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Economics
Corporate corruption

   

The findings of a recent study conducted by Asian Institute of Management professor Eduardo L. Roberto in tandem with the Social Weather Station on corporate misconduct or corruption are quite revealing.

Among others, the study prognosticates that corporate shenanigans or corruption could remain as a major problem in many companies considering that many senior executives (the subject of the study) lack standards or norms to measure or evaluate the misconduct of workers and managers. Consequently, some executives tend to already look at behavior commonly perceived as wrong as "wrong only sometimes." Furthermore, some executives are of the belief that it is not always wrong to do something that is inherently wrong for as long as it is premised on friendship, position or seniority. Manipulating company records is not also seen to be always wrong. Relatedly, overestimating the value of a company’s assets to get a better or more favorable loan approval is thought of as not always wrong. To be sure, there are still other salient findings of the study on corporate corruption and which should be areas of further consideration and reform if corruption were to altogether eliminated or minimized in the corporate world, given the repercussions of corporate corruption on the public sector and on the latter’s own problem regarding corruption, as well.

It is indeed disturbing to note how corporate executives regard misconduct in their own backyards. Imagine not being bothered at all by the idea of overestimating the value of a company’s assets just to get a loan approval. It is this kind of mindset that has generated a number of problems not just for the misguided corporation but also for other sectors of the economy. As an example, the phenomenon of substantial non-performing assets or non-performing loans in the hands of many financial institutions is due partly to this corporate manipulation. Overstating the value of a company’s assets can also result in erroneous determination of a company’s real worth of value and potentials to generate revenues and risky investment decisions.

Even more disturbing, however, is the observation that corporate misconduct or corruption takes place because there are no sufficient standards or norms with which to measure it. One would have imagined that given the available resources and flexibilities (which unfortunately are not so in the government sector) of the corporate sector, it would have invested a part of these resources and exploited its flexibilities to formulate the corresponding standards or norms to measure or evaluate corporate misconduct or corruption. After all, it is still to the corporate sector’s advantage that such misconduct or corruption be measured, tracked down and minimized and eventually eliminated.

Note that if corporations are able to make so much turnovers and profits despite the prevalence of corporate misconduct or corruption, then how much more would be added to their turnovers and profits if there were no such misconduct or corruption.





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