Corruption in India and its effects on Tata Group

Referring to Transparency International, in India 55% of the population has first-hand experiences with paying bribes to get several actions done.

It does not matter if one wants to buy a bottle of gas, official governmental bidding or transportation of goods within the country. All of those activities usually are getting done by paying bribes.
By doing this, the poor man is getting poorer and the rich ones are getting richer.

In accordance with an article by rediff (http://business.rediff.com/column/2010/oct/04/guest-india-billionaires-among-a-sea-of-poor-people.htm), India holds several Billionaires in the midst of a sea of poor people.

Referred to World Bank more than 80% if Indian polulation earn less than US$2 a day, although almost a 7% (rediff.com) share of the worlds billionairs are living in this country.

This fact obviosly is caused by inequality. Bribes are regulating official biddings and daily trade instead of laws which would carry out equal chances for everybody. Because of that, wealthy people can afford a normal and good life in India, meanwhile the poor population is not able to face equal chances in society.

Tata Group
Even though corruption is a daily life and often practiced business in India, Tata stricly follows its filanthrophic principles and there was not a single case of corruption uncovered in combination with Tata.

The Author Michael C. Knapp explains in his book Contemporary Auditing,  that According to Newsweek, Tata‘s rigid ethical standards are so well known, that corrupt [government] officials
typically don‘t even bother asking Tata for bribes.

Beginning at governmental regulations, the entire sytstem has to be restructured and corruption needs to be eliminated from the heads of indian population.
If more companies and public officials would follow those principles in future there could be the chance of reaching more equal rights for everyone and thus improving the economical and social situation in entire India.

Corruption in media

Rupert Murdoch, one of the most influencial persons in media business all around the globe, CEO of the by him founded News Corporation faced in July 2011 an intense scandal concerning his company.

Beginning in England, a far-reaching phone-hacking scandal was uncovered.
Later also the United States started investigation regarding this topic.


See this article by New York Times, to get further information about the incidence.

Corruption in German family businesses

According to the study Public perception of family businesses and anonym public owned firms (Studie zur öffentlichen Wahrnehmung von Familienunternehmen und anonymen Publikumsgesellschaften) by Zeppelin University 2009, family businesses in Germany savor a high reputation expressed by the phrase Made in Germany. 

In recent years, official corruption incidents in Germany were invariably done by non-family businesses. It is weird to read this because family businesses usually do have less transparency than public owned companies and thus it is more likely to find corruption incidents in those businesses. 

A study by KPMG from the year 2010 proofs, that corruption in this field of businesses occurs, but the dimension and the kind of incidents is a lot smaller than the corruption going on in the other types of firms. That means in particular, many occurring incidents in family firms are about data theft.

In accordance with Prof. Dr. Birger P. Priddat from University Witten/Herdecke (Germany), corruption in German family businesses is not a serious topic. The mentioned reason therefore is, that leaders in FamBus tend to not be seduced as easy as leaders from public owned businesses. Since family members have to think in long-term success of the enterprise, they more likely try to avoid bribe in order to reach the best value for the company on long-term view. According to the professor in this field of business still the axiom of integrity applies.


Source: http://neuvians.de/?p=1566

Fraud in Family Businesses

This article is investigating fraud in Family Businesses in comparison to general businesses.
Fraud is an often occuring problem regarding internal corruption. It carries many risks for companies, especially family businesses.

Following an excerpt from the article:

...Family businesses often pose a greater risk of fraud because their controls over assets and data are inadequate. The family atmosphere often leads to more trust, which leads to less control over processes. Inadvertently, non-family members may be afforded the same level of trust given to family members.

About this blog

Corruption in Family Businesses

Family Businesses:     Less corruption based on exceeding trust and an intense sense of responsibility?

This blog is dedicated to the complex impact of corruption and moreover to the correlation between corruption and family businesses.

The idea is to investigate corruption in family businesses regarding internal and external spheres of activity. Generally this denomination is used for police corruption. In this case it seems adequate to use the terms for economical corruption in the same sense.

Mentioning internal corruption we are talking about fraud and abuse of position and power inside the enterprise with no direct effects to the environment.

External corruption in contrast means the relation based on corruption between the company and the environment. In the majority of the cases this topic will probably lead to political corruption.

An interesting issue will be the inspection of the differences between corruption in developed and emerging countries. Especially Asian markets seem to have a huge potential for corruptive behavior, mainly including governments, thus external corruption.