Corruption and power distance in Greek business culture

Business Environment in Greece:

Greece is a member of the European Union (EU). However, there are many aspects of its business culture that more closely resemble the developing rather than the developed world. Corruption is famously rife in Greece: "To get more attentive care in the country's national health system, Greeks routinely pay doctors cash on the side, a practice known as 'fakelaki,' Greek for little envelope. And bribing government officials to grease the wheels of bureaucracy is so standard that people know the rates. They say, for instance, that 300 euros, about $400, will get you an emission inspection sticker" (Daley 1). This lackadaisical attitude towards the rules translates over into business, where it is extremely difficult to parse the tangled web of bureaucracy and do business in an ethical fashion (or at all) because of the need to engage in bribery of different layers of officialdom.

This is one reason that, to use Geert Hofstede's term, the power distance index for Greece is extremely wide. The roles people have make a great difference in the power they possess within Greece: this is true within the family, where there is a strong stress upon conforming to one's familial obligations and paying respect to family members but also within a work context where doing the word of the boss is more important than adhering to legal regulations. This also translates to a strong emphasis on collectivism, or not impinging upon the harmony of the larger community, even when that community demands unethical actions. Regarding the example of taxes, because there simply is no culture of tax payment, people routinely flout the laws and are regarded as being foolish for being obedient rather than morally exemplary for doing so. "When tax authorities recently surveyed the returns of 150 doctors with offices in the trendy Athens neighborhood of Kolonaki, where Prada and Chanel stores can be found, more than half had claimed an income of less than $40,000. Thirty-four of them claimed less than $13,300, a figure that exempted them from paying any taxes at all" (Daley 1).

The country's long-term orientation focus also makes it a very poor place to do business. As a nation, Greece has been roundly criticized for engaging in destructive borrowing practices that generated short-term prosperity which now has resulted in economic stagnation and a high youth unemployment rate. The focus is on the here and now rather than later on. This is yet another reason why corruption, which has long-term negative implications for the economy, is so accepted. "Kostas Bakouris, the president of the Greek arm of the anticorruption organization Transparency International, said that Greeks were constantly facing the lure of petty corruption. 'If they go to the mechanic, it is one price without a receipt and quite a bit more with it,' Mr. Bakouris said" (Daley 1).

The reasons for corruption within the business culture of Greece are thus deeply entrenched and such practices are the norm rather than aberrations: the 'shadow' economy of Greece has been estimated at 20-30%, while in the United States, it is estimated at 7.8% (Daley 1). Furthermore, respectable professionals within the country participate in the shadow economy, versus individuals who solely deal in illegal transactions. Doctors and lawyers routinely under-report their income, which is extremely easy to do since they are independent contractors. "How Greece ended up with this state of affairs is a matter of debate here. Some attribute it to Greece's long history under Turkish occupation, when Greeks got used to seeing the government as an enemy. Others point out that, classical history aside, Greece is actually a relatively young democracy" (Daley 1). For many years, Greece was governed by a right-wing dictatorship which further fostered animosity to the government. Even in ancient times, Greece was composed of a conglomerate of city-states, versus a single, unified country, and there was a sense of responsibility to one's family and immediate town more so than a larger, abstract entity as a citizen.