Moral Evaluation of Bribery and Preventing Bribery: Asia’s Struggles

Fr. Damianus Abun, SVD, MBA, Ph.D

Introduction

Getting things done is a common objective of everyone and wanting to be millionaire is also a dream of everyone. Such objectives are so appealing to the taste of everyone up to the point that people do everything by all means to achieve. Working hard and working smart are not only the means when people run after what they want to achieve but it also includes bribery. Nowadays, people are not patient enough to wait the result and have no patience to form a queue and long process could lead people to take short cut. The end justifies the means. Result oriented management can lead employees or anyone to take short cut, as long the result is achieved. Often time the management is so happy to hear that the objectives of the organization are attained without bothering themselves to ask on how they achieved such result.

In terms of closing business transactions, usually bribery is the short cut way to accomplish the objectives. It is very common that someone who would like to get the deal sealed would often take the short cut. They offer something that is appealing to the taste of the other side, be it money or other kind that is very attractive. Because of the offer, often time, the other party does not look into the quality of the product or service sold and hastily they let the deal to be done. It is always done before the deal is sealed.

Many countries have been growingly concerned about their failure to attract important amounts of foreign and local investment due to negative perception about the country from the investors.  Corruption, bribery and the lack of transparency in business transactions have added to the multitude of risks to investment and trade in many countries. Many countries’ inability to attract and retain investment has impaired the ability to deal with mounting demographic and economic problems and hampered the fundamental socio-economic development and welfare of the populations.

 Everyone knows that bribery is not benefiting the organization but individual interest.  Therefore, it is considered unethical or immoral. Using position for individual interest and destroying the common good is not only illegal but unethical or immoral. The reason why I am writing this article is that I have been encountering such practices in my own organization. Therefore, this article will explain what bribery is and why it is immoral and how to stop bribery.  

Bribery and How It Operates

Bribery is nothing new to all of us. It has been the issue that has been hanging on our head as part of social illness that causes poverty. Bribery is part of corruption. Prijono Tjiptoherijanto (2009) defined corruption as he cited from Ofosu Ammah, Sopramanien and Uprety, 1999) as the abuse of public office for private gain. It “involves behavior on the part of officials in the public and private sectors, in which they improperly and unlawfully enrich themselves and/or those close to them, or induce others to do so, by misusing the position in which they are placed” (ADB, 2000). Therefore, a corruption is a form of seeking personal gain. Such corruption happens not only in the government but also in private sector. Seeking personal gain at the expense of others or the public is considered illegal and immoral. Therefore corruptions in all their forms are unacceptable and have to be stoped.  

Bribery is a crime of giving or taking money or some other valuable item in order to influence a public official (any governmental employee) in the performance of his/her duties. Bribery includes paying to get government contracts (cutting the roads commissioner in for a secret percentage of the profit), giving a bottle of liquor to a building inspector to ignore a violation or grant a permit, or selling stock to a Congressman at a cut-rate price (Gerald N.Hill & Kathleen T.Hill, 2005). The definition has been expanded to include bribes given to corporate officials to obtain contracts or other advantages which are against company policy. Definitely bribery is against laws and company policies and thus it is illegal. 

Noonan (1984) defined bribery as the offering, giving, receiving, or soliciting of something of value for the purpose of influencing the action of an official in the discharge of his or her public or legal duties. The expectation of a particular voluntary action in return is what makes the difference between a bribe and a private demonstration of goodwill. To offer or provide payment in order to persuade someone with a responsibility to betray that responsibility is known as seeking Undue Influence over that person's actions. When someone with power seeks payment in exchange for certain actions, that person is said to be peddling influence. Regardless of who initiates the deal, either party to an act of bribery can be found guilty of the crime independently of the other.

From both definitions bribery is considered as undue influence over the official, whether it is government or corporate officials to give certain favor to the one who offers the bribe. It is called undue influence because it affects the decision process of the officials. The decision process would be shorter and easier and would not be based on required standard of quality. Standards and procedures, policies, laws are not being followed.

  

Bribery is hard to be detected. It does not require written agreement because it is considered under the table arrangement or hidden agreement. People are aware of its negative implication and therefore it has to be done in a way that no paper /documents to be traced later on in the future if transactions are being questioned. Mostly are done verbally. In a certain culture, since it is already a common practice in business transactions, it is already known to the each party in the transaction on what should be done to accomplish the transaction. It means that bribery is considered as standard operating procedures (SOP).In some cases; there is already a certain percentage (10%) once the transaction is closed or sealed. It is not written but it is a common practice.  

Bribery can be done in many forms such as cash or even personal favor. Usually it is common to be given in cash. It can be done before or after the transaction is sealed. Sometimes the amount maybe determined or undetermined or based on the other to give, how much he/she is willing to give.  Or it can be done in the form of personal favor. People usually volunteer to offer free services to their transaction partners.

Definitely bribery is creating conflict of interest. The officials make decisions not purely for the benefits of the organization but for individual interest. In this case, it is not to the advantage of the organization but individual advantage. We have seen many cases of poor product performance. The materials or product purchased are easily damaged. Often time items purchased under bribery do not include warranty and there may be warranty period but usually it is shorter period depending on the kind of products.

Bribery is practiced not only by the government and corporations but also individual persons just like what Teresa Alho, (2012) reported in his article on “Rooting out Bribery in Business”.  He reported that even the Oscars are looming and designers and fashion houses are all vying for the attention of A-list celebrities. The amount of publicity garnered from a celebrity wearing their gown is almost priceless. The competition is so high that some designers have resorted to bribing the stars and stylists to use their dresses.

Getting the business done and the results are delivered is the purpose of bribery. On the part of the one who is bribed is pure greediness and selfish interest. He/she wants to have quick cash without going through ordinary procedures and hard work at the expense of the government or company. Poor service on the part of government is a result of bribery. Bankruptcies of Private Corporation is a result of bribery. Bribery does not benefit anyone after all.

