Business Ethics and Corporate Social Responsibility Individual Report: Corruption

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Business Ethics and
Corporate Social Responsibility

Individual report: Corruption

February 2013

Friedrich Heinrich Zenzen
University of Greenwich

Introduction
Corruption is a complex political, social, and economic anomaly that negatively affects developing and developed countries. It weakens democratic institutions, holds economic development, widening the rich-poor gap and certainly leads to governmental instability. The World Bank definition of corruption states that “…the abuse of public office for private gain”. Corruption can be distinguished regarding to where it happens: at the political or management levels of the public sector, or in the private sector between customer and supplier. It can be identified regarding its intensity: if it is isolated or systematic and other specific factors such as grand versus petty, personal versus institutional, local versus national, and traditional versus modern. International organisations such as The Organisation for Economic Co-operation and Development (OECD), World Bank, United Nations (UN), and non-governmental organisation Transparency International have taken some steps to create a more moral and ethical international business environment. Initiatives to combat corruption such as, the United Nations Convention against Corruption which is a multinational governmental agreement aiming at prevention, criminalization, international cooperation and asset recovery. The convention has been signed by 140 countries and it was enforced on 14th December 2005. Furthermore, NGO’s such as Transparency International are providing public studies and data related to corruption and bribery. Surveys and Analysis

The Corruption Perception Index 2012 from Transparency International rank countries by the perception of corruption of their public sector. The scale is 0 – 100, 0 indicates the country is perceived to be corrupted and 100 indicates the country is perceived to be honest. The full index is available on transparency international website.

Country| Rank| Score| Country| Rank| Score|
Denmark| 1| 90| Brazil| 69| 43|
Finland| 1| 90| China| 80| 39|
Sweden| 4| 88| India| 94| 36|
Australia| 7| 85| Russia| 133| 28|
Canada| 9| 84| Nigeria| 139| 27|
Germany| 13| 79| Syria| 144| 26|
Hong Kong| 14| 77| Venezuela| 165| 19|
Japan| 17| 74| Iraq| 169| 18|
United Kingdom| 17| 74| Afghanistan| 174| 8|
United States| 19| 73| Somalia| 174| 8|

Regarding the Corruption Perception Index 2012, Hofstede's dimensions can explain certain differences of national and cultural characteristics that can influence in ethical decision-making. To illustrate that, the correlation between Nigeria that scored low and Denmark that achieved the highest score on perception of corruption in public sector.

Using power distance as example, the Geert-Hofstede website (2012) states that “in Nigeria the hierarchy in an organisation is seen as reflecting inherent inequalities, centralisation is popular, subordinates expect to be told what to do and the ideal boss is a benevolent autocratic. This study recognises that Hofstede's dimensions are focused on organisation. However, culturally it is a relevant study for governments too. The process of globalisation of the World economy has resulted in an unequivocal increase in foreign direct investment. Emerging and developing economies are becoming more open to international business and liberalisation of their regimes. In this context corporations are the predominant stakeholder in the international business structure, and the globalisation points to an increasing necessity for corporate accountability. Corporations operate in multiple countries and each country has its own culture, set of norms and laws. In this sense in occasions it is difficult to find a consensus regarding what is right and wrong on international business. In this scenario business ethics becomes...
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