68
1 Corruption from a Cross-Cultural Perspective J. N. Hooker Carnegie Mellon University University of Glasgow March 2010

Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

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Page 1: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

1

Cor

rupt

ion

from

a

Cro

ss-C

ultu

ral P

ersp

ectiv

eJ.

N. H

ooke

r

Car

negi

e M

ello

n U

nive

rsity

Uni

vers

ity o

f Gla

sgow

Mar

ch 2

010

Page 2: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

2

Cav

eats

on

cultu

re…

�E

very

cul

ture

is d

iffer

ent.

�A

ny b

rief d

iscu

ssio

n va

stly

ove

rsim

plifi

es.

Page 3: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

3

Cav

eats

on

cultu

re…

�I a

m n

ot s

tere

otyp

ing

indi

vidu

als

in a

cul

ture

.�

Eve

ry c

ultu

re h

as th

e fu

ll ra

nge

of p

erso

nalit

ies.

�C

ultu

res

diff

er o

n ho

w th

ese

pers

onal

ities

fit i

nto

a sy

stem

.�

Cul

ture

s ar

e lik

e ec

osys

tem

s.

Page 4: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

4

Cav

eats

on

cultu

re…

�I m

ake

no ju

dgm

ents

abo

ut w

hich

cul

ture

is

“bet

ter.

Page 5: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

5

Obl

igat

ion

to a

noth

er c

ultu

re

�M

ost c

ultu

res

have

nor

ms

for

deal

ing

with

oth

er

cultu

res.

�E

ven

the

Wes

t doe

s, d

espi

te it

s un

iver

salis

m:

�A

void

act

ion

that

, if g

ener

ally

ado

pted

, wou

ld u

nd

erm

ine

a cu

ltura

l sys

tem

it p

resu

pp

ose

s.

Page 6: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

6

Wha

t is

corr

uptio

n?

�C

orru

ptio

n co

rru

pts

.

Page 7: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

7

Wha

t is

corr

uptio

n?

�C

orru

ptio

n co

rru

pts

.

�It

unde

rmin

es th

e sy

stem

.

Page 8: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

8

Wha

t is

corr

uptio

n?

�C

orru

ptio

n co

rru

pts

.

�It

unde

rmin

es th

e sy

stem

.

�D

iffer

ent c

ultu

res

use

radi

cally

diff

eren

t sy

stem

s to

get

thin

gs d

one.

�R

ule-

base

d�

Rel

atio

nshi

p-ba

sed

Page 9: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

9

Cul

tura

l sys

tem

s

�R

ule-

base

d =

life

is o

rgan

ized

prim

arily

by

rule

s.�

Aus

tral

ia, E

urop

e, N

orth

Am

eric

a

Page 10: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

10

Cul

tura

l sys

tem

s

�R

elat

ions

hip-

base

d =

life

is o

rgan

ized

prim

arily

ar

ound

per

son

al r

elat

ion

ship

s.�

Afr

ica,

Asi

a, M

iddl

e E

ast,

Sou

th A

mer

ica

Page 11: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

11

Cor

rupt

ion

as c

ultu

rally

def

ined

�W

hat i

s co

rrup

t her

e m

ay b

e ac

cept

able

else

whe

re

�F

or e

xam

ple:

pur

chas

ing

agen

t�

Age

nt m

ay a

war

d co

ntra

ct b

ased

on

qu

alit

y o

f th

e b

ids

or b

ased

on

per

son

al c

on

nec

tio

ns.

�H

ere,

cro

nyis

m is

cor

rupt

ing.

�D

ue to

co

nfl

ict

of

inte

rest

(co

mpa

ny v

s. a

gent

)

Page 12: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

12

Cor

rupt

ion

as c

ultu

rally

def

ined

�In

muc

h of

Asi

a (f

or e

xam

ple)

, cro

nyis

m is

fo

unda

tion

for

trus

t.�

The

re is

no

co

nfl

ict

of

inte

rest

.

�C

ompa

ny w

ants

trus

ted

supp

liers

.

