The Architecture of Fraud and Corruption

Addressing the fraud and corruption phenomenon needs more than just reactive acts. It needs a comprehensive, thoughtful, and thorough study and analysis of the entity's or country's socioeconomic circumstances. However, there must be a real and sincere political will to fight fraud and corruption.

This is what is called the "Architecture of Fraud and Corruption". One needs to start from these basic understanding.

. Corruption of principles. According to Zekos (2004, p. 644), only the harmonization of ethical principles in business could contribute to stop the use of corruption methods. In other words, the corruption of principles could only be annihilated through the introduction of universal ethical principles.
. Corruption of moral behavior. Zekos (2004, p. 641) mentioned the ethical dilemma business corporations have to deal with: either, business leaders as well as their employees are choosing the most profitable course of action, although it implies unethical behavior, or they conform themselves to their personal and organizational ethical norms. In both cases, there is a high risk that their choice could “drive their company out of business”. In the first case, because of the legal pursuits against the company; in the second case, because of the loss of its competitiveness on the globalized markets.
. Corruption of people. Zekos (2004, p. 644) said that small-scale corruption will be very difficult to stop.
. Corruption of organizations. Zekos (2004, p. 639) said that in business corporations, corruption creates more uncertainties about the expected level of profits, so that business leaders tend to undertake “loss-avoiding behaviours” which are either expensive, or inefficient, or both. Indeed, as rightly said Zekos (2004), corruption reduces competitiveness. Only those competitors who can pay large bribes can actually compete. The other potential competitors are automatically excluded from the market. Corruption is an anti-trust behaviour. Zekos (2004, p. 641) added that corruption erodes public confidence in the market. The final effect is that people no longer trust business leaders and,progressively, any other representative of social authority.
. Corruption of states. According to Z ekos (2004, pp. 639-41), in corrupt societies, government bureaucrats are only focusing on their growing economic power, so that their competence is no longer developed as it should be. He defined “transnational corruption” as the bribery of government officials by foreign businesses. He said that such corruption makes national economies less efficient. People are thus no longer trusting their political leaders and public servants.

Zekos, G.I. (2004), “Ethics versus corruption in globalization”, Journal of Management Development, Vol. 23 No. 7, pp. 631-47.
Dion, M. 2010, "What is corruption corrupting? A philosophical viewpoint", Journal of Money Laundering Control, vol. 13, no. 1, pp. 45-54.