Leading Sustainable Organizations
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“Rampant, systemic and deep-rooted.”
That’s how the U.S. Department of Justice described last month’s revelations of corruption at FIFA, soccer’s international governing body. The Zurich-based association organizes The World Cup, which is the world’s most-watched sporting event, generating billions in sponsorship and merchandizing revenues.
Coverage of the revelations has focused mostly on the personalities and “perp-walks” of the implicated individuals. I’ve found, however, that a focus on personal morality muddles executives’ understanding of what corruption is and how it can be managed.
Defining Corruption: A Systems Approach
When I run executive education programs on corruption, I find that many managers can’t clearly define what corruption is. And if you can’t define something, you certainly can’t manage it when you encounter it in your business engagements with suppliers, customers or regulators.
While many corruption definitions focus on dishonest abuse of power or moral depravity, I prefer the precision of the engineer’s definition:
Any organized, interdependent system in which part of the system is not performing duties as originally intended to, or performing them in an improper way, to the detriment of the system’s original purpose.
That’s a mouthful, so I’ll break it down. The focus here is on a “system” in which there is a component that is failing. So a bridge, for example, is an interdependent system of engineered beams and trusses that, when whole and complete, will sustain your car as you drive across the river. But if part of the bridge is corrupt — say, one of the beams has rusted through — then part of the system can’t work as designed, and the bridge might collapse.
This “positivist” definition of corruption is quite precise, as opposed to muddled “normative” definitions that are morality or situation-based.
A business, agency or even national economy can be seen as organized, interdependent systems. Identifying corruption in such social systems is straightforward if you use a positivist definition: When the parts of social systems work as designed, all stakeholders can get the maximum performance — and thus maximum social benefit — from them.
The “parts” in social systems, however, are not mechanical; they are human decision makers that have certain decision-making rights and duties. When the decision makers exercise their duties responsibly, the system works as designed and society benefits.