Wednesday, December 18, 2013

Reflective Leadership vs. Endemic Corruption in Emerging Markets

SHEKSHNIA Stanislav, LEDENEVA Alena,
DENISOVA-SCHMIDT Elena
Read the working paper
INSEAD Working Paper 2013/121/EFE

Despite decades-long efforts to eradicate it, corruption remains a major risk for doing business in emerging markets. Our study of 111 CEOs and owners of companies operating in Russia showed the ineffectiveness of universalistic top-down anti-corruption strategies at the firm level and tested a practical, bottom-up approach. We argue that strategies targeting specific business practices can mitigate corruption even in endemically corrupt environments such as Russia. The critical factor for the effectiveness of corporate anti-corruption policies is reflective leadership. We propose and describe an instrument for such leadership. We slice firm corruption into recognizable and manageable practices and offer an inventory of methods that reach out through hierarchical and network channels.