Page 13: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

13

Cor

rupt

ion

as c

ultu

rally

def

ined

�W

hat i

s ac

cept

able

her

e m

ay b

e co

rrup

t el

sew

here

Her

e, la

wsu

its a

re r

outin

e.�

Dis

pute

s ar

e re

solv

ed b

y ap

pea

l to

th

e ru

les.

�A

ssum

e in

div

idu

al r

esp

on

sib

ility

.

Page 14: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

14

Cor

rupt

ion

as c

ultu

rally

def

ined

�In

Jap

an, l

awsu

its a

re c

orru

ptin

g.�

The

y w

ould

un

der

min

e ra

ther

th

an r

esto

re h

arm

on

y.�

Yas

umot

o T

akag

i of J

apan

Airl

ines

�S

hohe

i Naz

awa

of Y

amai

chi S

ecur

ities

.

�M

ovin

g to

ano

ther

firm

in m

id-p

roje

ct.

Page 15: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

15

Cor

rupt

ion

as c

ultu

rally

def

ined

�W

hat i

s co

rrup

t her

e an

d el

sew

here

may

be

corr

upt f

or d

iffer

ent r

easo

ns�

Her

e, b

riber

y is

cor

rupt

bec

ause

it u

nd

erm

ines

th

e ru

les.

�T

here

mus

t be

a ge

nera

l exp

ecta

tion

that

peo

ple

will

ob

ey t

he r

ules

.

�In

rel

atio

nshi

p-ba

sed

coun

trie

s, b

riber

y is

cor

rupt

be

caus

e it

un

der

min

es p

erso

nal

rel

atio

nsh

ips.

�It

is a

sho

rt-c

ut a

roun

d re

latio

nshi

p bu

ildin

g.

Page 16: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

16

Kod

ak in

Tai

wan

�U

.S. m

anag

er w

as p

oste

d in

Kod

ak’s

Tai

wan

br

anch

.�

He

met

with

a te

am r

epre

sent

ing

a po

tent

ial

Tai

wan

ese

supp

lier.

Page 17: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

17

Kod

ak in

Tai

wan

�U

.S. m

anag

er w

as p

oste

d in

Kod

ak’s

Tai

wan

br

anch

.�

He

met

with

a te

am r

epre

sent

ing

a po

tent

ial

Tai

wan

ese

supp

lier.

�W

hen

the

team

left,

he

notic

ed th

at o

ne o

f the

m

left

his

brie

fcas

e.

Page 18: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

18

Kod

ak in

Tai

wan

�W

hile

look

ing

for

the

owne

r’s n

ame,

he

foun

d th

e ca

se to

be

full

of c

ash

.

Page 19: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

19

Kod

ak in

Tai

wan

�A

t lea

st th

ey a

re o

ffer

ing

a b

ribe

inst

ead

of

dem

andi

ng o

ne.

�In

som

e in

dust

ries,

you

can

’t ge

t you

r fo

ot in

the

door

with

out p

ayin

g so

meo

ne o

ff.

Page 20: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

20

Kod

ak in

Tai

wan

�A

t lea

st th

ey a

re o

ffer

ing

a b

ribe

inst

ead

of

dem

andi

ng o

ne.

�In

som

e in

dust

ries,

you

can

’t ge

t you

r fo

ot in

the

door

with

out p

ayin

g so

meo

ne o

ff.

�K

ickb

acks

(“c

omm

issi

ons”

) ar

e ro

utin

e in

Ta

iwan

but

cor

rupt

ing

none

thel

ess.

�W

hy a

re th

ey c

orru

ptin

g?

Page 21: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

21

Kod

ak in

Tai

wan

�C

hine

se/T

aiw

anes

e bu

sine

ss is

bas

ed

larg

ely

on fa

mily

and

/or

guānx

ì re

latio

nshi

ps.

�G

uānx

ì is

Man

darin

Chi

nese

for

“con

nect

ion”

or

“rel

atio

nshi

p.”

�G

uānx

ì de

velo

ps b

y do

ing

mut

ual f

avor

s an

d bu

ildin

g m

utua

l obl

igat

ions

. �

The

favo

rs a

re n

ot

quid

pro

quo

. T

hey

cem

ent

the

rela

tions

hip.

