corrupt Countries or Business Areas
5.8.4. Training Plan for Board Members
5.8.5. Training Plan for Senior Managers
6. Interpretation of the Survey Results
6.1. General Comments
6.2. Analysis of the Results
6.2.1. Causes
6.2.1.1. Important Factors
6.2.1.2. Incentives for Corruption
6.2.1.3. Corruption Under Special Circumstances
6.2.2. Methods
6.2.2.1. Common Methods
6.2.2.2. Least Risky Methods
6.2.3. Prevention
6.2.3.1. Effective Guidelines
6.2.3.2. Effective Social Media Marketing Strategies
6.2.3.3. Effective Prevention Measures
7. Master Guidelines for the Board of Directors
7.1. Directly Contact Public Decision-Making Entities
7.2. Consulting Contracts
7.3. Employee Training
7.4. Guidelines
7.5. Compliance Departments and Officers
7.6. Internal Control for Compliance Departments and Officers
7.7. External Control for Compliance Departments and Officers
7.8. Whistleblower-Program
7.9. External Ombudsman
7.10. Consistency
8. Closing Remarks
8.1. Key Findings
8.2. Benefits of the Study
8.3. Limitations of the Study
8.4. Suggestions for Further Research
Research Objectives and Themes
The primary research objective of this work is to provide a comprehensive understanding of the causes and methods of corruption within multinational corporations. By examining the interplay of legal, sociological, and psychological factors, the paper aims to develop a structured tool kit for boards of directors to effectively prevent corrupt practices.
- Analysis of root causes of corruption, including regulatory and sociological factors.
- Evaluation of corruption methods and practices, distinguishing between petty and grand corruption.
- Development of strategic prevention mechanisms such as training and internal control systems.
- Empirical analysis based on a survey of 250 multinational corporations, consultants, and NGOs.
- Creation of master guidelines for boards of directors regarding compliance and integrity.
Excerpt from the Book
2.4. Sociological Aspects
From a sociological point of view, three dimensions of the normalization process of corruption can be identified, namely rationalization, institutionalization and socialization. During the rationalization phase, individuals who participate in bribery use common societal norms in order to justify their activities. The socialization phase helps to teach corrupt norms to new members, and institutionalization helps to transform corrupt practices into subconscious routines (Dombois, 2009: pg. 136 ff.).
The rationalization of corruption can be sub-divided into further elements, namely the denial of injury, victim and responsibility as well as to social weighting, appeal to higher loyalties and the metaphor of the ledger. A denial of responsibility is often justified by the assumption that the actor has no other choice, and can hence not be held accountable for his actions (Anand et al., 2004: pg. 41). For example, the CEO of a multinational company might argue that since all his competitors are bribing public officials in Africa, he has no choice but to bribe as well in order to be able to do business in certain countries.
A denial of injury means that the actors believe that nobody is harmed by their actions (Anand et al., 2004: pg. 41). For example, the CEO of a multinational company might argue that both his firm and the public official benefited from the bribe and its consequences. He might further argue that even the public benefitted from this illegal arrangement, since a major project would not have been realized otherwise. However, these arguments obviously ignore the massive social costs caused by corruption.
Summary of Chapters
1. Introduction: Defines corruption and its negative societal and economic consequences, setting the stage for the research objective.
2. Causes and Areas of Special Attention: Examines common drivers of corruption, including regulatory environments, sociological normalization, and psychological factors.
3. Legal Situation: Provides a legal analysis of corruption with a focus on the German jurisdiction to illustrate potential regulatory consequences.
4. Corruption Methods and Practices: Discusses various techniques, from petty corruption to sophisticated grand corruption, and the payment methods involved.
5. Prevention Methods and Mechanisms: Proposes structured approaches such as training, internal control systems, and specific guidelines for boards of directors.
6. Interpretation of the Survey Results: Analyzes empirical data collected from companies and experts regarding the effectiveness of various anti-corruption strategies.
7. Master Guidelines for the Board of Directors: Offers a concrete implementation framework for boards to effectively manage compliance and mitigate corruption risks.
8. Closing Remarks: Summarizes the key findings, benefits, and limitations of the study, while identifying areas for future research.
Keywords
Corruption, Board Governance, Compliance, Bribery, Multinational Corporations, Internal Control, Legal Risk, Corporate Governance, Anti-Corruption Strategies, Ethics, Sociological Normalization, Whistleblowing, Regulatory Offenses, Risk Management, Transparency.
Frequently Asked Questions
What is the core focus of this research paper?
The work focuses on the prevention of corruption from a board governance perspective, providing actionable insights for multinational corporations to mitigate bribery risks.
What are the primary themes discussed in the text?
The themes include legal frameworks, causes of corruption (both individual and institutional), common corruption practices, and the development of effective prevention and control mechanisms.
What is the main objective of this study?
The objective is to establish a profound understanding of how and why corruption occurs in multinational firms and to provide a practical tool kit for boards of directors to combat these issues.
Which scientific methodology is applied?
The paper combines a theoretical literature review with an empirical analysis based on survey data from 33 respondents out of 250 contacted multinational corporations, consultants, and NGOs.
What topics are covered in the main section of the book?
The main sections cover the definition of corruption, legal situations, methodologies used in corruption, prevention strategies (including training and social media marketing), and an empirical survey interpretation.
What are the key descriptive terms for this work?
Key terms include Corporate Governance, Bribery Prevention, Compliance, Institutional Control, and Multi-national Anti-Corruption strategy.
Why did the author choose Germany as a case study?
Germany was chosen due to its well-developed legal system, the high number of multinational corporations located there, and the author's personal ties to his home country.
How does the book address the "six-eye principle"?
The "six-eye principle" is proposed as a vital internal control mechanism where critical decisions or contracts must be signed by three independent authorities, such as the compliance officer, the legal department, and the local manager, to prevent individual abuse of power.
What role does the survey play in the paper's conclusions?
The survey validates theoretical assumptions about the effectiveness of various anti-corruption measures, helping to prioritize concrete strategies like consistent compliance and clear guidelines over less effective ones.
- Quote paper
- Fabian M. Teichmann (Author), 2014, On the Prevention of Corruption from a Board Governance Perspective, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/273993
