Chapter 5: Corruption and Adaptive Responses: The Case of Institutionalized Deviant Practices in Corporations

Strategic management scholars have acknowledged the existence of a dark side of strategy, but have failed to consider how companies engage and adapt “dark and immoral” non-market strategies to gain competitive advantage and to maintain corrupt alliances. In this chapter, I analyze the use of corruption as a non-market strategy by construction companies’ suppliers of the Oil and Gas Company Petrobras from 2002 to 2014. The author use verifiable court decisions and analyze the set of rules created by a corrupt cartel to enact their corrupt strategies. The author extend the management literature by showing how a corrupt group of firms adopt a series of strategies not only for their short-term competitive advantage but also to maintain their internal cohesion. Finally, the author develop a model that explains the maintenance of long-term corrupt relationships.