Page 22: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

22

Kod

ak in

Tai

wan

�G

uānx

ì pr

ovid

es a

bas

is fo

r lo

ng

-ter

m tr

ust

rela

tions

hips

. �

It is

unc

ivili

zed

to r

eneg

e on

guā

nxì.

�G

iven

a p

rope

r re

latio

nshi

p,

one’

s w

ord

is h

is b

ond.

�Le

gal e

nfor

cem

ent i

s irr

elev

ant.

Page 23: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

23

Kod

ak in

Tai

wan

�B

riber

y sh

ort

-cu

ts th

e pr

oces

s of

bui

ldin

g guānx

ì .

�R

elat

ions

hip-

base

d sy

stem

s te

nd to

slid

e in

to

brib

ery.

�A

s ru

le-b

ased

sys

tem

s ca

n sl

ide

into

che

atin

g.

�B

riber

y/ki

ckba

cks

do n

ot p

rovi

de th

e st

able

, lo

ng-t

erm

rel

atio

nshi

ps r

equi

red

by a

com

plex

ci

viliz

atio

n.

Page 24: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

24

Kod

ak in

Tai

wan

�O

ne s

houl

d no

t exa

cerb

ate

this

wea

knes

s in

the

syst

em.

�B

riber

y m

ay s

omet

imes

be

nece

ssar

y,

but o

ne s

houl

d no

t go

alon

g w

ith it

si

mpl

y to

“do

as

the

Rom

ans

do.”

Page 25: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

25

Kod

ak in

Tai

wan

�W

hat t

o do

abo

ut th

e br

iefc

ase?

�T

he m

anag

er d

ispa

tche

d a

trus

ted

subo

rdin

ate

to

retu

rn th

e br

iefc

ase

to th

e ow

ner.

�H

e se

nt a

vag

uely

wor

ded

mes

sage

to th

e ow

ner’s

bos

s, s

tatin

g th

at h

e w

as r

etur

ning

lost

pr

oper

ty.

�T

he o

wne

r cl

early

got

the

cash

from

his

bos

s.

�O

ther

wis

e th

e m

anag

er w

ould

thi

nk th

e m

oney

was

de

liver

ed.

Page 26: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

26

Kod

ak in

Tai

wan

�C

rony

ism

≠br

iber

y�

Res

po

nsi

ble

cro

nyis

m is

not

cor

rupt

ing.

�C

an b

e ad

vant

ageo

us in

Con

fuci

an c

ultu

re.

�P

robl

emat

ic in

go

vern

men

t�

Chi

nese

civ

il se

rvic

e ex

ams.

Han

Dyn

asty

, >

200

0 ye

ars

ago.

Exa

m

boot

hs18

73

Page 27: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

27

Effi

cien

cy v

s. S

tabi

lity

�B

riber

y is

a n

atur

al w

eakn

ess

of

rela

tions

hip-

base

d cu

lture

s.�

It is

a s

hort

cut t

o re

latio

nshi

p bu

ildin

g.

Page 28: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

28

Effi

cien

cy v

s. S

tabi

lity

�C

heat

ing

is a

nat

ural

wea

knes

s of

rul

e-ba

sed

cultu

res.

�M

ore

relia

nce

on g

uilt

and

resp

ect f

or r

ules

than

su

perv

isio

n.

Page 29: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

29

Effi

cien

cy v

s. S

tabi

lity

�R

ule-

base

d, tr

ansp

aren

t bus

ines

s is

fas

t an

d e

ffic

ien

t.�

Can

do

busi

ness

with

str

ange

rs.

�N

o ne

ed to

bui

ld p

erso

nal t

rust

rel

atio

nshi

ps.

�B

ut it

is u

nst

able

.�

Rel

ies

on fu

nctio

nal p

oliti

cal/l

egal

env

ironm

ent

�V

ulne

rabl

e to

une

thic

al b

ehav

ior

–e.

g.,

finan

cial

cris

is

Page 30: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

30

Effi

cien

cy v

s. S

tabi

lity

�R

elat

ions

hip-

base

d bu

sine

ss is

slo

wbu

t ca

n be

ver

y st

able

.�

Bui

lt gr

eat c

ivili

zatio

ns.

