There are numerous effects of corruption on MNCs. In case their competition engages in such practices, their activity is significantly influenced by this phenomenon. This is because their corrupt competitors can change rules and regulations that do not favor other companies. Therefore, they have to deal with the effects of such situations. This sometimes determines them to modify their activity.
In addition to this, there are situations where employees of certain MNCs are bribed by competitors in order to provide important information on these companies. This is extremely harmful to companies as it can lead to information leaks on strategies, price levels, and other types of investments that these companies intend to make. This means that these MNCs must increase investments in security issues.
In addition to this, MNCs are sometimes forced to become corruptors because some of their competitors do so. In other words, if certain companies provide incentives to state authorities in order to change rules and regulation, or to favor them in certain ways, their competitors are also forced to offer bribes in order to keep up with these changes.
There is little MNCs can do in such situations. The process of fighting corruption requires the joint efforts of individuals, companies, and state authorities. Therefore, MNCs must focus on identifying situations of corruption of any type. The issue in such situations is that corruption charges must be probed with evidence. It can be difficult to prove such accusations. This is because institutions and MNCs involved in such practices have great experience with such activities,...
This usually requires the intervention of international organizations. MNCs can lobby on international level in order to determine organizations to increase their efforts in eradicating or reducing corruption levels. In addition to this, companies must invest in awareness campaigns that focus on demonstrating the effects of corruption on individual level. This is because if individuals understand the effects the corruption determines it is likely that they engage less in such activities, but also provide information in case they have knowledge of corruption cases. It is important that companies understand that it is better to play by the rules and win instead of using corruption practices in order to increase their profits.
Reference list:
1. Begovic, B. (2005). Corruption: Concepts, Types, Causes, and Consequences. Center for Liberal Democratic Studies. Retrieved April 24, 2013 from http://www.cadal.org/documents/documento_26_english.pdf.
2. Country Reports on the Implementation of the OECD Anti-Bribery Convention (2012). OECD. Retrieved April 24, 2013 from http://www.oecd.org/daf/anti-bribery/countryreportsontheimplementationoftheoecdanti-briberyconvention.htm.
3. Kwok, C. & Tadesse, S. (2006). The MNC as an Agent of Change for Host Country Institutions: FDI and Corruption. The William Davidson Institute. Retrieved April 24, 2013 from http://wdi.umich.edu/files/publications/workingpapers/wp882.pdf.
