Fraud and bribery costing billions of pounds is affecting up to four out of five business deals outside Europe and the US, according to Andrew Kakabadse, a professor of international management and corporate adviser on leadership and ethical business.
Professor Kakabadse says five years of studying client experiences have prompted the conclusion that: “Corruption is rife and getting worse in high-growth export markets promoted by both the Foreign Office and Downing Street.
“In two-thirds of the world, business can’t be done unless a bribe is handed over,” the Professor claims. “Brazil, Russia, India, China, Mexico, South ica and Indonesia are all hotspots for financial ‘incentives.’ In Turkey, Greece, most of South America and across many Asian countries, some sort of ‘transactional cost’ is likely to be incurred.”
Professor Kakabadse says his research shows a steady increase of routine demands for cash and favours, before contracts are agreed by politicians, civil servants, business leaders and other middlemen.
“A sharp rise in international corruption and bribery is damaging business the world over,” he adds. “Not only are companies and economies suffering as a result, but the UK Government is encouraging investment in high-export markets where demand for back-handers has become commonplace.
“Companies need to train, review and isolate senior managers who hold front line positions negotiating with government officials, politicians and middlemen. Ambitious sales targets combined with a lack of risk analysis leaves corporations open to charges of unacceptable and corrupt practice.”
Many of the protocols brought in by corporates in policy documents are just “box ticking”, according to Professor Kakabadse, who predicts “a collapse of the whole edifice” and rebellion from front line managers if the disconnect between legislation and corporate governance, on the one hand, and the realities of doing business to win revenues, on the other, persist.
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