In today’s fast-moving world, the problem of corruption has reached its peak. It has become a serious social problem for the whole world’s community. Despite numerous measures that are taken both on national and international levels, it is estimated that the rates of corruption have considerable grown throughout the world. In many respects, this is explained by the peculiarities of this social phenomenon and the diversity of its forms and manifestations. One of the most widely spread forms of corruption is corporate corruption, which is associated with both positive and negative sides as will be analyzed further.
Corporate corruption is a social phenomenon that implies an illegal use of one’s authority for one’s own selfish purposes causing harm to the functioning of a corporation. This is usually related to the use of material resources of the company. Corporate corruption is one of the main forms of corruption in the private sector. This type of corruption cannot be restricted to the violation of criminal laws and usually takes place in the sphere of corporate management.
On the one hand, corporate corruption is associated with a number of negative outcomes as it represents a direct violation of corporate and criminal laws. Thus, in many countries the managers responsible for the acts of corruption are prosecuted. This type of corruption leads to an inappropriate use of corporate resources for one’s own benefit. The negative side of corporate corruption is the fact that it causes much harm to the functioning of the corporation hindering its overall performance. In this regard, it should be noted that corporate corruption is associated with not only economic benefits for a person involved in corruption, but also administrative and political ones. This means that corporate corruption causes damage to different spheres of social life. Thus, there should be taken measures to eliminate it. Many studies indicate several other negative economic consequences of corporate corruption.
First, the resources gained by means of bribes often take a form of property or personal savings kept in foreign banks, which negatively affects the performance of a corporation. Second, the counterproductive projects are financed by ineffective sponsors. Third, corruption hinders the flow of material resources, which are often relocated. Fourth, corruption interferes with the realization of macroeconomic policy. This means that corporate corruption encourages the realization of personal interests, rather than the interests of a corporation. Furthermore, corruption leads to the deformation of the structure of expenditures, so that the strict control of the money flow becomes impossible. Finally, bribes and other forms of corruption result in additional taxation. As a result, corporate corruption hinders the adequate flow of investments, especially investments in foreign businesses.
On the other hand, there are certain positive functions of corporate corruption. In fact, debates on corruption have shown that there are not only negative consequences of corruption, but also positive ones. Thus, the studies on corruption indicate that it represents a mechanism of getting rid of obsolete stereotypes and norms. Corporate corruption is often justified from a functional point of view. This means that corruption gives an opportunity to relocate the resources of previous leaders for the benefit of the new ones. This is a rational alternative to a military struggle for power. The rapid development of different countries can be explained by a positive contribution of corruption that helps the corporations to avoid conflicts and be more flexible. Furthermore, corporate corruption is considered to positively stimulate the entrepreneurships in terms of eliminating a range of bureaucratic taboos. It also contributes to the successful functioning of the corporation. Finally, corporate corruption helps to examine the real correlation of supply and demand for the goods and services provided by a given corporation.