International money laundering poses risks for multinational companies to be exploited or involved in unethical business activities. Money laundering as a transnational business phenomenon presents a wicked problem that cannot be entirely controlled but can be mitigated. Challenges in mitigation stem from the possibility of exploiting legal business activities to launder illegally obtained funds. Consequently, certain activities end up in a grey area, meaning that they are not illegal but may be morally questionable. To mitigate the problem effectively, this complex phenomenon needs to be understood properly.

This thesis is built upon examining institutions, both formal and informal, and the influence they have on the occurrence and mitigation of international money laundering. This thesis comprises an introductory essay and three original articles. The introductory essay positions the study and introduces money laundering in the context of international business (IB). Consequently, the wicked problem of money laundering corresponding to the research objectives is explained. This introductory essay presents choices related to the research strategy and process, as well as the theoretical background of the study.

Article I identifies key streams of money laundering literature and presents avenues for related future IB research. It provides an integrated view on the phenomenon of money laundering by considering the concept, characteristics, causes, consequences and controls as important dimensions to be acknowledged. It concludes with a future research agenda for IB scholars interested in studying international money laundering.

Article II explains how new anti-money laundering-related policies emerge over time in co-evolution with new money laundering techniques. In this article, a suspected case of money laundering, related to a Finnish company Airiston Helmi, is used as an example to demonstrate the policy consequences the case had. Based on the findings of this article, repeated action events establish unethical practices within institutional voids, which can be responded to by generating new laws obstructing detrimental behaviours. This may improve the effectiveness of international anti-money laundering, as the phenomenon of money laundering tends to take place across geographical and cultural borders. This is a qualitative single case study. To conclude, a theoretical construct of emerging international compliance is proposed.

Article III focuses on unethical business practices by analysing the culture-bound microsocial contracts against the background of the international money laundering problem in the contexts of the United Kingdom and South Asia region. Causal-layered analysis is used to detangle the levels of international money laundering through remittance services in a qualitative study based on archival data and interviews. This article challenges the idea that designing formal institutional controls based on the letter of the law is the only effective mitigation mechanism of international money laundering. Furthermore, it highlights the role of cultural differences related to values and worldviews and emphasises that unethical behaviours may take place because of ethical dilemmas arising from the clashes between culture-specific values and moral norms of the general society. To conclude, a construct of the regulation paradox is proposed for future research.

Overall, the thesis focuses on money laundering in the context of IB and presents a novel approach by emphasising the grey area between illegal and unethical business practices. It contributes to institutional, co-evolution and integrative social contracts theories by emphasising the influence of culture-specific values, norms and behaviours and their evolutionary nature as important factors in sustaining and mitigating money laundering. As a policy implication, this study suggests that policymakers and multinational companies adopt a proactive approach in developing policies and internal practices that enable effective mitigation of money laundering. From a practical perspective, it is suggested to pay additional attention to distinguishing culture-bound causes for engagement in unethical business practices and money laundering. Legitimising or engaging in such behaviours may stem from deep values that vary depending on the culture, community and context. Understanding this could help practitioners design and implement more effective means to mitigate the causes and consequences of money laundering. The study concludes that the wicked problem of international money laundering must be addressed in a holistic manner, considering both formal and informal institutions and their influence on international money laundering, unethical business practices and their effective mitigation.