According to a new report from Harvard Business School on firm competitiveness and the detection of bribery, the impact of bribery can be felt far down the corporate chain. The report highlights several key insights:
- Impacts on Competitiveness: Bribery’s most significant negative impact is on employee morale, but it also unfavorably impacts the business environment.
- Executive Involvement: Cases in which a senior executive extended the bribe had a significantly greater impact on employee morale than when a lower level company representative was involved.
- Importance of an effective anti-corruption compliance program: Bribery cases detected by a firm’s internal control systems had a far less negative impact than those detected by external means.
- Bribe Size: Bribes of less than $100,000 impacted competitiveness factors just as strongly as bribes over $500,000. Size clearly does not matter when it comes to the impact of bribery on competition.
The study sends a strong message that firms must invest in management and control systems that will prevent bribery.