This study researches how the arbitrariness and pervasiveness of corruption affect the decision-making process and subsequent operations of firms investing in highly corrupt host locations. The results of the analysis demonstrate that firms headquartered in countries where corruption is high have an advantage when operating in a foreign country with a similar institutional environment. The reason for this advantage is that these firms possess knowledge of how to cope with the arbitrary and pervasive dimensions of corruption. Firms from countries with lower corruption levels than the host country, however, are more affected by corruption in a highly corrupt host country. Finally, though this study finds evidence that all firms operating in a highly corrupt country might participate in corrupt deals, those headquartered in highly corrupt countries are more likely to be willing to do so. This claim is based on 12 in-depth interviews with managers with FDI allocation responsibilities of firms operating in a highly corrupt host country. The results show that firms from less corrupt countries face stronger pressures from their headquarters to not engage in corrupt deals, whereas firms from more corrupt countries do not encounter such pressures.
<p>The article focuses on the importance of analyzing leadership as part of a sociological issue rather than a management issue. This approach reflects that the leadership in multinationals is a social leadership, that has its effects in the different aspects of society. The article also states that the mass movement in societies is key since globalization and that handling it as an important issue in the management aspects of business will impact the development of the companies.</p><p> </p>
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