The existence of bribery does not only include poor countries but also rich country just like Japan, Hongkong and others but the extent of corruption varies from country to country. It shows that poor countries are still dominant in the top rank of bribery rank. The richer the county is, the lesser the bribery practices. Data taken from Transparancy International Global Corruption Barometer 2007as cited by Prijono Tjiptoherijanto (2009) proves such point.

Respondent who paid a bribe to obtain services in Selected Asia Pacific Countries, 2007

Ranking Country/Territory Percentage of respondents who paid a Bribe

Ranking	Country/Territory	Percentage of respondents who paid a bribe
7 8 18 23 33 40 41 46 49 57 58	Japan Korea South Hong Kong Malaysia India Indonesia Phlippines Pakistan Cambodia Singapore Thailand	1% 1% 3% 6% 25% 31% 32% 44% 72% * *

Source : Transparancy International Global Corruption Barometer 2007, Percentage

are weighted and calculated for respondents who cants in contact with services

Moral Evaluation of Bribery

It is not difficult to judge bribery as immoral. The moral question would be: Is bribery wrong? Definitely it is wrong. Why is it wrong? Bribery is exercising undue influence over a person to act in favor of the one who is giving the bribe. The one who is receiving the bribe is acting not based on his free will but because of external force or external influence. Because of the influence, the person who is receiving the bribe acts contrary to his reason or knowledge that bribery is wrong. Despites of her knowledge, he willfully and knowingly accepts the bribe. The agent or the person ignores his knowledge or reason in his decision and allow himself/herself to be bribed. External influence cannot exempt the person from moral blame because he can still refuse.

In the theory of ethics certain act is considered moral or immoral if the act is done out free will and knowledge. Reason and free will are the basis for moral evaluation of a certain act. If those two requirements are removed, then the act cannot be judged whether it is moral or immoral. In this case, if the act is done because he wants to do it despite of the fact that he knows that bribery is wrong but he still does it, then it is immoral. Bribery is immoral.   

The next question is that who is going to be morally responsible? Moral responsibility concerns the evaluation of human acts or actions which man performs knowingly and freely. It is essentially concerned with wrongful act. It assumes that a person who performs an act knows why he acts and freely commits it; even though he knows his act is wrong.  In relation to the acts, the person deserves blame or punishment. Thus moral responsibility involves the notion of guilt or innocence. The one who is to be morally responsible and to be blamed is the person who is receiving the bribe. The person is not forced to received the bribe, it is always under the gentleman’s agreement.

Under the Kantian Ethics, moral responsibility is determined by the goodness of the agent’s motive for acting regardless of the consequence. Using this theory to evaluate the motive of bribery may be hard to determine the motive of the doer because it cannot be seen. However, though it cannot be seen, it can still determine the doer’s motive which is self-interest because it is done for personal gain. He does it wilfully for his/her own interest.  Using utilitarian ethics makes it easier to judge. Utilitarian ethics tells us that certain act has to be evaluated according to its consequence, regardless of the motives. Thus, certain act is considered to be moral if the act produces happiness of greater majority. Only the benefit of greater majority is the reason if certain act has to be pursued or not pursued. Using the argument of Utilitarian Ethics, it is very clear that bribery is only for personal interest, personal happiness. The common good is sacrificed, the welfare of other people is denied. Thus, bribery is morally wrong. Thus a person who is bribed is morally responsible and blamed.

Preventing Bribery in the Government Service: Administrative, legal, Moral and Judicial Reforms

Since bribery is not moral and is not accepted in business transaction, thus prevention measures have to be established. Preventing bribery is better than curing the bribery because if the practice has become part of the culture of the organization, it will be difficult to solve or eradicate it. Preventing bribery in my assessment is not only a matter of writing policies prohibiting bribery but most important is to inculcate moral values to all employees and management who are working in the organization or public offices. Such efforts are applied to all offices, government offices and private corporations.    

In a region where bribery in business transactions does occur, just like elsewhere in the world, preventing and curbing the occurrence of bribery in connection with the obtaining of a government procurement contract, a public decision or any other undue advantage has been widely acknowledged as an important objective for any government and private corporations. Thus any government in the world must establish policies prohibiting bribery and punishment given to those violating the policy must be heavier to discourage behavior of any person who has plan or tendency to accept bribe.

In relation to the seriousness of the government in the implementation of the policy, there must political will to run after those who accept bribes. Unless the government run after the corrupt and put them behind bars, the corruption and bribery or kickbacks will never be abolished. In some countries or corporations bribes are flourishing due to the facts that government or the management is not serious enough in curbing corruption and bribery. This may be the logical consequence of nepotism, favoritism and political connections. Rules lose their teeth when it comes to family, friends and political alliances.

Based on World Bank Survey,( Vinay Bhargava, http://unpan1.un.org/intradoc/groups/public/documents/apcity/unpan019123.pdf, retrieved March 21,2014  )  corruption is not just a public sector issue. As a frequent source of bribes for public officials, the private sector shares responsibility for corruption. For the first time, in 1999, Transparency International released a Bribe Payers Perception Index. This index ranks 19 leading exporting countries (mostly developed countries) in terms of the degree to which their corporations are perceived to be paying bribes abroad. On a scale of 1 (high) to 10 (negligible), more than half the countries scored below 7 and about one third scored below 5, indicating perceptions of widespread bribery by leading exporting countries. The Philippines was not a part of this survey. This is just an indication that bribery is a common problem everywhere, not only in the developing countries but also developed countries but at each different extent. 

