Manufacturing Savvy
Can Companies Grow Their Way Out of Corruption

Can Companies Grow Their Way Out of Corruption?

In an interesting twist on how to deal with countries that have corrupt business practices, a study done by the National Bureau of Economic Research, "Does Economic Growth Reduce Corruption? Theory and Evidence from Vietnam," suggests that a successful company has more options. 

In an article from the Joan Shorenstein Center on Press, Politics and Public Policy at the Harvard Kennedy School, one conclusion is that as companies become more productive and successful the potential cost of relocating is smaller. 

While conventional thinking would suggest that once a plant is established in a location the company is unlikely to move, in this case the success allows a  company which finds itself in an envirnment strife with bribery the option to simply move. And corruption in the form of bribery is no small matter as GSK, Eli Lily and Sanofi have learned with regard to their operations in China. 

Dealing with bribery is quite complicated. Recently I interviewed Ravi Venkatesan, author of Conquering the Chaos: Win in India, Win Everywhere to address the issue of bribery in emerging markets. 

One tool a company can use to understand the level of bribery in a country it is looking to locate is the Corruption Perceptions Index for 2013.  Just released  this week by Transparency International it ranks countries based on their ethical ( or lack thereof) standards. 

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