�S

urvi

ved

1000

s of

yea

rs o

f po

litic

al u

phea

val i

n C

hina

(o

ldes

t liv

ing

civi

lizat

ion)

..

Page 31: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

31

Enr

on in

Indi

a�

The

Dab

hol e

lect

ric p

ower

pla

nt.

�In

dia’

s la

rges

t-ev

er p

rivat

e fo

reig

n in

vest

men

t.�

Spe

arhe

aded

by

Enr

on (

1992

).�

Bec

htel

& G

E

also

invo

lved

.

Page 32: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

32

Enr

on in

Indi

a�

Loca

ted

at D

abho

l in

Mah

aras

htra

Sta

te (

1992

).

�A

ddre

ssed

gro

win

g In

dian

eco

nom

y &

un

relia

ble

elec

tric

ity s

uppl

y.�

Spe

arhe

aded

by

Enr

on e

xecu

tive

Reb

ecca

Mar

k.�

In p

rinci

ple,

a

brill

iant

idea

.

Dab

hol

Page 33: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

33

Enr

on in

Indi

a�

Reb

ecca

Mar

k of

Enr

on

obta

ined

gua

rant

ee o

f 25%

R

OI f

rom

Indi

an g

over

nmen

t.�

Yet

ele

ctric

ity p

rice

proj

ecte

d to

be

2 to

5 ti

mes

pre

vaili

ng r

ate.

�D

ue p

artly

to r

elia

nce

on L

NG

fr

om E

nron

sub

sidi

ary

in Q

atar

. �

Her

flam

boya

nt m

anne

r at

trac

ted

med

ia a

ttent

ion.

Page 34: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

34

Enr

on in

Indi

a�

Indi

an p

oliti

cal s

ituat

ion

�C

ongr

ess

Par

ty w

as in

pol

itica

l tro

uble

.�

Par

ty o

f Neh

ru, I

ndira

Gan

dhi,

Raj

iv G

andh

i, S

onia

G

andh

i.

�A

ccus

ed o

f cor

rupt

ion.

Page 35: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

35

�B

JP (

Bha

ratiy

a Ja

nata

Par

ty)

expl

oite

d H

indu

na

tiona

lism

& d

isco

nten

t with

Con

gres

s pa

rty.

�H

indu

nat

iona

lists

des

troy

mos

que

at

Ayo

dhya

in 1

992,

with

bac

king

from

A

. B. V

ajpa

yee

and

BJP

. R

iots

res

ult

in 2

000

deat

hs.

�B

JP c

omes

to p

ower

in 1

998,

with

V

ajpa

yee

as P

.M.

Enr

on in

Indi

a�

Indi

an p

oliti

cal s

ituat

ion

�C

ongr

ess

Par

ty w

as in

pol

itica

l tro

uble

.�

Par

ty o

f Neh

ru, I

ndira

Gan

dhi,

Raj

iv G

andh

i, S

onia

G

andh

i.

�A

ccus

ed o

f cor

rupt

ion.

Page 36: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

36

Enr

on in

Indi

a�

Bec

ame

an is

sue

in B

JP

cam

paig

n.�

BJP

lead

er G

opin

ath

Mun

de

stat

ed…

“It i

s re

ason

ably

cle

ar th

at s

ever

al

unse

en fa

ctor

s an

d fo

rces

see

m to

ha

ve w

orke

d to

get

Enr

on w

hat i

t w

ante

d.”

�Jo

urna

list R

aghu

Dha

r re

port

ed

Enr

on’s

off

er o

f $1

mill

ion

per

year

for

him

to k

eep

quie

t.

�E

nron

pla

yed

into

BJP

’s h

and.

Page 37: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

37

Enr

on in

Indi

a�

Muc

h pu

blic

pro

test

.�

Am

nest

y In

tern

atio

nal c

ited

roug

h tr

eatm

ent o

f de

mon

stra

tors

.

