To Bribe or Not to Bribe? Determinants in the Indian Context

• Author: Subodh P. Kulkarni,Amit Gupta,Nagarajan Ramamoorthy
• DOI: http://doi.org/10.1111/emre.12053
• Published date: 01 December 2015
• Date: 01 December 2015

To Bribe or Not to Bribe? Determinants in

the Indian Context

Nagarajan Ramamoorthy1,Subodh P. Kulkarni2, and Amit Gupta3

1School of Business Administration, University of Houston-Victoria, Sugar Land, TX, USA

2School of Business, Howard University, Washington, DC, USA

3Management Consultant, New Delhi, India

In the present study, using a sample of 113 MBA students from a premier management institute in India, we

examined the influences on the propensity to bribe. As hypothesized, the results of the logistic regression model

indicated that individuals’ perception of distributive injustice in their organization resulted in an increased

propensity to bribe. Contrary to our hypothesis, individuals’ perception of procedural fairness increased the

probability of propensity to bribe.Additionally, the hypothesis that the propensity to bribe would increase when the

financial benefits accrue to the individual rather than the organization and its members received marginalsupport.

The results also showed that the propensity to bribe increased when the bribe-giver had greater concern for the

employees of the organization; and the propensity to bribe decreased when the bribe-giver exhibited greater

concern for customers. Finally, we discuss the implications of our study for research and practice.

Keywords: bribe; organizational justice; distributive justice; procedural justice; equity theory; stakeholders;

bribery

Introduction

Bribery is a significant economic and ethical concern

almost all over the world. Bribery has been defined as ‘a

payment or other favors to induce others to act in favor

of the bribe givers’ (Shahabuddin, 2002, p. 366). Smith

(2010, p. 441) defines bribery as ‘to privilege decisions

in favor of one actor, or to evade the principle that

procedures be neutral between competing firms, appli-

cants, and others.’Although bribery and corruption have

been used interchangeably in the literature, the former

refers to actions or behaviors from the perspective of the

individual giving a bribe, while the latter refers to

actions or behaviors from the perspective of the individ-

ual receiving the bribe (Moore, 2008). In this paper, we

use the term bribery as the propensity of an individual to

engage in an act of giving a bribe to another individual or

organization in order for the receiver of the bribe to act

in a manner that benefits the individual or the indivi-

dual’s (bribe giver’s) organization.

Regardless of the distinction, bribery and corruption

have economic consequences not just for nations but

also for firms and the ultimately consumers. Bribery and

corruption increase the cost of doing business by

increasing the costs of goods and services that ultimately

get passed on to consumers (Wu, 2009). Studies show

that it adds about 5% to the costs of doing business in

Asian countries including an increase in the risk

premium (Kraar, 1995). Bribery is of great economic

significance, especially in developing countries such as

India. According to Transparency International’s Cor-

ruption Perception Index, India is ranked 85th out of 175

countries in 2014 with at least 55% of Indians having

experienced bribery in some form.

Furthermore, bribery also involves significant ethical

decision making (Ferrell and Gresham, 1985; Trevino

and Youngblood, 1990). Consistent with the views of

Trevino (1986), we argue that the decision to bribe poses

an ethical dilemma for individuals where various value

systems are at conflict. In particular, we argue that indi-

viduals may confront three types of value conflicts while

engaging in bribery: (1) the conflict between self-

interest seeking and the maximization of owners’ inter-

ests (Jensen and Meckling, 1976; Eisenhardt, 1989);

(2) the conflict between the pursuit of economic perfor-

mance and well-being of the organization and its

Correspondence: Nagarajan Ramamoorthy, School of Business Admin-

istration, University of Houston-Victoria,14000 University Blvd., Sugar

Land, TX 77479, USA. Tel: +1-281-275-8857. E-mail: drnags@yahoo

.com

European Management Review, Vol. 12, 247–259 (2015)

DOI: 10.1111/emre.12053

© 2015 European Academy of Management