Theoretical Background of Factors Influencing Corporate Corruption: Review of Prominent Theories Explaining Corporate Corruption

Abstract

Purpose: Corruption and deterioration of ethics in business is a persisting problem affecting consumers, businesses and regulators across industries and geographies. The ill effects of corruption are talked about very often in terms of financial losses and periodic market failures apart from loss of fair play in the market for all operating industries. Moreover, the headlines often ignore the factors that prompt actions to engage in corrupt practices by businesses and individual managers. Large number of factors have been attributed to different sources located within and outside the organization in a range of empirical research. Nevertheless, putting the causal explanation of the phenomenon in terms of plausible theoretical frameworks provides researchers and practicing managers a coherent frame of reference to put the causes of corporate corruption into perspective. This research attempts to provide a comprehensive review of a range of prominent theories explaining corporate corruption. It further delves deeply in the theoretical strands arguing in favour and against corruption in business.

Design/Methodology/Approach: This research is essentially exploratory in nature. It prominently employs the secondary sources along with expert consultations from the prominent academics researching in this field. The stages in conducting the study involved extensive literature review followed by discussion with field experts on the strength of explanation provided by a theoretical framework and analysis of its empirical potential. The resultant discussion reflectively brings forth most prominent theories explaining corporate corruption.

Findings: It reflects that theories across social science disciplines may be utilized to provide a good starting point as well as a credible frame of reference to put individual cases of corporate corruption into a comprehensible context and build a unified theory explaining causal factors behind the phenomenon of corporate corruption and address it through institutional measures.

Originality Value: This research proposes that corruption in the corporate world is a persistent phenomenon which requires analytical explanation to address it holistically. It attempts to put forth theories of social science which may be utilized by management researchers to provide a causal explanation of corporate corruption. .

Paper Type: Review of Literature