Page 38: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

38

Enr

on in

Indi

a�

Indi

an g

over

nmen

t bac

ked

off f

rom

dea

l afte

r B

JP to

ok p

ower

.�

Bus

h ad

min

istr

atio

n pr

essu

red

Indi

a�

Vis

its fr

om D

ick

Che

ney,

Col

in P

owel

l.

�D

ropp

ed th

e m

atte

r af

ter

9/11

, Enr

on tr

oubl

es.

Page 39: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

39

Enr

on in

Indi

a

�R

ebec

ca M

ark

pass

ed o

ver

for

Enr

on C

EO

.�

Ken

Lay

cho

se J

effr

ey S

killi

ng

Page 40: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

40

Enr

on in

Indi

a

�P

ower

pla

nt s

at m

ostly

idle

until

200

9.�

Bei

ng b

roug

ht o

nlin

e sl

owly

by In

dian

gov

ernm

ent.

Page 41: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

41

Enr

on in

Indi

a�

Less

ons

�B

riber

y in

the

sens

e of

influ

ence

ped

dlin

g is

cor

rupt

.�

Eve

n if

it is

rat

her

freq

uent

.

�“F

acili

tatin

g pa

ymen

ts”

requ

ire a

diff

eren

t ana

lysi

s.

�U

nder

stan

d th

e po

litic

al a

nd c

ultu

ral s

ituat

ion.

Page 42: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

42

Enr

on in

Indi

a�

How

to g

et th

ings

don

e�

Wor

k th

roug

h co

nnec

tions

�F

amily

, fr

iend

s of

fam

ily.

�C

onta

cts

with

hig

h-ra

nkin

g pe

ople

.

Page 43: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

43

LKK

in C

hina

�LK

K (

Lee

Kum

Kee

) fo

od a

nd h

ealth

pro

duct

s�

Fou

nded

in r

ural

Gua

ngdo

ng p

rovi

nce

in 1

888.

�B

y 20

05, 3

900

wor

kers

.

�M

arke

ts in

80

coun

trie

s.

Page 44: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

44

LKK

in C

hina

�LK

K�

Lee

Man

Tat

is g

roup

cha

irman

.�

App

oint

ed 4

son

s to

hea

dco

mpa

ny d

ivis

ions

.

�S

eeks

pro

fess

iona

l man

ager

sw

ho a

re “

cultu

rally

attu

ned

to

the

firm

and

to fa

mily

as

CE

Os

of it

s di

visi

ons”

Page 45: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

45

LKK

in C

hina

�LK

K�

Res

pons

ible

nep

otis

m n

eed

not b

e co

rrup

ting

in a

Con

fuci

an c

onte

xt.

Page 46: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

46

Nor

tel i

n C

anad

a�

Nor

tel N

etw

orks

�B

ill-a

nd-h

old

tran

sact

ions

.�

Cus

tom

er ta

kes

deliv

ery

next

qu

arte

r.

�N

orte

l rec

ords

re

venu

e th

is

quar

ter.

�F

or p

urpo

se o

f in

com

e sm

oo

thin

g.

Page 47: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

47

Nor

tel i

n C

anad

a�

Nor

tel N

etw

orks

�G

AA

P c

ondi

tions

for

bill-

and-

hold

�Le

gitim

ate

busi

ness

rea

son.

�C

usto

mer

req

uest

s it.

�N

orte

l off

ered

ince

ntiv

es to

cus

tom

ers…

�T

o re

ques

t bill

-and

-hol

d in

writ

ing.

�E

.g.,

disc

ount

s.

Page 48: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

48

Nor

tel i

n C

anad

a�

Acc

ount

ing

frau

d�

Lack

of t

ran

spar

ency

is c

orru

ptin

g�

Fam

ily-b

ased

bus

ines

s is

cul

tura

lly in

feas

ible

in

muc

h of

the

Wes

t�

Fam

ilies

are

too

wea

k to

with

stan

d st

ress

.

�M

ust t

here

fore

do

busi

ness

with

str

ange

rs.

