Government & Corporate Corruption: Are they related?

During a discussion a friend of mine opined that government and corporate corruption is not related. I beg to differ. Here, I am including public sector companies with 'government' and by corporate I am presuming privately owned companies was meant in the discussion.

If we only try to see a little beyond the obvious, we will notice the invisible link. Why would I pay bribe to the accounts department of a privately owned corporation to get my payment? The answer is that I wouldn't if there is a viable alternative. I would stop doing business with such a company. Period. And in most of the cases I would have had an alternative, had the government owned companies, "the Public Sector", worked honestly.  For example, if the now defunct HEC Ranchi was run honestly, it would have given so much business to other companies that they wouldn't go to other privately owned suppliers. When that happened, the purchase department of private company would not have guts to ask for bribe to place an order. BHEL would have diversified and added family car manufacturing to it's portfolio. Vijay Deluxe (do you remember?) would have produced millions of scooters and people in 1960s-80s would not be waiting for 5 years to buy Bajaj Priya or pay Rs 10K premium for a 5k two wheeler. BEL would be dumping market with fingerprint, face recognition and other bio-metric instruments, ECIL (does it even exist now?) would be making big bucks with PC, Tablets and what nots. By honesty I do not mean just bribes. I mean doing the work they were actually supposed to do, honestly.
The word "Reforms" in industry has become almost synonymous with selling off of Public sector companies. Why have we not been able to run these great public sector companies profitably and innovatively? The lack of enthusiasm among public sector employees is because they are disgusted and demoralized with dishonesty at the topmost management level - who are inevitably hand in glove with corrupt politicians and bureaucrats. So yes, in my opinion, there is a strong connection between corruption in government and corporate world. Moreover, honest governance will create an environment where it will be very difficult for corrupt practices to prosper.

My point in the original discussion was this: we need not worry too much about the corruption in privately owned companies - the oxygen for corruption here comes from corruption in government. If the government is run honestly, the ills of corruption in privately owned corporations would go away almost on their own, automatically.