The Crime of one person ”Corrupted Officials” So What?

What happens in an organization depends on who is sitting at the top!

The Crime of one person “Corrupted Officials” So What? Given the expansion of multinational companies and globalization of goods and services, companies face threats of corruption and bribery when dealing with different governments. Even institutional corruption can lead to the downfall of a long-standing business and tarnish its international image.

The crimes of one person can potentially bring an entire organization to its knees. White collar crimes take many forms, such as money laundering, frauds, schemes, bribery and embezzlement.

Businesses have a long way to go embed a corporate culture that is free of corruption and bribery. Here’s why you need to revise policies every year to detect and mitigate corrupt practices before your business incurs huge losses.

Diminished resource capacity

In case of corrupt officials, prices of goods and services would increase. The money would be pocketed into private accounts instead of being invested in the progress of business. Corrupt individuals could sell commodities at inflated prices, damaging the corporation’s competitive edge and yielding low returns. The company would ultimately begin going into loss and lose capacity for capital formation and future production of goods and services.

Furthermore, corruption also affects human resources. Corrupt practices and nepotism may reduce employee morale and motivation to work for the organization. The corporation would then have high employee turnover rates. If corruption goes undetected or if corrupt individuals continue to be favored over honest individuals, the corporation is likely to be taken over by dishonest managers who take bribes and commit more crimes for private monetary gains or vested interests.

Weak developmental capacity

Investors would be reluctant to collaborate with individuals or organizations that are known for their corrupt practices. If investors are seeking new projects or selling assets for business expansion, it could become difficult if paying bribes is required. If your business has a criminal record, investors would be unwilling to collaborate with your firm.

Inefficiency

Productivity levels of employees plummet if corrupt individuals are getting away with crimes or receiving undue preference when a more deserving individual could be in their place. Inefficiencies of the organization increase manifold when the resources or assets of the organization are misused, misrepresented and abused for private monetary gains.

Once the corrupt practices of an organization hit the spotlight, individuals would perceive the organization with distrust and lose respect. The resources of the organization that could have been used for best interests of the organization, as well as consumers, are diverted to unlawful private gains. There would be lack of resources to maintain operations of an organization. Furthermore, court cases may cause corporations to lose hefty amounts of money.

Increased opportunities for crime

Institutional corruption trickles down if there are black or shadow markets involved or if the money of the organization is going to illegitimate sources. Corrupt practices increase incentive for investing in black markets, organized criminal groups and engaging in illegal trading activities. White collar crimes infiltrate different levels of the organization.

The implication of corruption at institutional is evident from case studies of third-world countries that are facing social, economic and administrative costs due to corrupt officials. Corruption has far-reaching consequences for the organization.

Unwilling shareholders and investors

Investors and shareholders lose trust in the organization. No one wants to invest in or collaborate with an organization that has a criminal record due to fear of failure. Organizations lose sales and competitive edge. There would be slow or no growth when investors turn away.

Societal Effects

When businesses engage in white collar crimes and ransack consumers, the impacts are bound to trickle down to society. When resources are misused for private gain when they could have been utilized for productive pursuits, the nation’s wealth starts depleting.

When resources are diverted into the wrong hands, it would create an imbalance in business operations. When bribery and nepotism are practiced freely, corrupt officials would have more incentive to win and honest workers would lose out.

If organizations lack stringent policies to punish corrupt officials, these officials would be allowed to get away and continue engaging in corrupt practices. Decisions would be made for the wrong reasons and that will have negative consequences. Workers would begin getting contracts on the basis of kickbacks. Organizations would dismiss what is in the best interests of the community and environment.

Individuals would be selected for employment on the basis of value of their sources rather than merit. Corruption comes at the cost of public welfare, healthcare, education, human rights and freedom of the community. Some people could lose their lives in the fight against corruption.

If an organization comes under suspicion for the crimes of one employee, it may have to pay heavy fines to hire an attorney and lose millions in conviction charges. If corruption is allowed to persist, people and future generations would become dependent on corrupt practices to maintain their livelihood and provide for their families.

Due to the global nature of businesses, it is difficult for corporations to devise anti-corruption or anti-bribery policies that are compatible with a certain country’s political, social, economic and administrative framework. Companies need to monitor for signs of corruption and help employees understand the nature and consequences of corruption.

Organizational policies need to be examined and updated regularly to adapt to changing environment and as criminals come up with new tactics to carry out criminal activities.

If corruption becomes deeply rooted into the organizational structure, employees would feel that dishonesty, bribery and corruption are the way to conduct business. Instead of working towards accomplishing organizational goals, workers would resort to illicit means to acquire money, which would become part of the business culture if unstopped and workers do not face the consequences of their actions.

Firms need to establish a culture of ethics that influences behavior, actions and decisions of employees. This is a long process and requires patience, training and resources.

Organizations need to clarify to employees which offers are acceptable and which offers could have legal consequences. Employees should be trained to differentiate between the right and wrong decisions and how their decisions could impact the organization and their lives.

It’s important to select morally upright leaders who would support and work with employees to achieve organizational goals. Leaders should facilitate a culture of integrity to mitigate unethical practices. What happens in an organization depends on who is sitting at the top. Ethical considerations should be taken seriously.

1 Comment
  1. Ahmad Rawaqah says

    The most dangerous means of management is to raise the level of delegation to others and not to stand fully on the events of the establishment of the company and strengthen it and the reason lies in the lack experience owners and leads this administrative weakness to the exploitation opportunities for corruption and double standard work with competing companies by some staff.

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