The ethical issue I have selected is bribery and corruption in the international business setting. This is a prevalent issue that has garnered significant attention in recent years, as several high-profile cases involving multinational corporations have shed light on the extent of unethical practices in international business dealings. One article that discusses this issue is titled “Bribery and Corruption: The Unethical Side of International Business” and it was published in The Economist on January 25, 2021.
This article highlights the case of a multinational corporation that was recently embroiled in a bribery scandal. The company in question had allegedly paid substantial bribes to secure a lucrative government contract in a developing country. The investigation that followed revealed a complex network of corrupt practices involving government officials, middlemen, and company executives. The article emphasizes the negative impact of bribery on both the local economy and the reputation of the company involved. It also highlights the significant legal and financial consequences that the company faced as a result of this unethical behavior.
The root cause of this issue can be attributed to various factors. First and foremost, the allure of securing lucrative contracts or business opportunities in foreign markets often leads companies to engage in bribery and corruption. This is particularly prevalent in countries where corruption is endemic and ingrained in the business culture. The lack of strong regulatory frameworks and enforcement mechanisms in such countries further exacerbates the problem.
Moreover, the pressures faced by companies operating in highly competitive international markets can also contribute to the prevalence of bribery. In an attempt to gain a competitive edge or secure important contracts, some businesses resort to unethical practices. Additionally, the complexity of international business transactions, cultural differences, and limited transparency can create an environment conducive to corrupt practices.
The article suggests that managers of international firms play a crucial role in addressing these issues. To effectively tackle bribery and corruption, managers should establish a strong ethical culture within their organizations. This can be achieved by promoting a zero-tolerance policy towards corruption and ensuring that all employees adhere to high ethical standards.
Furthermore, managers should invest in thorough due diligence processes when entering new overseas markets. This involves conducting comprehensive background checks on potential business partners and thoroughly assessing the regulatory environment and prevailing ethical standards.
In order to address the issue of corruption, international firms should also implement robust internal controls and compliance mechanisms. This includes establishing clear policies and procedures that explicitly prohibit bribery and corruption, conducting regular audits to identify any irregularities, and providing employees with training on ethical conduct and compliance.
Engaging in partnerships and collaborations with reputable local organizations, civil society groups, and regulatory authorities is also crucial. This can help international firms gain insights into the local business environment, build relationships with key stakeholders, and contribute to the fight against corruption.
In conclusion, the ethical issue of bribery and corruption in the international business setting is a widespread problem that has serious consequences for both the companies involved and the countries in which they operate. The root causes of this issue lie in the pursuit of lucrative business opportunities, weak regulatory frameworks, and a lack of transparency. Managers of international firms should address these issues by promoting an ethical culture within their organizations, conducting thorough due diligence, implementing robust internal controls and compliance mechanisms, and engaging in partnerships with local stakeholders. Only through these measures can companies begin to combat the issue of bribery and corruption and create a more ethical and sustainable international business environment.