Corporate corruption is a widespread phenomenon that persists in the functioning of both public and private companies of differing size, performance, industry, and national origin. As it generates negative effects both within and outside the organization, corporate corruption has been the subject of scholarly research. Yet, despite attempts to understand its antecedents and consequences, companies continue to struggle to eliminate corruption in their business practices. Thus, the overarching research question for this dissertation is "Why do companies continue engaging in corruption?"
To answer this research question, I focused on the topic of organizational corruption control, i.e., a set of mechanisms that purposefully target the prevention of corrupt practices within an organization. Specifically, I investigated the trident of organizational corruption control via its effects and implications on three constructs - corporate social performance, opportunity attractiveness of organizational corruption and corporate corruption recidivism. Using distinct methodologies, I examined corporate corruption control in three separate studies to address 1) the effect of corruption control on the opportunity attractiveness of organizational corruption 2) the effect of corruption control on corporate social performance and 3) the implication of ineffective corruption control on organizational corruption recidivism. Based on interdisciplinary theoretical perspectives and several secondary data sources, the hypothesized effects were empirically tested and insights were derived from a multiple case study approach.
The three studies used different firm samples. Study 1 was based on the data of the United States enforcement actions for violations of the 1977 Foreign Corrupt Practice Act (FCPA) formally prohibiting foreign bribery; firm-level data from the Bloomberg terminal; and a country-level measure from Worldwide Governance Indicators. In Study 1 (N=71 firms involved in foreign bribery), results supported hypotheses that regulatory sanctioning in host countries and bureaucratic controls at a firm level were negatively correlated with corruption opportunity attractiveness. Furthermore, vigilance controls help strengthen negative effect of bureaucratic controls on corruption opportunity attractiveness. Study 2 was based on reports of anti-corruption programs of the world's largest companies from Transparency International, corporate social performance scores from CSRHub, and firm-level financial indicators from the Bloomberg terminal. The findings of Study 2 (N=102 firms) supported hypothesis that corporate corruption controls positively affect Sustainable Resource Management, a sub-dimension of CSP. Importantly, the use of a cross-lagged design helped to specify that the relationship between Corruption Controls and CSP dimensions is not reciprocal (2-way) as was previously discussed in the literature. Study 3, was based on 6 cases of corruption recidivists identified via FCPA enforcements' database, and utilized data from court proceedings, annual reports, and news articles. Data were coded following prescribed steps to arrive at categories and themes. An inductive qualitative analysis performed in Study 3 resulted in a descriptive framework of ingenious deviance that underpins the profile of corporate corruption recidivists. The analysis revealed that a) a combination of underlying contextual and situational factors provided fertile ground for corruption, b) the phenomenon of recidivism occurred in the presence of multiple competing logics, and c) internal controls were subverted through ingenious deviance to facilitate bribery.
