A Weberian Perspective on Organizational Corruption

Abstract

Corruption poisons corporations in America and around the world, and has devastating consequences for the entire social fabric. In this paper, we review the main studies on corruption in different 'societies of organizations', and suggest that further research needs to be done on the genesis of corruption at the organizational level. Corruption refers to the abuse of authority for personal benefit and therefore we draw on Weber's three ideal types of legitimate authority to build a theoretical model of organizational corruption. Specifically, we examine how leaders are likely to engage in corrupt behavior contingent on their legitimate authority, and specify what types of business misconducts they are likely to undertake. In addition, we discuss the self-selection of different legal and economic national systems into the three types of legitimate authority. Finally, we suggest managerial implications of our theoretical model and propose directions for future research.

Keywords: Corruption, Weber, authority, corporate governance

JEL Classification: L2, M1, M14, N40, N2