Week VI Assignment: Corruption In International Business

Corruption in International Business
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Institutional Affiliation
Corruption in International Business
Corruption is one of the ethical issues facing businesses and is considered to be among the worst issues due to its far-reaching consequences such as closure of the business. This illegal activity can be perpetuated by an individual or a group of employees within the business. Corruption in an organization involves misuse of office by the management, bribery, dishonesty in financial issues and misappropriation of funds. Due to its nature, corruption can harm the image of an organization and its profitability. Corruption remains to be a major problem in international business despite the implementation of anti-corruption laws and international agreements. The Corruption Perception Index (CPI) indicates that there is no country which does not have corruption, but some are more corrupt as compared to others. The Transparency International (TI) indicates that the vice is more pervasive in developing countries as compared to their developed counterparts. However, this does not mean that developing economies are tolerant to corruption.
Summary
The paper “Corruption in International Business” present a critical assessment of the issue and provides recommendations that will guide future studies. The author argues that corruption provides a base for expansion in international business studies due to its illegal in nature. However, the contradicting perceptions in the illegal nature and variations in regulation and enforcement of laws across the nations pose challenges to the assumptions on the vice. This paper is based on previous studies that have addressed the topic of corruption in business. Based on this the, paper proposes ways in which the issue of corruption can be analyzed in future studies by analyzing the various types, causes, measures, effect and controls of the vice. The paper provides recommendations on how some of the firm theories can be extended using corruption as the premise that challenges some of the assumptions of the theories. For example, the agency theory can be extended by analyzing the existence of unethical practices in agency relationships; the transaction cost economies can be extended by analyzing how illegal transaction costs can be minimized; and the resource based-view can be extended by exploring the corporate social irresponsibility of the organization. Other theories that can be extended include; resource dependency theory and neo-institu...