The challenge of commercial bribery for multinational healthcare corporations in China : a neo-institutional analysis

Abstract

This research seeks to explain the process for multinational healthcare companies to engage in commercial bribery practices in China. This dissertation tries to connect individual and institutional factors by adopting the neo-institutional approach and presenting evidences at marco, meso, and micro levels, to review the issues faced by multinational healthcare companies operating in China and their responses to these issues. The article argues that the macro conditions in China created some unique pressures for the Chinese operation of multinational healthcare corporations. Even if these companies try to maintain a compliant operation in their formal procedure, the pressures from the macro level induce them to decouple their actual practice from formal procedure to achieve organization survival. The individual employees driven by company bonuses are committed to both making things work through incompliant or deviant measures and concealing the misconduct with the acquiescence of senior management. Commercial bribery cannot be eradicated in China’s healthcare industry because it is a result of interactions among conditions existing at macro, meso, and micro levels, and these conditions cannot be easily changed. The practice of commercial bribery presents both regulatory risk and business risk to multinational healthcare companies in China, and will remain a great challenge to these companies in the near future.