The same survey indicated that in the Philippines, several instances of corrupt practices on the part of private corporations and individuals have been reported in the media. In a September 1998 SWS survey, asked whether corruption happens in the private sector as well, 52 percent of the respondents said it did, even without the involvement of government personnel. Similarly, 66 percent of the respondents said that when corruption involves a businessperson and a government official, both parties are guilty. These findings show that, as a major source of the funds used for corrupt purposes, the private sector has to be mobilized to combat corruption.

Such survey indicates an alarming situation that corruption is becoming a culture of the business transaction whether private or public sector. The challenge here is how to eradicate cultural practices if it has become mental mind set in the business transaction. Removing mental mind set is not an easy job. It is easy to call for total transformation from the pulpit but how it is to be implemented and to live it is a difficult task. However, it is not impossible, as long as the government has the political will to pursue cases related to corruption and the same as private sector, society may become clean.

Though the Philippines has not established an agency specifically for eradicating corruption, however its effort in combating corruption reveals that progress has been made in the last decade largely by reducing opportunities for corruption through policy and regulatory reforms. This is shown in the improvement of its CPI. Its progress can be judged from historical scores over a long period of time based on World Bank Survey report. For the Philippines, Transparency International’s estimates of CPI have steadily improved from a low of 1.04 in 1980–85, to 1.96 in 1988–92, 2.77 in 1995, and 3.6 in 1999 (a higher CPI on a scale of 1 to 10 means a lower perception of corruption). Though encouraging in the sense that progress has been made, the low score also says there is a long way to go (Vinay Bhargaya, http://unpan1.un.org/intradoc/groups/public/documents/apcity/unpan019123.pdf, retrieved March 21,2014.).

Recent development indicates that Philippines are moving forward toward eradicating corruption. Though no specific agency is assigned to do such job, however, civil society and media has been so brave in revealing corruption in the government. The issue of pork barrel of several senators and congressmen has been brought to open by the media and individuals who are determined to eradicate corruption in government. However, it remains to be seen on the part of the government if they have the political will to investigate until its final judgment. Cases related to corruption have been filed but the verdict of those cases is remained to be seen. In this case commitment by the political leadership is crucial. Besides, it is time for the Philippines to introduce reforms in combating corruption such as a comprehensive strategy to combat corruption, and independent anti corruption agency. Singapore. Malaysia, Indonesia and also Thailand have independent agency handling corruption.  Other reforms in combating corruption may include efforts in improving corporate governance and public sector reforms. In terms of good governance, it may include as transparency, accountability, participation in decision making and in relation to public sector reforms may include administrative reforms, decentralization and civil society participation in decision making.

Indonesia’s effort in combating corruption has been a long history since 1957 when it was called Order to fight corruption (Military Commander). Such effort did not produce much result, then in 1967 Presidential Decree to fight corruption through prevention and repression (Corruption Eradication Team) was declared. However, despite of the new measures, the result did not show any improvement. Corruption continued to grow and led the government to issue Presidential decree in 1970 to access corruption and its solution (Commission of Four). Since those efforts did not discourage people from doing corruption, then in 1977 President formed a team called Disciplinary Team to take disciplinary action in operations & administration. After long years, it seemed efforts did not reduce corruption level. Desperate of the situation, in 1987 Ministry of Finance order for a special operation on corruption in taxation (Special Re-Audit on Tax Return). Then later in 1999, the government implemented Asset examination and disclosure law for public officials (Public Official Wealth Examiner). The corruption had rooted deep and it seemed to be hard to eradicate, thus in 1999 Government ordered to investigate complex corruption (Corruption Eradication Joint Team). Despite of many efforts, corruption still existed which the government needed to establish KPK (2003). It is a special commission on anti corruption. It is an independent body from legislative and judicial branches of government. Since then Indonesia has implemented a series of measures designed to combat corruption. The corruption Eradication Commission (KPK) was formed in 2003 to coordinate and supervise anti-corruption efforts, while focusing on eliminating and preventing corruption and conducting a system review. It undertakes this mission on the assumption that a comprehensive, systematic and long term approach is needed to achieve a corruption-free Indonesia, which must by definition include the holistic participation of all stakeholders. As such, its aim is to become a driver of change in cultivating a culture of anti-corruption in Indonesian society, government, and the business world. Its activities include coordination, supervision, investigation, prosecution, prevention, and system review (Prijono Tjiptoherijanto, 2009).

Despite a lot of efforts have been done, Indonesia has not shown much improvement in eradicating corruption as pointed out by the recent findings of Transparency International’s annual Corruption Perceptions Index . CPI ranks 174 countries and territories according to their level of corruption as perceived by surveys of both domestic and foreign observers. The 2012 index found that Indonesia was perceived as more corrupt than a year earlier, dropping from 100th to 118th place (a lower ranking indicates greater corruption), despite high-profile efforts to address the problem. In its interview, last 2013 with the Indonesians and it was reported in Global Corruption Barometer, majority of Indonesians reported that corruption had “increased a lot” in the last year, with vast majorities describing the police (91 percent), legislature (89 percent), judiciary (86 percent), political parties (86 percent), and public officials and civil servants (79 percent) as corrupt. More than a third of Indonesians reported that they or someone in their household had paid a bribe in the last 12 months, including two thirds of those who had contact with the judiciary and three quarters of those who had contact with the police. On the latter metric, Indonesia is on par with the likes of the Democratic Republic of the Congo, Liberia, and Sierra Leone (Gregory B. Poling, Blake Day, 2013).  Where have they gone wrong? Despite the reforms that were introduced, however corruption is still on the rise. Corruption has gone to different sectors of government. Indonesia need stronger measures and practices to be enforced and must be taken to eliminate entrenched interests and processes that support abuses. Strong political will is needed which lies on the hand of the President. Is it possible to learn from Malaysia and Singapore?

