With strict laws and regulations, it is unfortunate to see corruption and bribery in the corporate sector of the UAE. It is badly affecting the business economy and corporate arena. Besides bribery, corruption in the UAE is done in many ways such as extortion, graft, embezzlement etc. Regardless of the type chosen and the way it is done, corruption does exist in the corporate world reducing profits for the businesses and credibility too.
Unfortunately, professionals are not getting enough money out of their business which is why they misuse their positions for personal gains. With their personal gains in pockets, let’s explore how they are affecting the corporate world.
Corruption can have a number of economic impacts on the business, of which lost resources is one of the most important elements. When the corrupt people try to cover their illegal activities, unintentionally consumers pay the costs of vendor corruption when they skim off profits to raise prices. Additionally, prices are likely raised when corruption takes place within or outside the company. Fraudsters try to cover their illegal acts and hence put the consumers and economy in losses.
Inefficiency in Business
When corrupt employees are getting money from illegal activities, they are likely to use the resources improperly, hence the efficiency of the business suffers badly. Additionally, there are no proper resources available to effectively run the business and uphold its business operations. Moreover, when the true identity of these employees is exposed and brought in front of the public through media, customers lose trust and respect for the company. This also costs the organization a lot of money in order to compensate for the legal fees, public relations, and penalties.
Crime Rate Increases
When the corrupt employees are exposed through the media, they have to fight for against police departments, government agencies and internal investigators, which can take the matter to an entire next level. Additionally, fraudsters will eventually have to feed the black market interest. On the contrary, if the fraudsters are not caught, then the corrupt person and the corruption steps into the world of other criminal activities.
Corruption is widespread in the UAE, destroying the good of the society. Greed and competition for more money can give birth to other criminal companies and enterprises affecting the corporate society negatively.
Development at Risk
When businesses want to bring in clients, they look for investors. But investors in the UAE have also become skeptical and mistrustful with time due to extreme corruption in the corporate world. With all these corruption related issues, you will surely have a tough time finding investors. This is putting business development and new business opportunities at risk in the UAE as it is now hard to convince investors about your credibility.
In wake of these negative impacts corruption has on the businesses in particular and the economy of the state in general, the UAE government has taken strong and strict actions to control corruption in the corporate world.