Ethics & Corruption an Introduction

At its core, this book is about Organizational Corruption (OC). The human civilization evolves through its societies. All our day-today activities and the works of longer durations today – be it business, recreation, academics, research or religion- are managed not by individuals, but by organizations. In fact, our continually evolving societies are no longer best described as societies of individuals, but rather as societies of organizations; and the modern business organization, including governmental, non-governmental and religious organizations, has now achieved societal dominance (Gioia, 2003). This brings the study of organization right to the forefront in the next wave of societal thinking. In most economies, particularly those of the Third World countries like India and her neighbors, governmental organizations and State-Owned Enterprises (SOEs) still manage substantial assets on behalf of their people, though the role of governments in running their own business organizations is gradually slackening, as part of the ongoing wave of globalization, liberalization and privatization. With the role and impact of business organizations becoming all-pervasive, the global fight against corruption is also bringing its focus to bear on an organizational perspective towards the phenomenon of corruption. An act of corruption performed within the environment of the organization could have much more impact on society, economy and common good than one happening in transactions between individuals outside it. This book seeks to present a collated set of material for first-time scholars of Ethics and Corruption through an extensive review of extant literature on Organizational Corruption, synthesize the same taking into account multi-disciplinary perspectives and theories; antecedents and effects of corruption; currently available tools with practitioners and in theory for measuring corruption and suggest certain new directions for research. This book also proposes to extend discussion on precursors, mediators and moderators of OC, which are comparatively less discussed aspects of OC. Finally this book proposes the concept of Corruptance of Organizations (discussed below). At the outset we make four assumptions: One; The entire discussion in this book will be on Organizational Corruption (OC) or Corruption in the Organizational Context (COC), and we will use the terms Corruption, OC and COC interchangeably. Two; COC refers to the behavior of individuals or groups or the organization as a whole, all within the organizational setting. This means that acts of corruption performed between two individuals or groups outside an organizational context are outside our ambit. Three; by Organization we mean the modern formal private and public business organizations including any Governmental organization such as a Public (State-owned Enterprise) or a governmental department engaging in business transactions. This therefore excludes individual behavior outside of the organizational setting, non-business activities of NGOs, religious organizations etc. Four; we assume that corruption in any form is not good for society or common good and needs to be prevented or eradicated. Corruption in the Organizational Context (COC) or Organizational Corruption (OC) is highly undesirable for any parties holding a stake in the organization’s performance (Lange, 2008). An organizational perspective towards corruption is important because, like all other societal phenomena, an organization has evolved a basic unit in the practice of corruption also (Luo, 2004). COC can be considered as the furthering of individual interests by one or more organizational actors through the intentional misdirection of organizational resources or perversion of organizational routines, this behavior being ostensibly on behalf of the corporation rather than against it (Lange, 2008). Most corrupt activities, from a macro perspective, take place between profit-driven organizations (on the supply side) and government officials, legislators or other organizations (on the demand side). There are also numerous examples of corrupt activities performed by individuals, groups or the organization itself against other individuals, organizations or the general public or national exchequer. In the backdrop of the numerous scams that shook the economies of many countries in the early years of this millennium, Ashforth et al (2008) highlight the need to focus on corruption in the organizational context, as against the somewhat related (but different) notions such as unethical behavior, antisocial behavior, dysfunctional deviance, organizational misbehavior, counter-productive work behavior etc., which are also located within the organizational setting. We will be analyzing all these concepts in the course of this book. Corruption, unlike these others, is a strong and provocative term implying a willful perversion of order, ideals and trust (Ashforth et al, 2008) and in the organizational context, has been becoming a grave matter for concern afflicting everything, for-profit, not-for-profit, governmental, and even religious organizations; and being displayed not only by individuals in organizations, but by organizations themselves (Ashforth et al, 2008). In the last two decades, researchers have begun to look with increasing intensity at the phenomenon of Corruption. The need for a focused look at Corruption in organizations stems from the following facts. One, the current management literature is atomized in that existing models of negative organizational behaviors like Corruption focus mainly on static individual traits and behaviors and the individual, interpersonal, and group level factors that influence them. (Ashforth et al, 2008). The resulting views presented by scholars of Corruption are relatively narrow leading to a relative neglect of the role of processes and systems (Brass, Butterfield & Skaggs 1998). A systemic view is obviously important because corruption appears to thrive in particular organization, industry, and national environments (Ashforth et al, 2008), and we need to examine just what is different about these environments. There is a need to juxtapose organizational corruption against the other organizational misconducts/misbehaviors in the backdrop of the organizational systems and processes on one hand; and culture, norms and practices on the other. Such a 360-degree relook must also examine the COC phenomenon from the perspectives of other disciplines such as psychology, sociology, anthropology, economics, law, political science as well as organizational behaviour. One of the aims of this book is to conceptualize the above context of Organizational Corruption, for the benefit of the serious student of the domain. Two, for controlling or eliminating Corruption we first need to have a truly integrative, interactive and processual understanding of Corruption in organizations (Ashforth et al, 2008). Therefore, there is a need to study closely and simultaneously the organizational antecedents shaping corruption from the micro-, meso- and macro- perspectives, the precursors or ‘warning bells’ to corruption, the organizational systems, processes and behaviors permitting, rationalizing and reflecting corruption, its mediators and moderators, and the consequences generated by corruption. The next domain which needs to be surveyed is that of measurement of corruption (or of corruption perception, which is what is actually measured today), and the efforts at various levels for controlling Corruption, as seen from literature as well as from practitioners. In this book we will examine each of these facets of Corruption. Three, we assume that elimination of COC is a sine qua non for achieving the larger social good of all. The common - often unspoken- purpose behind all research and study in organizational behavior is for suggesting ways of managing organizations to the overall bene