In recent times, a number of organizations in the U.S have been caught up in corruption-related incidences (Cockcroft, 2013). One example of organizational corruption in the U.S involved an insurance giant known as American Insurance Group (AIG). Over the years, the CEO of the company Joe Cassano engaged in several fraudulent activities that saw AIG run bankrupt. Despite him being at the center of the corruption scandals that rocked AIG, the leader went scot-free and was never convicted due to lack of enough evidence. The corrupt dealings were so rampant that Mr. Cassano walked away with millions of dollars in profits while the insurance giant collapsed and had to be bailed out by the government.
In most corruption cases, there are various types of power that give the corrupt individuals a leeway to get involved in under-hand deals. In the case of AIG, the key type of power that was prevalent and potentially contributed to the problems is expert power (Tost et al., 2013). Notably, the CEO was handed over the powers by the appointing authorities based on his expertise and ability to lead an organization as big as AIG. However, as a result of his greed and desire to rip off the organization, he intentionally got involved in corrupt dealings that saw AIG lose millions of dollars. Another type of power that could have led to the prevalence of corruption at AIG is absolute power where all key decisions were left under the manager (Deschamps et al., 2016). Consequently, the manager took advantage of the powers conferred to him and decided to get involved in corrupt activities. Power inequalities at the institution made it difficult for the juniors to question the actions of their leader prompting him to get involved in several corrupt businesses in the organization.
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- Cockcroft, L. (2013). Global corruption: Money, power and ethics in the modern world. IB Tauris.
- Deschamps, C., Rinfret, N., Lagacé, M. C., & Privé, C. (2016). Transformational leadership and change: How leaders influence their followers’ motivation through organizational justice. Journal of Healthcare Management, 61(3), 194-212.
- Tost, L. P., Gino, F., & Larrick, R. P. (2013). When power makes others speechless: The negative impact of leader power on team performance. Academy of Management Journal, 56(5), 1465-1486.
