The Implication of Bribery Practices in Organisations

Bribery and its Impact on Development

Bribery entails the use of monetary or non-monetary resources as incitements to acquire favours illegally (Latimer, 2017). Bribery has been a controversial issue due to its pervasiveness globally. According to Transparency International (TI), every nation in the world has a degree of bribery with developing countries portraying the highest levels (Malgwi, 2016). The increased bribery rates have adversely affected the development and growth of nations and businesses, as well as both local and international trade. Onofrei & Grădinaru, (2017) show that bribes negatively impact democracy in any institution and thus integrity. In their study that was focused on the border between bribery and sponsorship of a public servant, in the exercise of his duties, they discovered that bribing results in misallocation and underutilization of resources. As Bribery rate spirals, it hinders the development and growth of small business enterprises as they lack the financial resources to thrive in a corrupt environment (Wellalage et al., 2018). In the contemporary world, businesses engage in different forms of bribery in order to refrain from larger operational costs such as tax evasion, bribing inspectors, illegal possession of business permits, or evading importation or exportation tariffs. The escalation in bribery rates can be attributed to wrong business cultures, ineffective management, and inappropriate individual morals (Sampath, & Rahman, 2018). As Andriopoulos (2001) asserts, bribery practices in businesses can be curbed through promoting organisational processes that enhance anti-bribery activities, development of strategies and competence for effective managerial behaviour, implementation of management thoughts in managerial practices, and effective management of people in organisations.

Bribery Practices Pervasiveness

Almost all businesses engage in bribery practices globally (Malgwi, 2016). The TI uncovered that developing countries have the highest rates of bribery. The governments in third world countries lack the effective workforce to curb the high bribery levels. Consequently, almost all departments in such countries engage in bribery actions (Rey et al., 2017). Organizations bribe officials to get the easy way out such as providing lesser incentives to avoid paying required taxes. Rabl, (2011) emphasizes that bribery practices have been incorporated into the daily activities of organizations. He further found out that increased bribery practices are attributed to the increased development of Multinational Enterprises (MNEs). As businesses operate in local and international nations, the bribery policies among the different countries differ. Therefore, when an organization is hosted by a country with ineffective policies, they tend to engage in bribery, especially to reduce foreign taxation (Sampath, & Rahman, 2018). Moreover, the increased need for firms to maximize profits has resulted in companies disregarding ethical standards in their daily operations (Van et al., 2018). The elevated bribery practices in international marketing have resulted in the formulation of strict policies by countries against such actions. However, despite such efforts, bribery actions have not been eradicated; developed countries have only managed to minimize it (Lord, 2013). Organizations that are highly characterized by great degrees of bribery in many countries entail the police and judiciary departments.

The Implication of Bribery Practices

The consequence of bribery practices is a controversial issue since it is dependent on the viewpoint. The negative effects according to Malagwi (2016) entail the reduced power of competition in the market. Owing to the reduced production costs due to bribery, large firms give rise to inequitable competition. Therefore, they produce cheaper products which in many cases are of low quality. Wakayama (2017) further argues that bribery practices in organizations lead to obstruction of entry into markets by starting firms. As per his findings, wrong use of incentives makes entry into the market too expensive for new firms. Furthermore, public officials tend to prolong the development stages of new companies to extort more bribes from them. Additionally, bribery practices adversely affect cross-border investments (Sampath & Rahman, 2018). Investors are resilient to venture into corrupt markets in fear of undergoing losses. Moreover, according to Tuliao & Chen (2017), illegal provision of incentives for own selfish gains undermines organizations’ integrity and trust.

Consequently, the firms’ management will not be obstructed from submitting to other unlawful activities since their ethical conduct would have already been tampered with. On the other hand, according to Van et al., (2018), bribery practices in businesses have potential financial gains for the firms in the short-run. They argue that bribery can be implemented to shorten long processes in business hence faster decisions and quicker outcomes. Using bribery is also a way of investment as it results in saving resources that would have otherwise been used more (Rabl, 2011). Consequently, companies realize more profits.

