Search results

This chapter discusses the special case of extractive industries in relation to susceptibility to corruption, especially in states with weak institutional and governance structures. The systemic nature of this corruption is shown in a vicious cycle of extractive resource dependency and corruption which reinforce each other. The chapter then concentrates on the supply side of corruption, and the role of the private sector with domestic and foreign natural resources companies feeding into systemic corruption. Corruption is underpinned by a high demand, high prices for extractive resources scenario, and mitigated by a low demand, low prices scenario. Transparency oriented, anticorruption measures may not be effective in their own right, but a low demand, low prices scenario could provide an opening for such measures to take root, with accompanying benefits to the citizens of resource rich states and their environment. This suggests taking a contingency approach to dealing with corruption.

Corruption is a phenomenon that is ubiquitous, but the extent and the form differ across countries. According to Transparency International, the Corruption Perception Index (CPI) in year 2001 varied from 0.4 to 9.9 (10 is completely corruption free). The average score for the 91 countries surveyed was 4.76 (with a standard deviation of 2.39). Why is there so much cross-country difference? Why are some countries virtually corruption free, but are others fraught with corruption?

The research question is how home country corruption and nationalism may affect operations of BRIC multinational enterprises. BRIC composition permits a comparison of two authoritarian regimes and two constitutional democracies. Each BRIC features a different combination of corruption and nationalism. The chapter adds South Africa information for two limited reasons. First, from 2010 South Africa is a member of the BRIC summit process. South Africa is an important entry point to Africa, for BRIC multinationals and particularly for China. Second, concerning corruption and nationalism South Africa is analytically useful as a control context that helps illustrate but does not appear to change highly exploratory BRIC findings.

The chapter draws on limited literature and information concerning corruption and nationalism in BRICs to suggest tentative possibilities. Transparency International provides bribe payers index estimates for 28 large economies, with important multinational enterprises, and corruption perceptions index estimates including those 28 countries. These estimates include the four BRICs and South Africa. The available sources suggest some suggested findings about varying impacts of home country corruption and nationalism on operations of BRIC multinationals.

China and Russia are authoritarian regimes in transition from central planning-oriented communist regimes. They are global military powers, expanding influence in their respective regions. Brazil, India, and South Africa are constitutional democracies. India, a nuclear-armed military power, seeks a regional leadership role in South Asia. Brazil and South Africa are key countries economically in their regions. BRIC multinationals are positioned between home country and host country conditions. Chinese and Russian multinationals may reflect a stronger nationalistic tendency due to home country regimes and ownership structure.

The chapter is an original but highly exploratory inquiry into impacts of corruption and nationalism on BRIC multinationals. Extant BRIC literature tends to understudy effects of home country corruption and nationalism on managerial mindset and incentives in either commercial or state-owned enterprises.

Corporate Social Responsibility (CSR), in the form of corporate philanthropy or charity, has been practiced in the United States since the late 1800's (Sethi, 1977). Today's concept of CRS originated in 1953 with the publication of Bowen's book entitled “Social responsibilities of Businessmen”. In his book Bowen asked the question: “What responsibilities to society can business people be reasonably expected to assume?” At this time, the emphasis was placed on business people's social conscience, rather than on the company itself. Further on the academics became much more precise in defining the firms’ responsibilities. Carroll (1999) divided companies’ responsibilities into economic, legal, ethical, and philanthropic. Lantos (2002) narrowed down CSR to ethical, altruistic, and strategic responsibility. According to Davis (1973, p. 312) CSR refers to a company's concern for “issues beyond the narrow economic, technical and legal requirements of the firm.”