 Malaysia also acknowledges that corruption is on the rise. However, Malaysia government has introduced reform including the establishment of MACC or Malaysia Anti Corruption Council. The ruling government under the Barisan Nasional coalition has promised to fight corruption and Prime Minister Najib has made it a cornerstone policy. At least on paper, the government has taken several important steps towards increasing transparency and oversight. One of the first major moves made Prime Minister Najib when he was first elected was to establish the Malaysian Anti-Corruption Council (MACC) to combat corruption and increase transparency. The MACC was seen as an improvement over its predecessors, but critics charge that it is still failing to do its job (Brian, 2014). Government’s effort in curbing corruption seems lacking of political will in persecuting former prime minister and other officials.  Many charges against well-connected officials have been dropped. Such situation indicates the weakness of political will of the government to run after the corrupt officials.

Even though Malaysia has not gone far yet, however its effort in curbing corruption has brought output. Its corruption perception index has improved as indicated in the report that Malaysia has improved its standing in the 2013 Corruption Perception Index, from country ranking of 54th position in 2012 to 53 out of 177 countries. Malaysia’s CPI score is 50/100 compared to 2012 of 49/100. Malaysia’s position continues to be in the mid-range average, indicating that while many steps have been implemented under the GTP/NKRA initiatives, the level of corruption experienced in Malaysia has not significantly decreased (http://www.malaysiascorruptionperceptionindex.com) .

Singapore has started cleaning their country from corruption since 1952 when the CIPB was established. However the fight against corruption was not easy then. There were a lot of challenges and problems in carrying out its mission to eradicate corruption due to some reasons. Corruption was more or less a way of life in the 1940s and early 1950s. Prior to 1952, all corruption cases were investigated by a small unit in the Singapore Police Force known as the Anti-Corruption Branch. Another problem was the lack of public support. Members of the public did not co-operate with the CPIB as they were skeptical of its effectiveness and were fearful of reprisals. Then later in 1960 the Prevention of Corruption Act was enacted and through this law the Singapore Corrupt Practices Investigation Bureau (CPIB) was empowered. The CPIB officers were given more investigative powers to make the fight against corruption easier. The purpose was to provide more effectual prevention of corruption. It is an independent body and it is directly under directly under the Prime Minister’s Office so as to block any undue interference from any quarters and to ensure that CPIB does not favour any particular department or agency. The CIPB is solely responsible for the investigation of corruption-related offences involving bribery in Singapore. Under the wings of the Prime Minister’s Office, CPIB is truly able to operate without fear or favour and regardless of colour, creed or station in life. By 1992, CPIB’s independence of action was guaranteed by the constitution. It was this independence that enabled CPIB to take action against ministers and high-ranking civil servants all this while. Administrative reforms were undertaken within CPIB in three broad areas to bring about organizational excellence as part of the on-going civil service-wide reforms initiated in May 1995 under the broad umbrella of “Public Service in the 21st Century” (PS 21).   As a result of the work of CIPB, Singapore become less corrupt country as it shown its consistent ranking in the Corruption Perception Index (CPI)

CPI Ranking For Singapore

Year	Ranking	No of Countries
2013	5th	177
2012	5th	176
2011	5th	183
2010	5th	178
2009	5th	180
2008	5th	180
2007	5th	180
2006	5th	163
2005	5th	159
2004	5th	146
2003	5th	133
2002	5th	102

Taken from Corrupt Practices Investigation Bureau, available at http://app.cpib.gov.sg/cpib_new/user/default.aspx?pgID=21&action=clear

Lesson from Singapore is clear that no room for corruption and it is done through administrative, legal, and judicial reforms. On the top that is the political will of the Prime Minister to execute the law without preferences.   

Thailand has its own history in running after corruption. Prior to 1975, Thailand’s bribery and corruption-related offences were set forth in the Criminal Code.  In 1975, the Counter Corruption Act was introduced and the Office of the National Anti-Corruption Commission (“ONAC”) established.  Given ONAC’s limited jurisdictional reach, however, it was largely ineffectual in combating corruption. Because of its ineffectiveness, Thailand tried to improve and revised some parts of their constitution. Some changes were made. Thailand included in its constitution the check and balance to address corruption issues, by improving transparency and holding civil servants accountable for misconduct. The new Constitution also established a foundation for the enactment of significant new legislation, including the Organic Act on Counter Corruption, and the creation of an independent counter-corruption agency, the National Counter Corruption Commission (“NCCC”), the predecessor to today’s primary counter-corruption agency, the National Anti-Corruption Commission (“NACC”) (Kyle Wombolt / Herbert Smith Freehills LLP, 2013)

Just like many other Asian countries, Thailand has not brought much improvement along its effort in eradicating corruption as reported by certain survey. The survey was conducted among leading private companies by the Thai Institute of Directors during March-April 2013. The survey indicated that 93 per cent of 1,066 respondents viewed that the corruption level in Thailand is seriously high, while three-fourths or 75 per cent viewed that corruption continues to be practiced in the country. It is reported that corruption was mostly conducted in three forms -- exploiting political positions to benefit one's own group of people, bribing with gifts or money, and corruption at policy level. Since its efforts in eradicating corruption has not brought much improvement, it follows that their rank in International Corruption Perception Index dropped as indicated by the report of Transparency International that Thailand ranked 88 in 2012 out of 176 countries as compared to 80 out 0f 182 in 2011( Bangkok Pundit,2012).    

Based on the report of International Corruption Perception Index last 2013, the only Asian countries that are belonged to top 20 are Singapore (5^th), Hon Kong (15^th) and Japan (18^th) while other Asian countries, those mentioned in this paper are still struggling to improve its perception index and it may take another decades to be included in the top 20 countries like the three Asian countries. Such ranking concludes that the richer the country is, the better it is in terms of its ranking perception index and the poorer the country is the lower it is in terms of perception index, and thus it further concludes that poverty is caused by corruption.

