Organizational Corruption

Mulyati, Nani (2015) Organizational Corruption. In: Eradicating Corruption: An Inter-Diciplinary Perspective. Andalas University Press, Padang, Indonesia, pp. 251-262. ISBN 9786028821902

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Abstract

In organizational sphere, we can name two kind of corruptions, first an organization of corrupt individuals, which essentially is a form of personally beneficial corrupt behaviors inside the organization; and secondly is organization-level corruption, typically labeled as corrupt organization, in which a group of employees carries out corrupt behaviors on behalf of the organization. The effort to combat corruption in these two contexts will be different; however, how to handle corrupt organization can be applicable for organization of corrupt individuals as well. There are many devices offered to reduce the corruption in organization. The most obvious mechanism is by consistently enforcing the existing criminal laws. In term of substantive law, there should be clearer definition of what is meant as corporation in Indonesian legal system and set a better mechanism on what condition a corporation or the directors can be criminally liable for harming states’ financial. Further, it is also necessary to encourage the organization to design an effective self-regulation, voluntary organization principles not to pay bribes. There must be an understanding of each person within the organization to combat corruption in any form. Usually organization treats bribery as solely economic issue, not as legal and ethical issues. In order to ensure organizational reform, it is also significant to review penalties given to corrupt organization. Imposing monetary fine and put the executive in incapacitation is primarily retributive punishment, it has no rehabilitation purpose; legal mechanism to ensure organizational reform should be set up formally.

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