The objective of this study is to investigate how country risk, different political actions from the government and bureaucratic behavior influence the activities in industry supply chains (SCs) in emerging markets. The main objective of this study is to investigate the influence of these external stakeholders’ elements to the demand-side and supply-side drivers and barriers for improving competitiveness of Ready-Made Garment (RMG) industry in the way of analyzing supply chain. Considering the phenomenon of recent change in the RMG business environment and the competitiveness issues this study uses the principles of stakeholder and resource dependence theory and aims to find out some factors which influence to make an efficient supply chain for improving competitiveness. The RMG industry of Bangladesh is the case application of this study. Following a positivist paradigm, this study adopts a two phase sequential mixed-method research design consisting of qualitative and quantitative approaches. A tentative research model is developed first based on extensive literature review. Qualitative field study is then carried out to fine tune the initial research model. Findings from the qualitative method are also used to develop measures and instruments for the next phase of quantitative method. A survey is carried out with sample of top and middle level executives of different garment companies of Dhaka city in Bangladesh and the collected quantitative data are analyzed by partial least square-based structural equation modeling. The findings support eight hypotheses. From the analysis the external stakeholders’ elements like bureaucratic behavior and country risk have significant influence to the barriers. From the internal stakeholders’ point of view the manufacturers’ and buyers’ drivers have significant influence on the competitiveness. Therefore, stakeholders need to take proper action to reduce the barriers and increase the drivers, as the drivers have positive influence to improve competitiveness.

This study has both theoretical and practical contributions. This study represents an important contribution to the theory by integrating two theoretical perceptions to identify factors of the RMG industry’s SC that affect the competitiveness of the RMG industry. This research study contributes to the understanding of both external and internal stakeholders of national and international perspectives in the RMG (textile and clothing) business. It combines the insights of stakeholder and resource dependence theories along with the concept of the SC in improving effectiveness. In a practical sense, this study certainly contributes to the Bangladeshi RMG industry. In accordance with the desire of the RMG manufacturers, the research has shown that some influential constructs of the RMG industry’s SC affect the competitiveness of the RMG industry. The outcome of the study is useful for various stakeholders of the Bangladeshi RMG industry sector ranging from the government to various private organizations. The applications of this study are extendable through further adaptation in other industries and various geographic contexts.

When FECS spins out of human intervention and regulatory control, then it can easily harm and constrain the markets as it happened on Black Friday of October 1929, resulting in the Great Depression, and the September–October 2008 Financial Crisis, when some 17 mega global investment banks ran out of control and lost close to trillion US dollars in market capitalization. This chapter defines, analyzes, classifies, and morally assesses occupational and corporate fraud, corruption and money-laundering, and their other evil forms. When we allow our choices to be driven by passion, choosing thereby to ignore or fail to investigate outcomes, the results are too often flawed and unintended, as the cases of Lehman Brothers, AIG, Freddie Mac, and Fannie May that collapsed around September–October 2008 would attest. While we should condemn abuses within the FECS, one can also seek to understand the origins and originating systems of fraud, corruption, and various forms of deceptions and chicanery, and search for remedial strategies for eradicating these ills of FECS. Several contemporary market cases of fraud, corruption, and bribery will be identified to illustrate the contents of this chapter.

Using the pharmaceutical sector as a microcosm of the health sector, we highlight the most prevalent structural and policy issues that make this sector susceptible to corruption and ways in which these vulnerabilities can be addressed. We conducted a literature review of publications from 2004 to 2015 that included books, peer-reviewed literature, as well as gray literature such as working papers, reports published by international organizations and donor agencies, and newspaper articles discussing this topic. We found that vulnerabilities to corruption in the pharmaceutical sector occur due to a lack of good governance, accountability, transparency, and proper oversight in each of the decision points of the pharmaceutical supply chain. What works best to limit corruption is context specific and linked to the complexity of the sector. At a global level, tackling corruption involves hard and soft international laws and the creation of international standards and guidelines for national governments and the pharmaceutical industry. At a national level, including civil society in decision-making and monitoring is also often cited as a positive mechanism against corruption. Anticorruption measures tend to be specific to the particular “site” of the pharmaceutical system and include improving institutional checks and balances like stronger and better implemented regulations and better oversight and protection for “whistle blowers,” financial incentives to refrain from engaging in corrupt behavior, and increasing the use of technology in processes to minimize human discretion. This chapter was adapted from a discussion piece published by Transparency International UK entitled Corruption in the Pharmaceutical Sector: Diagnosing the Challenges.