Lesson that we learn from Singapore is that they have a policy of “zero tolerance” on bribery and government commitment to run after the corrupt politicians and public officials who are corrupt. Unless other Asian countries follow the example of Singapore, then they will be always at the bottom of corruption perception index and the economy will never get any better.

Political will on the part of the government is a prerequisite to clean the government from any corrupt practices. Criminalization on corruption is also suggested. Laws on corrupt practices should be criminalized to discourage public officials to accept bribe or kickbacks.

Countries that I have mentioned above have implemented administrative, legal and judicial reforms. However, moral reforms have not been part of their agenda. Political will in running after the corrupt officials is a must to prevent corruption. However efforts must go beyond political will and that is moral reforms. Part of the moral reforms is that the government should have ethical code of conduct in running the office in which bribery should be considered serious misconduct and it should be punished with greater punishment. Those ethical codes must be explained or disseminated to employees for them to be guided.

Preventing Bribery in the Private Organization: Administrative Reforms and Leading by Example

Bribery is not only happening in the government office but also in the private corporations. Just like in the government, administrative, judicial and legal aspects have to be reformed and enforced, the same rules applied to the private corporation. Private corporations should have strong policies against bribery and any kind of corruption. Beyond that the commitment of management to implement policies without discrimination is a requirement. Often time employees are not afraid to accept bribe because they see that management is weak in implementing rules and policies. Even though there are already existing policies prohibiting bribery but employees or management keep on doing it because they know that no one has been punished for violating the policies. 

Leading by example is much more important than writing many policies on prohibiting bribery. After 18 years working in the educational institutions and handling finances, I have made my policy, not written policy but the policy on integrity. Unless the employees see that the management accept bribe, they will follow the policy on “no bribe”.  When the employees see that you do not mess around with policies and finances, they will follow the policy. Walk the talk management and leadership is more effective than making many policies.

Beyond writing ethical code is ethical leadership. Leadership is playing critical role in eradicating corruption. Their roles are not just their power to persecute those who violate the law but their power to influence which can be done only through examples. Leading by example is more powerful than words. If the employees are not seeing their boss accept bribes, then they will never do it. If the employees see that their boss has never been squandering the assets of the organization, then they will never squander it too. If they see the chief executive is doing it, then it will encourage down the line. Thus curbing corruption is calling individual transformation.

Besides, related to ethical issues, there must be no compromise in punishing employees who are violating ethical code of the organization. Punishment must be applied to all equally without discrimination, employees and management. Determination in pursuing clean organization is a must. Zero tolerance on moral issues give a strong signal to employees that the management mean business. This is to discourage employees and management who have plans or tendency to accept bribes.

Conclusion

Corruption has become a culture and it has entered in private and public organization. Corruption has caused poverty and poor services in private and public organization. The effects of such practices are devastating. Thus it is not only an economic issue but it is a moral issue. The solution to such problem is not only administrative, legal and judicial reforms but moral reforms. The fact is that administrative, judicial and legal reforms have been made but the corruption still exists, thus it means that political will must be accompanied by moral reforms. It needs moral reforms which are an individual call for everyone who is working in private and public organization. Individual reputation and company/government reputation or good name has to become values of everyone working in government or in any organization. People should have sense of honor to themselves, to the company in which they are working and to the government where they do business as pointed out by Matt Ellis as cited by Thomas R. Fox (2012) in his article, “Ethics Matters” He argued that reputation matters. Ellis based his statement based on the survey conducted by Germany’s Humboldt-Viadrina School of Governance, which sought to assess how incentives and sanctions affect a company’s willingness to take seriously ethical behavior. Ellis reported that the survey found that in Latin America, more people than in any other region rated reputational considerations as the most important factor to motivate businesses to counter corruption, which was a higher percentage than any other geographic region reviewed.

Asia is political will and ethical problem. The policy of Singapore of “zero tolerance of corruption” is not only a sign of political will but it is also a moral will to eradicate corruption. Thus, unless other Asian countries follow the lead of Singapore, then Asia will be still behind even up to several decades ahead. The challenge is on the leadership. Unless the leader is clean then down the line is not clean too.   

References:

Bangkok, Pundit. 2012. Transparency International: Thailand ranked 88th out of 176 in corruption index. http://asiancorrespondent.com/93078/transparency-international-thailand-placed-88th-out-of-176-countries-in-corruption-index/ Retrieved, March, 26, 2014

Vinay Bhargava, Country Director, Philippines, The World Ban. Combating Corruption in the Philippine http://unpan1.un.org/intradoc/groups/public/documents/apcity/unpan019123.pdf, retrieved, March 21, 2014.

Brian. 2014. Malaysia In Focus: Bribery And Corruption On The Rise? http://www.valuewalk.com/2014/01/malaysia-bribery-corruption/. Retrieved, March 20, 2014.

George, B. Poling & Blake, Day. 2013. Corruption in Indonesia and the 2014 Elections. http://csis.org/publication/corruption-indonesia-and-2014-elections. Retrieved, March, 24, 2014. 

Kyle Wombolt & Herbert Smith Freehills LLP. 2013. Thailand Chapter - Bribery & Corruption. http://www.globallegalinsights.com/practice-areas/Business%20Crime/global-legal-insights---bribery-and-corruption-1st-ed/thailand. Retrieved, March 26, 2014.

Prijono Tjiptoherijanto, Professor of Economics, University of Indonesia. 2009. Corruption Prevention In Indonesia. http://unpan1.un.org/intradoc/groups/public/documents/UNPAN/UNPAN037358.pdf. Retrieved, March 21, 2014.

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Gerald N. Hill and Kathleen T. Hill. 2005. Bribery. http://legal dictionary.thefreedictionary.com/Bribery. Accessed March, 17, 2014.

