Lessons in Managing Effectively

Bribery, nepotism, cronyism, side-payments, gifts, kickbacks, lawsuits — all bad things, yes? Not necessarily, says Carnegie Mellon's John Hooker, the T. Jerome Holleran Professor of Business Ethics and Social Responsibility and professor of operations research.

"Some of these practices are very effective within their own cultural context," said Hooker. "The key to avoiding corruption is to understand what makes a business culture work, and to stick to practices that reinforce the system rather than tear it apart."

Hooker says corruption is a force that undermines the cultural system in which it occurs, but because cultures can operate in different ways, very different kinds of behavior can corrupt.

"Practices that Westerners consider questionable, such as cronyism and nepotism, may be very functional in other cultures," he said. "Practices that are routine and acceptable in the West, such as bringing a lawsuit for breach of contract or even the process of negotiation, may be corrupting and dysfunctional elsewhere."

He adds that still other practices, such as bribery, may be corrupting in a wide range of cultures, Western and non-Western, but for very different reasons.

"Different cultures use radically different systems to get things done. Whereas Western cultures are primarily rule-based, most of the world's cultures are relationship-based. It is not that some cultures are 'less ethical' than others, but that every culture has its own characteristic way of breaking down."

In his paper, "Corruption from a Cross-Cultural Perspective," recently published in Cross-Cultural Management; An International Journal, Hooker uses a variety of cross-cultural cases to illustrate his points.

Hooker says each cultural world view brings a deep reservoir of ideas and resources for dealing with a rapidly changing world — whether it be the technology and efficient organization of the West, the theological and ethical perspective of the Middle East, the stability of Confucian relationships, the communal values of traditional African cultures, or the connectedness of all living things in Indian pantheism.

"Rather than fight corruption by trying to standardize behavior worldwide, it seems best to allow each cultural system to evolve organically in its own direction and work out its own problems," he said.

"Cultural diversity, no less than ecological diversity, is good for the planet."

Related Links: Read the Paper  |  Tepper School of Business

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