THE COMPANY THAT BRIBED THE WORLD: A CASE STUDY OF THE INSTITUTIONALIZATION OF CORRUPTION IN A MULTINATIONAL ORGANIZATION Armando Castro University College London 1-19 Torrington Place, London, UK Tel: +44 (0)20 3108 9197 E-mail:
[email protected] Suzana B. Rodrigues Universidade FUMEC, Brazil & RSM, Erasmus University
[email protected] Nelson Phillips Imperial College London South Kensington Campus London, UK T: +44 (0)20 7594 1699 E-mail:
[email protected] 1 ABSTRACT Although research on Multinational Enterprises (MNE) has added several interesting findings to the discussion of misconduct by complex organizations, these have largely focused on external sources of corruption, leaving behind the role of multinationals as central actors. Our paper addresses these voids by drawing upon a case study of corruption by one of the largest Latin American construction companies, Odebrecht. We try to understand the complex phenomenon of the institutionalization of corruption, chiefly how corruption occurs and persists within a multinational organization and via its subsidiaries. To do so, we explore why and how this emerging MNC created a unique model of corruption, by decoupling and internationalizing corrupt activities in a foreign subsidiary in a tax haven. 2 THE COMPANY THAT BRIBED THE WORLD: A CASE STUDY OF THE INSTITUTIONALIZATION OF CORRUPTION IN A MULTINATIONAL ORGANIZATION INTRODUCTION How and why multinationals enter different national contexts and thrive internationally are central questions in International Business (IB) research. Answers to these questions centre around two broad arguments: first defends the idea that multinationals from developed countries expand to foreign markets using their unique resources and capabilities (Peng, 2001).