Noonan, John Thomas. 1984. Bribes. New York: Macmillan.

Ofusu-Amaah; R. Soopramanien; and K. Uprety; 1999; Combating Corruption : A Comparative Review of Selected Legal Aspects of State Practice and Major International Initiatives. International Bank for Reconstruction and Development; World bank, Washington, D.C, U.S.A.

Thomas R. Fox, 2012. Ethics Matters. http://corruptionbribery.com/2012/03/15/ethics-matters/. Retrieved March 12, 2014.

Teresa Alho, 2012. Rooting out bribery in business, http://corruptionbribery.com/2012/02/29/rooting-out-bribery-in-business/. Retrieved, March 9, 2014.

Thomas, R. Fox. 2012. Ethics Matter. http://corruptionbribery.com/2012/02/29/rooting-out-bribery-in-business/. Retrived, March 15, 2014.

Chua Cher Yak, Director, Singapore Corrupt Practices Investigation Bureau (CPIB). Singapore’s three-pronged program to combat corruption: enforcement, legislation and adjudication. http://unpan1.un.org/intradoc/groups/public/documents/apcity/unpan047818.pdf. Retrieved, March 23, 2014.

Transparecy International Malaysia. http://transparency.org.my/what-we-do/indexes/corruption-perceptions-index/tis-2013-corruption-perceptions-index-cpi-results/ Retrieved, March 25, 2014.

                 

Favoritism in the workplace and its Effect On the Organization

March 2014

Introduction

Often time management falls into the trap of doing favors to a certain person or certain group and ignoring other group without necessarily being aware of its consequences. Such management behaviour is common everywhere in any organization. Everywhere favoritism and nepotism can be found and in an organization, such a preferential group does exist. Often time they call it the “circle of influence”. They are called the circle of influence because those persons who are treated special and considered close to the top management can also influence the management's decisions and other people's behavior. Because of their closeness to the top and their influence on the management,  other people call this group “the untouchable". They are called untouchable because of their closeness and influence on the top management. Another group has to be careful dealing with such groups because it can cause their employment. Unfortunately, oftentimes, the management is undermining its consequences to the other employees and the organization. Undeniably such preference creates jealousy and may lead to conflict. Not only does it cause conflict, it may affect the performance of other employees and the performance of the organization. In this simple article, we will explain different kinds of favoritism, the effects of favoritism, and how to handle favoritism.

Favoritism in the workplace

Favoritism in the workplace refers to a practice in which a person is treated differently better than others, not necessarily because the person has the qualification in terms of skill requirements but sometimes other aspects that are not related to job performance. The management is giving preferential treatment to one or more employees. Sometimes such preferential treatment can be intentional; for example, an employer could assign the choicest responsibilities to the most veteran worker or hotshot upstart by explaining that his abilities justify the extra attention and tasks. Preferential treatment can also be subconscious; for example, employees might notice that an older male supervisor seems to treat young female workers with friendly smiles and encouragement while benignly ignoring male workers in the hallways even though they are performing a good job. Problems happen when attention and appreciation or recognition are not given equally to all employees. It is worse when recognition is given to those who do not deserve it.

Definitely, favoritism in the workplace is counter-productive and, in some cases, unethical and illegal. When management assigns responsibility or gives promotions based on favoritism, not based on performance, the company will not be able to attract the most qualified person for a job. It discourages excellent performance and encourages mediocrity. Hard work is not recognized but laziness. Promotion is not based on merit but based on certain favours. Such practices, sooner or later, can damage the company. Favoritism compromises performance and quality. Promotion is given to the one who has offered sexual services to the boss, while those who deserve are ignored. Soliciting sexual favors for job advancement, is clearly immoral, not only illegal. Soliciting gifts from certain groups or individuals in return for promotion is immoral. Giving promotion to the whites but not to the blacks is clearly discrimination. Many kinds of practices indicate the existence of favouritism in the workplace. Thus, employees should be vigilant to those practices and prevent it from getting rooted in the organization. Those who are responsible for the top management should be familiar with the types of favoritism that are being practiced so that the company can develop effective policies to combat them. Eradicating favoritism is not difficult if the management has the determination to clean the organization from immoral activities and has a political will to exempt no one whether it is a family or friend.  

Favouritism is considered discrimination and discrimination is illegal and immoral. Discrimination happens when employers make job decisions based on employees' protected characteristics -- traits that state, governments have decided should not be the basis of employment actions. Under employment laws or labour laws, for example, it's illegal for employers not to hire someone because of his race, to refuse to promote women, to relegate employees with disabilities to low-paying positions, or to lay off employees based on age. If workplace favoritism is based on protected characteristics, then it is illegal discrimination. For example, if a manager promotes only men or gives the best assignments and shifts to employees who share his religious beliefs, that would be discrimination. 

Favouritism is poison to employee morale. It creates terrible feelings toward the management and towards the employees who are treated special. Hatred can cause not only sickness but also the mood of employees in carrying out their duties and responsibilities every day. Certainly, such emotional condition affects the performance of their duties. Thus favoritism does not benefit anyone in the organization but it destroys everything. Employees might be professional, qualified, and experienced, but they’re still human and still susceptible to emotions better left outside the workplace. Jealousy, anger, fear, sullenness, and worry can occur in business environments at any time, but these negative emotions are exacerbated when favoritism takes place. Therefore management should be careful in playing favoritism.  Before indulging in workplace favouritism, consider how your actions might affect other workers. 

Employee Favoritism and Nepotism are considered employee morale Cancer (Chris Young, 2008). It is considered cancer because it causes the sickness of the workplace environment and finally seriously erodes the competitive position of a company or at worst - literally destroys the potential of companies. The cure for cancer can only happen if the root of the cancer is removed totally.  