�R

equi

res

tran

spar

ency

.

�T

his

is th

e pu

rpos

e of

acc

ount

ing.

Page 49: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

49

Nor

tel i

n C

anad

a�

A c

ase

of li

ght s

uper

visi

on�

Exe

cutiv

es a

rres

ted

June

200

8, b

ut…

�P

erha

ps o

nly

beca

use

of e

greg

ious

vio

latio

ns o

ver

year

s.

�N

orte

l file

d fo

rba

nkru

ptcy

inJa

nuar

y 20

09.

Fra

nk D

unn,

form

er N

orte

l CE

O

Page 50: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

50

Cel

tel i

n W

est A

fric

a�

Wire

less

ser

vice

foun

ded

in 1

998.

�M

o Ib

rahi

m (

Sud

anes

e) &

Ter

ry R

hode

s (B

ritis

h)

Page 51: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

51

Cel

tel i

n W

est A

fric

a�

Wire

less

ser

vice

foun

ded

in 1

998.

�M

o Ib

rahi

m (

Sud

anes

e) &

Ter

ry R

hode

s (B

ritis

h)�

Pur

chas

ed $

750K

op

erat

ing

licen

se,

appr

oval

bog

ged

dow

n.

Page 52: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

52

Cel

tel i

n W

est A

fric

a�

Wire

less

ser

vice

foun

ded

in 1

998.

�M

o Ib

rahi

m (

Sud

anes

e) &

Ter

ry R

hode

s (B

ritis

h)�

Pur

chas

ed $

750K

op

erat

ing

licen

se,

appr

oval

bog

ged

dow

n.�

Req

uest

ed m

eetin

g w

ith o

ffic

ials

.�

Aw

kwar

d si

lenc

e af

ter

intr

oduc

tions

.

Page 53: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

53

Cel

tel i

n W

est A

fric

a

�F

ax h

ad r

eque

sted

$50

K b

ribes

for

mee

ting.

�W

as s

ent t

o A

mst

erda

m o

ffice

that

mor

ning

.

Page 54: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

54

Cel

tel i

n W

est A

fric

a�

Brib

ery

repr

esen

ts c

orru

ptio

n of

vill

age

lead

ersh

ip

cust

oms.

�R

atio

nal r

edis

trib

utio

n of

wea

lth t

hrou

gh le

ader

’s

patr

onag

e.

�U

nder

min

ed b

y m

igra

tion

of m

en fr

om v

illag

es.

Page 55: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

55

Sce

nario

: Mid

dle

Eas

t

�M

BA

stu

dent

in T

urke

y.�

Pay

men

t dem

ande

d at

pas

spor

t con

trol

.�

Not

act

ually

co

rrup

ting.

�O

ther

brib

es

may

be

corr

uptin

g.

Page 56: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

56

Sce

nario

: Mid

dle

Eas

t

�W

asta

in th

e M

iddl

e E

ast

�A

utho

rity

of s

heik

hs.

�W

asta

as a

cces

s to

influ

entia

l peo

ple.

�G

ood

was

ta a

nd b

ad w

asta

Page 57: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

57

Sce

nario

: Kor

ea

�P

erm

it fo

r U

.S. a

ccou

ntin

g fir

m.

�C

onsu

ltant

off

ers

to d

eliv

er a

“gi

ft.”

Page 58: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

58

Sce

nario

: Kor

ea

�P

erm

it fo

r U

.S. a

ccou

ntin

g fir

m.

�C

onsu

ltant

off

ers

to d

eliv

er a

“gi

ft.”

�C

ultu

ral r

ole

of g

ifts.

�T

oken

of g

ratit

ude.

�W

eddi

ng o

r co

ndol

ence

.

Page 59: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

59

Sce

nario

: Kor

ea

�R

egul

atio

n an

d ch

aebo

l.�

Gift

s as

cem

entin

g a

rela

tions

hip

betw

een

busi

ness

and

reg

ulat

or.

