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  • January–February 2013
  • Article
  • Harvard Business Review

When the Crowd Fights Corruption

By: Paul M. Healy and Karthik Ramanna
  • Format:Print
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Abstract

Corruption is the greatest impediment to conducting business in Russia, according to leaders recently surveyed by the World Economic Forum. Indeed, it's a problem in many emerging markets, and businesses have a role to play in combating it, according to Healy and Ramanna. The authors focus on RosPil—an anticorruption entity in Russia set up by Alexey Navalny, a crusader against public and private malfeasance in that country. As of December 2011, RosPil claimed to have prevented the granting of dubious contracts worth US$1.3 billion. The organization holds corrupt politicians' and bureaucrats' feet to the fire largely through internet-based crowdsourcing, whereby often-anonymous people identify requests for government-issued tenders that are designed to generate kickbacks. Should entities like RosPil be supported, and should companies fashion their own responses to corruption? On the one hand, there are obvious public-relations and political risks; on the other hand, corruption can erode a firm's competitiveness, the trust of customers and employees, and even the very legitimacy of capitalism. The authors argue that heads of many multinational companies are well positioned to combat corruption in emerging markets. Those leaders have the power to enforce policies in their organizations and networks, and they enjoy the ability to organize others in the industry against this pernicious threat.

Keywords

Corruption; Emerging Economies; Crime and Corruption; Entrepreneurship; Ethics; Globalization; Russia; Georgia (nation, Asia); India

Citation

Healy, Paul M., and Karthik Ramanna. "When the Crowd Fights Corruption." Harvard Business Review 91, nos. 1/2 (January–February 2013).
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About The Author

Paul M. Healy

Accounting and Management
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  • The Dutch East India Company (VOC) By: Sophus A. Reinert, Paul M. Healy and Robert Fredona
  • Determinants of Gender Differences in Change in Pay among Job-Switching Executives By: Boris Groysberg, Paul M. Healy and Eric Lin
  • Hitting Home: Amazon and Mary's Place By: Paul M. Healy, Debora L. Spar and Amy Klopfenstein
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