Advertisement

Springer Nature is making Coronavirus research free. View research | View latest news | Sign up for updates

Industry structure and organizational deviance: Multinational corporations and questionable foreign payments

  • 31 Accesses

  • 1 Citations

Abstract

Questionable foreign payments (QFPs) by multinational corporations (MNCs) are examined in the context of world industry structures. Corporate claims and existing theory view QFPs as a function of extortive corporate-governmental relations. There are three industry conditions cited which make extortion possible: competitive pressure, foreign dependence and governmental leverage. Top U.S.-based MNCs (N=197) which have and have not made QFPs are compared on indicators of world industry structure to test for these conditions. Findings show that corporations making QFPs are more heavily involved in foreign economies, but are less susceptible to competitive pressure and no more subject to governmental leverage than nonpaying corporations. Specifically, paying corporations are likely to be leading corporations in fairly concentrated, U.S. dominated, and high-technology markets. Paying corporations, then, are in better positions to control their environments than nonpaying corporations. We conclude that changes in world industry structures beginning in the 1960s have increased the likelihood of QFPs, especially for U.S. MNCs in high-tech industries.

This is a preview of subscription content, log in to check access.

References

  1. Adams, Gordon (1981).The Iron Triangle: The Politics of Defense Contracting. New York: Council on Economic Priorities.

  2. Adams, Gordon and Sherri Zann Rosenthal (1976).The Invisible Hand: Questionable Corporate Payments Overseas. New York: Council on Economic Priorities.

  3. Bolton, David (1978).The Grease Machine: The Inside Story on Lockheed's Dollar Diplomacy. New York: Harper and Row.

  4. “Bribery ...” (1982). “Bribery: U.S. companies outbribe each other overseas.”Multinational Monitor 3 (1) (January): 4.

  5. Brown, Lester R. (1972).World Without Borders. New York: Random House.

  6. Calleo, David P. (1982).The Imperious Economy. Cambridge, MA: Harvard University Press.

  7. Clinard, Marshall B. and Daniel Abbott (1973).Crime in Developing Countries. Toronto: John Wiley and Sons.

  8. Clinard, Marshall B. and Peter C. Yeager (1980).Corporate Crime. New York: The Free Press.

  9. Cloward, Richard A. and Lloyd E. Ohlin (1960).Delinquency and Opportunity: A Theory of Delinquent Gangs. New York: Free Press.

  10. Commission on Transnational Corporations (1978).Transnational Corporations in World Development: A Reexamination. New York: U.N. Economic and Social Council.

  11. “Corrupt Practices Act ...” (1982). “Corrupt Practices Act: Bribery by an other name is no longer bribery.”Multinational Monitor 3 (1) (January): 4.

  12. Cyert, Richard M. and James G. March (1963).A Behavioral Theory of the Firm. Englewood Cliffs, NJ: Prentice-Hall.

  13. Dunning, J.H. and R.B. Pearce (1975).Profitability and Performance of the World's Largest Industrial Corporations. London: Financial Times, Economists Advisory Group.

  14. Ermann, M. David and Richard J. Lundman (1982).Corporate Deviance. Toronto: Holt, Rinehart and Winston.

  15. “Fortune's directory of the 500 largest ...” (1977). “Fortune's directory of the 500 largest U.S. industrial corporations.”Fortune 95 (5) (May): 364–87.

  16. “Fortune's directory of the second 500 largest ...” (1977). “Fortune's directory of the second 500 largest U.S. industrial corporations.”Fortune 95 (6) (June): 204–25.

  17. Goodsell, Charles (1974). American Corporations and Peruvian Politics. Cambridge, MA: Harvard University Press.

  18. Green, Mark (1980). “Road to monopoly,” in Mark Green and Robert Maine (eds.),Big Business Reader: Essays on Corporate America. New York: Pilgrim, pp. 498–510.

  19. Heine, A.N. (1979). “Curbs on bribes are hurting U.S. business,”Duns Review of Modern Industry 114 (September): 123–124.

  20. Hinds, Michael de Courcy (1982). “Products unsafe at home are still unloaded abroad,”New York Times (August, 22): E9.

  21. “ITT ...,” (1982). “ITT questionable payments top $19 billion in ‘70’s.”Multinational Monitor 3 (6) (June): 6.

  22. Jacoby, Niel, Peter Nehemkis and Richard Ellis (1977).Bribery and Extortion in World Business. New York: McMillan.

  23. Jodice, David (1980). “Sources of change in third world regimes for foreign direct investment.”International Organization 34 (2) (Spring): 177–206.

  24. Kaikati, J. and W.A. Label (1980a). “Foreign antibribery law: friend or foe?”Columbia Journal of World Business 15 (Spring): 46–51.