Curbing Bribery Practices in Businesses

Nations globally have invented anti-bribery policies. Any organizations that act in contempt of the set regulations are punished as per the pre-established techniques (Lord, 2013). Moreover, as per Onofrei & Grădinaru, (2017) findings, effective structural organizational settings aid in bribery eradication. They further emphasize that the nature and state of the relationship between the managerial team and employees are fundamental in the execution of anti-bribery policies.

Organizational Processes

Sampath, & Rahman, (2018) found out that the contemporary bribery practices in businesses are influenced by organizations’ environment. That is, the standards set for a business’ work activities determine the bribery levels in the company. As firms thrive to dominate the competition in the market, they often put aside their ethics and engage in illegal activities. If a business is caught engaging in unlawful activities, they often opt to bribe the judges or the police rather than mend their actions (Wellalage et al., 2018). Similarly, small business enterprises bribe authorities to escape the long and more expensive processes of opening businesses. Furthermore, firms in international trade have proved to involve themselves in bribery practices when they are in corrupt nations (Lord, 2013). However, when the host nations have strict policies and punishment against such practices, international businesses tend to refrain from partaking in bribery actions (Latimer, 2017). Bolden, (2016) explains that contemporary bribery practices in businesses can be curbed through the development of organizational processes that enhance lawful activities such as, employee involvement, standards structuring, setting management goals and objectives, identification of internal constraints, and implementation of effective training methods.

Employee Involvement

According to Andriopoulos (2001), involving the staff in the daily activities of the organization is an effective method of obtaining organizational goals. He further emphasizes that ensuring active participation of employees in the ethical measures of a firm aids in reducing bribery practices. For instance, when aware of anti-bribery policies of the company, employees refrain from engaging in any illegal activity that may hurt the firm. Employee involvement can be achieved by ensuring effective awareness of all organization’s regulations among all employees (Carnall, 2018). Additionally, Bolden, (2016) explains that the staff needs to be assured that the management holds their best interests to establish trust. Consequently, employees develop the needed motivation to work ethically.

Standards Structuring

As stated by Bolden (2016), it is fundamental for an organization to formulate ethical standards that help in bribery practices eradication. Since the policies serve as a baseline for decision making, it is easier to monitor the practices of the firm thus ensure that they are in line with the required lawful manner. Additionally, Carnall (2018) portrays that it is important to develop essential communication channels that convey the set standards effectively.

Formulation of Goals and Objectives

As per Andriopoulos (2001) findings, objectives form a baseline for the activities of an organization. Therefore, it is important for the management to set goals that result in the effective incorporation of profit maximization and anti-bribery practices.

Identification of Internal Constraints

In the war against bribery, Bolden (2016) emphasizes that it is vital for organizations to identify all restrictions that arise from within. For instance, every employee that acts against the firm’s anti-bribery policies should be detected, and the management measures applied. Punishment against such acts has proven to discourage other staff members from partaking in any bribery activities.

Training

Carnall (2018) research suggests that investing in training techniques that are directed towards minimizing bribery practices greatly aids in reducing bribery practices in businesses. Additionally, employing strategic measures during hiring ensures that individuals with high integrity are recruited (Andriopoulos, 2001). Consequently, bribery levels have been significantly reduced.

