This paper aims at giving a micro-foundation to the phenomenon of corruption, focusing on intra-organisational corruption. Internal corruption (intra-organisational corruption and internal corruption will be used interchangeably) is defined as the use of power granted in an organisation to enrich oneself. Two additional restrictions are applied as to further limit the definition of corruption. For an act to be labelled as corruption it has to consist, of at least, two parties who actively agree on the transaction without the threat of illegal violence or other types of illegal punishments. Further the transaction has to be a two way transfer where both receive a revenue. Thus we do not consider extortion or theft as corruption, while embezzlement or insider trading could be classified as corruption dependent on the situation.