Different Kinds of Favoritism in the Workplace

George N. Root (2014) identified several kinds of favoritism in the workplace and these are nepotism, cronyism, sexual favors, and patronage. He explained that nepotism is the practice of hiring family members regardless of their qualifications. In some cases, a relative of a company executive may be qualified to perform the job for which she is hired. The fact that she is an executive's relative gives her an advantage over the other applicants. According to him, hiring should always be based on the qualifications and the needs of the particular job. In this case, even though the person or the newly hired employee is related to the executive if her/his qualification is very much needed, then nepotism can enhance the company’s performance. However, if the hiring is just because of family relationships and ignoring the qualifications, then nepotism can cause the decline of the company.     

Cronyism is the other side of nepotism. It is the act of hiring friends regardless of qualifications. One of the main problems with cronyism is the feeling of entitlement that employees hired under these circumstances feel. Because of their close relationship with the top executive, they feel they deserve raises and promotions that should be reserved for more qualified staff members. Besides the feeling of entitlement, these groups feel powerful and can influence other people in the organization and top executives. These groups are feared by other groups and may create conflict in the workplace and can result in losing qualified personnel.

Favoritism may be caused by sexual favor. Sexual favour forces the executive to prioritize the person for career advancement even though the person is not qualified for the promotion. The person who is favoured may claim anything she wants and the executive has no choice but to grant her request. Such treatment can cause discrimination against other employees. The employees who are denied promotions and raises instead of sexual favours being exchanged between a manager and employee can claim that they were discriminated against. Companies should discourage inter-office relationships and should consider a policy that makes relationships between managers and subordinates grounds for termination.

Another form of favouritism is patronage. Patronage becomes a practice in which an executive or manager engages in nepotism or cronyism. An executive promotes employees he trusts into positions of management and then asks those managers to hire their friends and family members. This kind of favoritism has the potential to spread throughout the company as the executive brings more of her favorite employees into positions of authority.

To add to the list offered by George N. Root, Christ Young (2008) based on his experience working with certain companies offers several forms of favoritism and nepotism: relative nepotism, friend nepotism, connection nepotism, contribution nepotism, referral nepotism, they were with us through thick and thin" nepotism, "credential nepotism.

Relative nepotism is a common practice everywhere to hire, save, prioritize, and promote the relative first before anyone else. While friend nepotism is a management behaviour that gives special attention to friends. They are considered the “inner circle of influence” to the management and they are the priority of the management. Connection nepotism is the practice of giving special treatment to persons who have a connection with the management, be it political connection, sports activity/hobby connection, and many others. It may seem to be unimportant but often time such connection influences management for special treatment. Contribution nepotism refers to the practice in which management gives special treatment to persons who have contributed something to the achievement of the management. While this practice may not be totally bad it should always consider the total whole. The performance of the management is a contribution of all people working for the organization because all works are interrelated. Thus evaluation of the level of contribution must be done to determine how much each one has contributed to the organization. Referral nepotism is a practice in which management asks asking top performer if he/she knows someone to fill up the position. This may be considered an ordinary recruitment strategy but there is a tendency of management to prioritize more on these persons over others. “They were with us through thick and thin" nepotism” This form of nepotism is particularly perverse.  A team member who has been with the company since it started 15 years ago can wreak a lot of havoc if they are poor performers.  The havoc comes from new performers who realize the "lifer" is "special" and is not being held to the same employee accountability standard that they are.  The next question new hires have is, "Why am I not special."  The downward spiral begins - employee morale goes into the tank. Lastly, credential nepotism is This form of nepotism is often hidden but dangerous.  Ever seen someone get more credit than they deserve because they have a certification?  I have.  When people are given more credit because they attended a class and passed it but cannot apply what they learned - we call that "Credential Nepotism.

All of the above forms of nepotism result in a hideous employee morale killer called "favoritism. This form of favouritism cause the life of the organization in danger. Therefore, such favouritism must be avoided at all costs.    

The Effect of Favoritism

Favoritism is considered negative because of its effect not only on the organization but also on the other employees. The following are considered to be the effects of favouritism in the workplace. 

1.      Decline company performance

When the employees are hired because of family relationships, or friendship and not because of certain skill qualifications and then not being able to perform the job, then nepotism becomes counter-productive. If the executive staff begins hiring family members because they need jobs, not because of their qualifications and ability, then such practices can affect the company's profitability or performance. Therefore, the top management should consider skill qualifications in hiring and not favoritism.    

2.      Resentment and demoralization.

Favouritism is not going to rest well with other employees. One of the primary effects of workplace favouritism on employees is resentment. Workers feel that, no matter how hard they work, it won’t matter because preferred employees will always get better benefits, more attention and greater opportunities. Such a situation can demotivate other employees to do their jobs to the best they can. They feel not recognized and appreciated. They feel bad and discouraged. Not only that, employees often resent the special worker, treating her with unkindness and gossiping about reasons for preferential treatment. Workers also resent their employers, becoming less willing to participate actively in the company mission. If employees feel that they’re being passed over for new responsibilities or promotions because all goodies are funneled toward their favorite workers, lower motivation results. Employees slack off, taking less care with assigned duties and being more reluctant to volunteer for additional tasks. This results in lower productivity missed deadlines and lower overall morale.

3.      Organizational Conflict

When employees perceive favoritism to be widespread, such a situation may lead to organizational conflict. It would not only be a conflict between other employees and favored employees but also between the executive or management and employees. If such a situation happens, then the working environment becomes not conducive for other people to work.    The situation may lead to some employees taking legal action against employers who engage in egregious favouritism, citing preferential treatment based on gender or ethnicity. If workplace favoritism is widespread, for example, an employer offers preferential treatment to workers based on sexual favors, employees could cite a hostile work environment. This can lead to serious repercussions, including court fees, restitution awards, and loss of professional reputation.

