Managing the Risks of Global, Bribery in Business
Case Analysis for ACCT 6390 – Spring 2016
Ebraheem Almakrami
The issue of bribery has long been considered unethical and unfair. This classification led people to invest in finding ways to justify bribery differently based on their culture. Bribery could be descried as gifts in many countries like Japan, Saudi Arabia, and the United Arab Emirates. In other parts of the world like Brazil, Russia, India, and China, bribery is looked at as business expense. The issue of bribery is complicated and requires clear distinction between right and wrong, between gifts and bribes.
In Business, there are three main ethical issues related to bribery. Added costs of business is the first issue, where businesses are forced to pay bribes to conduct business in certain places. For example, Walmart paid government officials to get the necessary licenses to operate in Mexico. Walmart paid these bribes to get preferred and fast services from these Mexican government officials. Another example is RAE Systems Chinese joint ventures. The company paid some officials to secure a 3 million contract. Moreover, companies have used bribes to stop their competitors from competing in new markets. In China, Coca Cola paid some officials to get an exclusive deal for three years to sell in Chinese markets and keep Pepsi out. The issue of gaining advantage for a bribe is clear where the stakeholders are government officials, companies and their competitors. In all of the previous example, we can see that bribe created an unfair environment, where some companies got unfair advantages. The existence of fair competition is nearly impossible in such environment and the damage exceed to reach the final consumer. The final consumer has the right to receive fairly priced and produced services and commodities. A fair competitive market could satisfy this right. However, with the existence of bribery, the competition in the market is damaged. The affects on the final consumer is not limited to prices and quality. The consumer has the right to get …show more content…
Bribery is defined as the offering of payments or other incentives to gain illicit advantages. The definition suggests that bribes are usually offered. This could support the argument that bribes encourage corruption. However, bribery could be more common that it is expected. The expectation of a bribe takes productivity and fairness to lower levers and creates a more advanced stage where bribes surges and corruption becomes a phenomenon. The last and most advanced stage of corruption appears when obstruction comes to effect. In this stage, people in charge would start making business harder and may even stop it all together seeking bribes. The damages of bribes in this stage is dangerous and require hard and big changes in the legal systems. Unfortunately, many countries do not have strict laws and regulations that prevent or criminalize bribes. In fact, some countries may even legally consider bribes, especially outside the country, as business expenses. The US and the UK have strong laws that prohibit and criminalize bribes even for business overseas.
In conclusion, unfair markets, disadvantaged consumer and affected government are the main stakeholders in many cases where bribery happens. Bribery creates unstable and unsafe markets for business. It adds challenges to the starting of new businesses and expanding of even continuing operations of some other businesses. Bribery also affects many consumer’s
Case Analysis for ACCT 6390 – Spring 2016
Ebraheem Almakrami
The issue of bribery has long been considered unethical and unfair. This classification led people to invest in finding ways to justify bribery differently based on their culture. Bribery could be descried as gifts in many countries like Japan, Saudi Arabia, and the United Arab Emirates. In other parts of the world like Brazil, Russia, India, and China, bribery is looked at as business expense. The issue of bribery is complicated and requires clear distinction between right and wrong, between gifts and bribes.
In Business, there are three main ethical issues related to bribery. Added costs of business is the first issue, where businesses are forced to pay bribes to conduct business in certain places. For example, Walmart paid government officials to get the necessary licenses to operate in Mexico. Walmart paid these bribes to get preferred and fast services from these Mexican government officials. Another example is RAE Systems Chinese joint ventures. The company paid some officials to secure a 3 million contract. Moreover, companies have used bribes to stop their competitors from competing in new markets. In China, Coca Cola paid some officials to get an exclusive deal for three years to sell in Chinese markets and keep Pepsi out. The issue of gaining advantage for a bribe is clear where the stakeholders are government officials, companies and their competitors. In all of the previous example, we can see that bribe created an unfair environment, where some companies got unfair advantages. The existence of fair competition is nearly impossible in such environment and the damage exceed to reach the final consumer. The final consumer has the right to receive fairly priced and produced services and commodities. A fair competitive market could satisfy this right. However, with the existence of bribery, the competition in the market is damaged. The affects on the final consumer is not limited to prices and quality. The consumer has the right to get …show more content…
Bribery is defined as the offering of payments or other incentives to gain illicit advantages. The definition suggests that bribes are usually offered. This could support the argument that bribes encourage corruption. However, bribery could be more common that it is expected. The expectation of a bribe takes productivity and fairness to lower levers and creates a more advanced stage where bribes surges and corruption becomes a phenomenon. The last and most advanced stage of corruption appears when obstruction comes to effect. In this stage, people in charge would start making business harder and may even stop it all together seeking bribes. The damages of bribes in this stage is dangerous and require hard and big changes in the legal systems. Unfortunately, many countries do not have strict laws and regulations that prevent or criminalize bribes. In fact, some countries may even legally consider bribes, especially outside the country, as business expenses. The US and the UK have strong laws that prohibit and criminalize bribes even for business overseas.
In conclusion, unfair markets, disadvantaged consumer and affected government are the main stakeholders in many cases where bribery happens. Bribery creates unstable and unsafe markets for business. It adds challenges to the starting of new businesses and expanding of even continuing operations of some other businesses. Bribery also affects many consumer’s