Corruption: The International Evolution of New Management Challenges

Many countries have become increasingly concerned with the subject of corruption, and managers today must deal with changes in ethical norms and laws. New laws and international agreements seek to create a worldwide shift towards the reduction of corruption, and so management responsibilities are continually evolving. Both Transparency International and the World Bank provide estimates of the relative pervasiveness of corruption in different countries. Yet this subject is ambiguous and complex, creating significant challenges for managers. Both Volkswagen and Siemens have recently experienced public criticism and legal prosecution over corruption issues, some relating to internal and inter-corporate relations. Some cultures appear to accept corrupt practices as part of normal business-government relations. In China, guanxi is widely seen as a requirement for business success with the establishment of personal relationships that include an ongoing exchange of gifts and personal favours. Some managers may argue that the giving of gifts is acceptable, that bribes to expedite decisions may be necessary, and that only certain types of bribes should be seen as inappropriate corruption. However, this perspective involves the difficulty of drawing a line to guide decisions of corporate employees, and for many managers it is now necessary to implement clear corporate guidelines in regard to what they consider to be corruption. In this context, some managers may decide to avoid investing in certain countries until the culture of corruption has changed.