Corruption And Bribery Essay

Corruption and bribery affect business directly and indirectly and below is a list of negative effects of corruption on the main systems of our modern society.

Legal: Corrupt practices undermine the rule of law, weakens trust in public institutions and challenges democratic principles. According to the Corruption of foreign public officials Act, there are many legal fees and penalties to those who break any part of the act, which include; jail time, fines, and a bad reputation on the individual and the company (Government of Canada, 2014) . Corruption can affect every sector and level of the government, from the top executive, legislative and judicial branches down to regional and local officials, thereby reducing its efficiency.
It presents therefore a potential threat to all sectors and institutions within a country. Higher corruption in a society means that the government must spend more tax money on anti-corrupt practices affecting every person’s disposable income. Corruption is directly correlated with the rate of criminal activity and ends up feeding the black market and organized criminals. Governments around the world are noticing the increase in corruption and its negative effects so much so, that there are many institutions that have emerged in order to slowdown and abolish corrupt practices in businesses. This makes business much more complex due to all of the policies and laws that have to be met first domestically and then abroad when venturing (UNglobalcompact, 2013) .

Financial: A corrupt company will lose customer respect and trust, requiring that the company’s management spend valuable time and resources to keep their clientele loyal and demonstrate that they still operate a viable business. The public, overa...

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...ining the perception of stability and quality of an investment potential in host countries. Investors may prefer not to invest because of extra costs. Foreign investors generally avoid engaging in corruption because it is considered wrong and it can create operational inefficiencies.
One should be careful, however, about generalizing the causes and effects of corruption to all countries. Corruption can become very much a part of a country‘s life and the causes and effects can be seen in its history and society. Since there are different types of corruption, there are also different solutions. Efforts towards raising the quality of institutions (in this case, in order to diminish corruption) may help developing economies to receive more FDI, and therefore help them enjoy higher GDP per capita and a higher standard and quality of living. (talkingbusiness.net, 2014) .