Page 60: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

60

Eth

ics

and

pers

onho

od

�W

este

rn c

ultu

res

�H

uman

s ar

e ra

tiona

l, au

tono

mou

s in

divi

dual

s.�

No

indi

vidu

al c

an h

ave

inhe

rent

aut

horit

y.

�F

ocus

on

just

ice,

equa

lity

�R

ules

mus

t hav

eau

thor

ity b

ecau

se

they

are

rea

sona

ble.

�U

nive

rsal

ity o

f rea

son.

Page 61: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

61

Eth

ics

and

pers

onho

od

�M

iddl

e E

aste

rn c

ultu

res

�M

onot

heis

m.

�W

orld

is s

ecul

ar, w

hich

give

s pe

rmis

sion

tom

anip

ulat

e na

ture

.

�O

ne G

od im

plie

s th

atG

od’s

law

mus

t be

univ

ersa

l.

�R

elat

ions

hip-

base

d,bu

t wel

l dev

elop

edle

gal t

radi

tion.

Page 62: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

62

Eth

ics

and

pers

onho

od

�C

onfu

cian

cul

ture

s�

Per

sonh

ood

is d

efin

ed b

y re

late

dnes

s to

ex

tend

ed fa

mily

.�

Per

sona

l aut

horit

y an

d sa

ving

fac

e.

�N

on-f

amily

rel

atio

nsba

sed

on g

uānx

ì.

�D

uty

to fa

mily

and

frie

nds.

�S

tabl

e, n

ontr

ansp

aren

tsy

stem

.

�Ju

stic

e se

cond

ary.

Page 63: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

63

Eth

ics

and

pers

onho

od

�M

any

Afr

ican

cul

ture

s�

Uni

t of h

uman

exi

sten

ce is

the

com

mun

ity.

�In

divi

dual

wel

fare

inse

para

ble

from

com

mun

alw

elfa

re.

�R

edis

trib

utio

nof

res

ourc

es,

perh

aps

by

chie

f.

�S

een

as

dysf

unct

iona

lto

day,

but

may

of

fer

less

ons

in c

omm

unal

cul

ture

.

Page 64: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

64

Eth

ics

and

pers

onho

od

�H

indu

cul

ture

�H

uman

s ar

e de

fined

by

conn

ecte

dnes

s.�

Uni

ty o

f bra

hman

/atm

an is

ref

ined

exp

ress

ion.

�Id

eal i

s im

perf

ectly

real

ized

inne

twor

king

.

�P

roje

ct:

striv

eto

war

d id

eal

rath

er th

anat

tem

pt to

Wes

tern

ize.

Page 65: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

65

Cor

rupt

ion

and

cultu

re

�C

ultu

ral d

iver

sity

�F

orce

d bl

endi

ng o

f cul

ture

s ca

n le

ad to

dy

sfun

ctio

n an

d co

rrup

tion.

�C

orru

ptio

n ca

n of

cou

rse

be in

dige

nous

as

wel

l.

Page 66: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

66

Cor

rupt

ion

and

cultu

re

�C

ultu

ral d

iver

sity

�F

orce

d bl

endi

ng o

f cul

ture

s ca

n le

ad to

dy

sfun

ctio

n an

d co

rrup

tion.

�C

orru

ptio

n ca

n of

cou

rse

be in

dige

nous

as

wel

l.

�B

ut c

oexi

sten

ce p

rese

rves

res

ourc

es fo

r de

alin

g w

ith r

apid

ly c

hang

ing

wor

ld.

�C

ultu

res

have

bor

row

ed f

rom

eac

h ot

her

for

eons

, w

ithou

t sa

crifi

cing

thei

r in

tegr

ity.

Page 67: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

67

Cor

rupt

ion

and

cultu

re

�C

ultu

ral d

iver

sity

�F

orce

d bl

endi

ng o

f cul

ture

s ca

n le

ad to

dy

sfun

ctio

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Page 68: Corruption from a Cross-Cultural Perspectivepublic.tepper.cmu.edu/jnh/corruptionGlasgow.pdfHan Dynasty, > 2000 years ago. Exam booths 1873 27 Efficiency vs. Stability Bribery is a

68

Cor

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and

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