Strategies and Competencies

As per Wakayama (2017), management is the largest corruption catalyst since it oversees and directs the overall functionality of an organization. In contemporary times, gender inequality in managerial positions has contributed to high degrees of corruption in firms’ practices. Men are more prone to engaging in corrupt activities compared to women (Tuliao & Chen, 2017). Females are more ethical and future-oriented thus refrain themselves from getting involved in corrupt activities. Wellalage et al. (2018) research findings portray that organizations run by women have proved to develop more due to the lesser consequences corrupt females face. For instance, firms that are associated with corrupt male managers tend to lose credit credibility more than those led by women. Additionally, many organizations have a culturally incompetent managerial team who often engage in corrupt practices. Such individuals have no moral backgrounds to reflect their action on hence do not put ethics into considerations while running a company (Rey et al., 2017). According to Zeynep et al. (2017), management departments lack effective techniques that help nurture indigenous cultural competence. For effective managerial behavior, Andriopoulos (2001) states that employers are required to formulate strategies such as developing a conducive environment that will ensure the success of anti-bribery policies of organizations. He further notes that management teams that create an anti-corruption culture in organization result in curbing bribery practices. Therefore, the cultures created act as the norm in companies’ activities and are naturally adopted by both old and new staff members. Moreover, Carnall (2018) states that to thrive in the set anti-bribery indigenous culture, a company must formulate regulations that will guide the set norms appropriately. Additionally, Wellalage et al. (2018) state that the employment pool of firms needs to be balanced based on gender to discourage bribery practices.

Implementation of Management Thoughts in Managerial Practices

Bratton & Gold (2017) define management thoughts and managerial practices as two distinct entities. They further explain that the evolution of managerial theories has resulted in a set of policies that help govern the internal operations of organizations. Management thoughts comprise of objectives, strategies that influence firms’ decision making, standards for managing the workforce, ethical considerations, and effective communication channels (Zeynep et al., 2017). According to Heding et al., (2015), managerial thoughts are influenced by three major forces, that is, political structure, economic status, and social forces.

Managerial practices are the actual activities managers undertake (Bratton & Gold, 2017). Such practices entail creating conducive and innovative working environments, allocation of resources in the organization, enforcing regulations of the company, and overseeing the overall functionality of the business. The task is faced with a lot of challenges that cause managers to stray from management thoughts (Heding et al., 2015). According to Zeynep et al., 2017, effective curbing of bribery practices in firms can be eradicated through collaborative work of managerial thought and managerial practices. That is, managers ensuring that their actions are aligned with the set management thoughts.

Effective Management of Workforce in Organizations

Bolden (2016) states that effectively managing employee pools results in content staff hence increasing productivity. Similarly, when employees are satisfied with their working conditions, they refrain from engaging in illegal activities such as bribery that may harm the firm (Tuliao, & Chen, 2017). As per Andriopoulos (2001) research, there is a range of activities that ensures the effective management of employees. For instance, the research notes that it is important to employ essential strategies in the recruitment phase. Managers are required to hire a skilled and innovative workforce who will work as per the company’s guidelines. Moreover, Zeynep et al., (2017) found out that hiring employees with integrity helps in reducing bribery practices.

Andriopoulos (2001) further states that constantly rewarding employees on achievement regardless of how small results in a productive workforce. Moreover, the management team should implement a democratic approach in running the business. Consequently, employees will have room to air their opinions hence help in promoting innovation and teamwork (Bolden, 2016). Effective management of employees further entails continuous supervision of performance. Therefore, the management team can identify any mishaps such as bribery practices and deal with them accordingly (Onofrei & Grădinaru, 2017). Managers need to employ effective workforce management strategies in the implementation of anti-bribery policies.

Conclusion

Bribery practices in businesses are evident globally. The extent of the practices varies depending on the bribery policies of a country. Developing countries are characterized by higher degrees of bribery practices as compared to developed nations. Bribery has both negative and positive implications. Researchers have uncovered that bribery adversely affects cross-border businesses, undermines competition, obstructs entry into the market, and obstructs democracy. Positive effects of bribery are short-term and include attainment of more profits and quicker decision-making processes.

There are different ways that can be implemented to curb bribery practices within an organization. For instance, effective management of the workforce ensures that employees work ethically. Additionally, appropriate organizational processes such as employees’ involvement in the success of anti-bribery policies implementation; identification of internal constraints and managing them accordingly; developing objective-oriented practices, further enhance the fight against bribery practices. Similarly, developing an anti-bribery indigenous culture and balancing gender composition in the employees’ pool aids in bribery eradication. Researcher further found out that collaborative working of anti-bribery management thought and managerial practices helps in the decline of bribery practices in businesses.

References

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