  25. Kaikaiti, J. and W.A. Label (1980b). “American bribery legislation: an obstacle to international marketing.”Journal of Marketing 44 (Fall): 38–43.

  26. Kennedy, Tom and Charles E. Simon (1978).An Examination of Questionable Payments and Practices. Toronto: Praeger.

  27. Kugel, Yerachmiel and Gladys W. Greunberg (1977).International Payoffs: Dilemma for Business. Lexington, MA: Lexington Books.

  28. Lurie, W.L. (1980). “How justice loads the scales against big corporations,”Fortune 102 (December): 86–87.

  29. Madden, Carl (1977).The case for the Multinational Corporation. NY: Praeger.

  30. “McDonnell Douglas ...,” (1981). “McDonnell Douglas: Bribery plot thickens in Pakistan,”Multinational Monitor 3 (4) (April): 3.

  31. Mintz, M. and Cohen, J. (1976).Power, Inc. New York: Viking Press.

  32. Palmutter, Howard V. (1969). “The tortuous evolution of the multinational corporation,”Columbia Journal of World Business 3 (January–February): 9–18.

  33. Perrow, Charles (1979).Complex Organizations. Glenview, IL: Scott, Foresman and Company.

  34. Pfeffer, Jeffrey and Gerald R. Salanick (1978).The External Control of Organizations: A Resource Dependence Perspective. New York: Harper and Row.

  35. Pollack, Andrew (1982a). “Japan's big lead in memory chips,”New York Times (February 28): 3–1.

  36. Pollack, Andrew (1982b). “The far-flung wars of mighty IBM,”New York Times (September 19): 3–1.

  37. Robinson, H. (1979). “Commercial bribery — corporation as victim,”Financial Management 47 (April): 16–19.

  38. Robinson, R. (1973). “Beyond the multinational corporation,” in John Fayerweather (ed.)International Business—Government Affairs. Cambridge, MA: Ballinger, pp. 17–26.

  39. Scheibla, S.H. (1980). “Accountable for what? Executives push changes in Foreign Corrupt Practices Act,”Barron's Weekly 60 (December): 9–10.

  40. Shover, Neal, John Lynxwiler, Donald Clellend and Stephen Froce (1982). “The nature and consequences of regulatory enforcement: Responses to corporate deviance.” Paper presented at the annual meeting of the Southern Sociological Society in Memphis, TN.

  41. Simon, David R. and D. Stanley Eitzen (1982).Elite Deviance. Toronto: Allyn and Bacon.

  42. Skolnick, Jerome (1966).Justice Without Trial. New York: John Wiley and Sons.

  43. Spero, Joan Edelman (1981).The Politics of International Economic Relations. New York: St. Martin's Press.

  44. Starbuck, Jerome (1965). “Organizational growth and development,” in James G. March (ed.),Handbook of Organizations. Chicago: Rand McNally, pp. 457–533.

  45. Staw, Barry M. and Eugene Szwajkowski (1975). “The scarcity-munificence component of organizational environments and the commission of illegal acts,”Administrative Science Quarterly 20 (September): 345–354.

  46. Subcommitte on Crime (1980).Corporate Crime. Washington: U.S. Government Printing Office.

  47. Sumutka, Alan R. (1980). “Questionable payments and practices: Why? How? Direction? Prevention?”The Journal of Accountancy 149 (March): 50–63.

  48. “The 500 largest ...,” (1977). “The 500 largest industrial corporations outside the U.S.,”Fortune 96 (August): 225–237.

  49. Thompson, James D. (1967).Organizations in Action. New York: McGraw-Hill.

  50. Tukey, John (1977).Exploratory Data Analysis. Don Mills, Ontario: Addison-Wesley.

  51. U.N. Centre on TNCs (1977).Survey of Research on Transnational Corporations. New York: United Nations.

  52. U.C. Centre on TNCs (1979).Transnational Corporations and the Pharmaceutical Industry. New York: United Nations.

  53. Vaughan, Diane (1982). “Transaction systems and unlawful organizational behavior,”Social Problems 29 (April): 373–380.

  54. Wionczek, Miguel (1976). “Notes on technological transfer through multinational enterprises in Latin America,”Development and Change 7 (April): 135–156.

Download references

Author information

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Leitko, T.A., Kowalewski, D. Industry structure and organizational deviance: Multinational corporations and questionable foreign payments. Contemporary Crises 9, 127–147 (1985). https://doi.org/10.1007/BF00728519

Download citation

Keywords

  • Good Position
  • International Relation
  • Multinational Corporation
  • Competitive Pressure
  • Industry Structure