Name an Oxymoron: Business Ethics

By Goudy, Gene | Business Credit, March 2003 | Go to article overview

Name an Oxymoron: Business Ethics


Goudy, Gene, Business Credit


Okay, so maybe it isn't the best oxymoron, but you have to admit the perception of international business practices is not exactly "Snow White" clean. Additionally, with the multitude of Enron, Tyco and dot-com disappointments over the past few years, many of us are starting to question the role we play in shaping an ethical playing field. How do other companies address the relatively recent laws such as the Foreign Corrupt Practices Act (FCPA), Sarbanes-- Oxley and the International Bribery and Fair Competition Act of 1998?

Foreign Corrupt Practices Act

One of the issues for all multinational corporations (MNC) relates to the ethical and cultural aspects of their targeted markets. Whether you are shipping wheat to Latin America or driving logistical and marketing expertise into European and East Asian countries, the practices and philosophies boil down to similar concerns. Specifically, a multinational cannot market "American Style" on an international basis and expect success. Nor can an American MNC expect to maintain the same transactional methodology throughout the world and expect to be universally successful. However, we are expected to hold our subsidiary and foreign partners to a standard that may present a competitive disadvantage.

Since cultural norms and values vary across borders, it is safe to assume that moral conflicts or ethical dilemmas will always exist. Taking this one step further, if the laws differ across borders, then both ethical and legal dilemmas arise. Of course, our political leaders have taken steps to level this playing field with regulatory practices such as the FCPA.

According to some of my research, the activity of illegal activities and bribery has changed very little from an investigation performed by the SEC in the mid-1970s. At that time, the SEC revealed that "over 400 U.S. companies admitted making questionable or illegal payments in excess of $300 million to foreign government officials, politicians and political parties." The abuses ran the gamut from high officials to government personnel performing clerical duties. The Carter Administration promoted a punitive law for similar actions, which was well received by the American Public, and resulted in Congress passing the Foreign Corrupt Practices Act (FCPA).

"The FCPA makes it unlawful to bribe foreign government officials to obtain or retain business. The anti-bribery provisions apply to public and non-public corporations, partnerships, associations, joint ventures and citizens of the United States. In short, it applies to all business entities. The act specifically prohibits bribes with either a direct payment, or an indirect payment through an intermediary, although a recent survey by Control Risks Group (CFO Magazine, January 2003) reflected that 70 percent of respondents believe that bribes are made through intermediaries.

In a place long, long ago, many of us may have heard "you may have to grease the wheels a little to get"... (place the current concern here). It puts chills on the back of my neck just to write it! The implication, of course, is that a bribe must be offered for a business transaction or legitimate service to be performed. As a society, through acts such as the FCPA, we have clearly stated that this is not an acceptable business practice. Additionally, we have stated that American MNC's will be penalized if they participate or accept this as a normal practice.

Criminal penalties may be applied, although it appears that the civil penalties are the rule. Firms are subject to a fine of $2,000,000; officers, directors and stockholders are subject to a fine up to $100,000 and imprisonment for up to five years. Fines imposed on an individual may not be paid by the firm. Under certain circumstances, and under federal laws other than the FCPA, individuals may be fined up to $250,000 or up to twice the amount of the gross gain (to the defendant) or loss (to another person) resulting from the transaction. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Name an Oxymoron: Business Ethics
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.