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Strategies for German Investors to Reduce Corruption and Occupational Fraud in El Salvadorian FDIs.

Sommer, Gregor B. (2014) Strategies for German Investors to Reduce Corruption and Occupational Fraud in El Salvadorian FDIs. Doctoral thesis, University of Surrey (United Kingdom)..

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Abstract

Nearly every organization, regardless of size, type, or industry faces threats associated with corruption, abuse and occupational fraud (Hodge, 2012). Recently, also small and medium sized companies (SMEs) are becoming aware of these threats but many of them still lack a proper risk management to cope with such increasing threats (Funk RMCE et al., 2011). The exposure to these risks increases tremendously when companies establish Foreign Direct Investments (FDIs) and the strategies to reduce a company’s exposure to them become more complex, because investors have to operate in a cultural environment, which is different from their home country. The aim of this case study is to develop appropriate, practically oriented strategies for investors to avoid or at least to reduce threats of corruption and occupational fraud when they undertake an FDI into El Salvador. A qualitative research methodology is the favourable approach to solve this problem in the real business world, because this research question deals with corruption and occupational fraud, which are very complex research problems with high levels of uncertainty and a need to act flexible (Corbin and Strauss, 2008). The data collection in El Salvador has been undertaken in the form of semi-structured interviews with managers and owners of companies, as well as individuals, people working for NGOs (Non Governmental Organizations) and business consultants. The empirical data have been analyzed by grounded theory to develop practically oriented strategies for investors. The research suggests managing corruption by (1) implementing strict rules and procedures, (2) strictly saying no to corruption, (3) avoiding governmental contracting, (4) being in a favourable position by offering competitive products, (5) providing enough funds to support the implementation of the FDI, (6) maintaining a certain tolerance towards an “acceptable” level of corruption and finally (7) working together with lobbyists and intermediaries, so that one does not get involved directly into corruption. Occupational fraud within the FDI can be reduced by (1) profound knowledge of one’s business, (2) advanced HR recruitment and well designed management processes, (3) a good working climate, (4) a variety of controls including latest technology, (5) organizational and managerial strategies, which must fit to the cultural environment of El Salvador, (6) a cooperation with third parties and finally (7) the support of external consultants. Investors have to select the location of their business carefully, should not show any wealth, have to invest into security and are advised not responding to extortions to face the threat of El Salvadorian youth gangs (maras).

Item Type: Thesis (Doctoral)
Divisions : Theses
Authors : Sommer, Gregor B.
Date : 2014
Additional Information : Thesis (D.B.A.)--University of Surrey (United Kingdom), 2014.
Depositing User : EPrints Services
Date Deposited : 14 May 2020 14:17
Last Modified : 14 May 2020 14:23
URI: http://epubs.surrey.ac.uk/id/eprint/856564

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