Avoiding favoritism

As we see the effect of favouritism, it is obvious that favouritism does not bring any good to the organization. Therefore, there is no way of perpetuating it but it should be stopped by all means. Displays of favouritism, or even its perception, can destroy relationships, initiative and trust. We must always be alert to its presence and suppress it. Therefore we should always avoid promoting favouritism by all means such as  spending extra time with preferred workers, overlooking mistakes made by favorite employees, and assigning perks to employees because you like them. If you’re an employee working in an environment where a boss is practising favouritism, double-check your impressions by looking for specific examples of preferred treatment. Once you’ve confirmed that this is a problem in your workplace, visit the personnel department with your examples. Explaining the situation in a concise, professional way gives you more credibility; be careful not to make rash accusations.

It is recommended that the organization should introduce or establish a policy prohibiting favouritism in the workplace. The organization should specify practices that are considered favoritism and indicate punishment related to favoritism practices. 

Handling Favoritism at Work

The question here is how we react to favoritism in the workplace. Since favoritism is committed by the executive, this question is addressed to the employees. How do co-employees handle favouritism? How do you keep your career humming along while you're stuck in the shadow of the boss's pet?  Eileen P. Gunn (2008) gives some tips on how to handle favoritism as he cited from Birkel (2008). It would be nice to follow those advice.

1. Don't try to shoot down the favorite, no matter how tempting it might be to correct him in meetings or point out to the boss when he's way underqualified for that project you wanted, Birkel advises. At best, you're picking on the boss's buddy; at worst, you're questioning the boss's judgment about people. Neither one is going to gain you any ground.

2. Sit down with that boss as soon as possible and agree to a clear job description for you, Birkel says. To make the boss's job easier, have one ready for him or her to give feedback on.

3. Agree on some goals for you to accomplish over the next quarter or six months or year (or a combination of time frames). Make sure at least a few of them can be measured objectively—hitting sales or profit or cost-cutting targets, landing certain clients, or getting trained in particular new skills.

Hitting these goals gives you material you can use should you need to campaign for a promotion, project, or raise you want that you believe the boss is inclined to hand to one of the in-crowd.  It also gives you the means with which to defend yourself should one of the inner circles try to undermine you someday (if, say, he really wants that same promotion, project, or raise).

4. Find a champion who's at the same or higher level than your fickle manager and who can talk you up and suggest you for that plum assignment or title you want. If other people in the organization think highly of you, then it makes your boss look good to put you to good use in a visible way.

5. Get involved in the company beyond your immediate group by joining corporate committees or employee groups or lending your experience to colleagues in other departments when they ask for it. This will help you find that champion you need, boost your credibility beyond your boss's purview, and maybe lead to new opportunities with a better boss.

6. Buddy up to the boss where you can (taking care to keep your self-respect in the process). If you're at all interested in his or her favorite sport or hobby, give it a try so that you have something other than work to talk about when you find yourself sharing an elevator with the boss.

And when that boss does occasionally extend an invitation to lunch or drinks or Saturday golf to colleagues beyond a little clique, by all means, go! It's an opportunity to help the boss get to know you and see possibilities beyond the usual safe fallback people

Of course, despite your best efforts, your career progress could slow down or flat-out stall during this manager's tenure. If you can't live with that, even for a short spell, then polish up your résumé and start looking for a new job, inside your company or elsewhere.

But if you do decide to sit tight and bide your time, take it to heart. "It's not a question of if but when that manager will be moved along or pushed out in the next reshuffling," Birkel says. "Then those favorites are back on equal footing with everyone else." If they can't settle in and thrive on their merits, they'll either follow their benefactor yet again or move on in some other way.

Favoritism is an Ethical Issue/Moral Issue.

Favouritism is a moral issue. It is a moral issue because it violates basic moral standards which are justice and fairness. Moral standards dictate to do justice and to be fair to all. Definitely, favouritism violates such principles. Aristotle argued that “equals should be treated equally and unequals unequally. About employment practices, it tells us that employees who possess the same qualifications and perform the same or similar responsibilities should be treated the same. Favouritism, cronyism, and nepotism all interfere with fairness because they give undue advantage to someone who does not necessarily merit this treatment (Judy Nadler and Miriam Schulman, 2006).

Favouritism, cronyism, and nepotism also undermine the common good. Under utilitarian ethics, the rule is that you can act only on the act that promotes the happiness of the greater majority or the common good. The message of individual sacrifice is emphasized. Each person should promote only those acts that will contribute to the common good but not to individual interests. The practice of favoritism is against such a principle. When someone is granted a position because of connections rather than because he or she has the best credentials and experience, it is considered individual preferential treatment which will lead to the disadvantage of the organization or common good.  

 Conclusion

Favouritism is the preferential treatment of certain employees or groups of employees. Such a definition is a clear indication of discrimination. It destroys the morale and motivation of employees to work. Definitely, favoritism is bad and immoral. The effect of favoritism is devastating, not only to the life of individual employees but to the life of the organization. It loses its competitive power against other competitors and it will lead to its bankruptcy. Thus it must be avoided at all costs.    

References

George N. Root III. 2014. Demand Media.  (http://smallbusiness.chron.com/types-favoritism-workplace-11537.html), date retrieved, Feb 21, 2014

 Eileen P. Gunn  2008. Handling Favoritism http://money.usnews.com/money/careers/articles/2008/04/17/handling-favoritism-at-work

Chris Young. 2008. Employee Favoritism and Nepotism. http://www.therainmakergroupinc.com/human-capital-strategy-blog/bid/91330/Employee-Favoritism-and-Nepotism-Employee-Morale-Cancer

Judy Nadler and Miriam Schulman.  2006. Favouritism, Cronyism, and Nepotism. Santa Clara University. http://www.scu.edu/ethics/practicing/focusareas/government_ethics/introduction/cronyism.html