Corruption and Ethics in Global Business
There are ethical concerns with international business that includes conditions, outsourcing, workplace diversity, equal opportunity, and working standards. Child labour, religion, human rights, integrity, corruption, and bribes are ethical issues encountered in the business environment. It is noted that thirty-one per cent have lost their businesses as a result of corruption risk. It has gradually increased from twenty-three per cent, and more rise to thirty-seven per cent have delayed acquisition and pulled out because of Corruption.
Corruption is classified as giving an advantage by illegitimate, inconsistent, and immoral with individual responsibility or other people’s rights. Modern society has placed business ethics as following the right and culturally accepted beliefs that are not an ethical choice. To some point, what could be acceptable to others may not be acceptable with the growth of society’s mindset on sexism or racism. There might be conflicts in global business exercises in a cultural setting because giving gifts could be bribery, which is one form of corruption Bahoo et al.2020).
The history or background of the key issues
Corruption has been widespread in several countries. Bribe has been considered as grease payments that are little inducements aiming at expediting transactions and decisions. In countries like Mexico and India, the grease payment significantly assists in installing the phone quicker either at the job or home. The transparency international has monitored illegal behaviours like embezzlement and bribery in public departments in more than one hundred and eighty states through surveying the business executives. They then give the Corruption perception index (CPI) rating to every country. Singapore, New Zealand, Sweden, and Denmark are lower in corruption, while most African countries, Afghanistan, Russia, and Myanmar, are considered to have a very high level of corruption rating.
The transparent International conducts an analysis every year to monitor the global trend of corruption. In 2011 there was an exception where the Global corruption Report from 91500 individual experiences and opinions in eighty-six countries and states. The report indicated an increase in corruption in the past their years with six among ten individuals involved. On the other hand, one among four individuals claimed to have engaged in paying bribes in the previous year. The corruption opinions were much negative in North America with 67%, and Western Europe presented 73% of individuals who gave ideas of increase in corruption cases. The issues arising from the financial crises have continuously affected society’s views on corruption, most considerably in Western Europe and North America. Institutions have taken focus to restore trust and good governance.
Twenty states and more have been found increasing the issues of petty bribes from 2006. The countries with a large rise are Kenya, Thailand, Russia, Colombia, FYR Macedonia, Poland, Senegal, and Chile. More than two-person are claimed to indulge in bribe payments causing an increase in these cases. The poor are more possibly likely to get involved in bribes through services like education compared to Wealthier.
It is surprising that even the most respected global organization have encountered unethical issues and against the law. After an investigation in 2008, Siemens Company agreed to have paid more than 1.34 billion Euros as a fine to Europe and America to handle the charges of bribery and slush of finances to get a big public contract in the world. The company’s official claimed that Siemens started in the 1990s and used kickbacks and bribes to foreign Officials to gain government contracts for the projects such as nation Identity cards in Argentina, national wide cell phone network in Bangladesh, and mass transit network in Venezuela. It also secured a contract on oil- for – food project with the UN in Iraq under Saddam Hussein. The head of FBI, Joseph Persichini Jr, indicated that the behaviours were claimed not to be an anomaly. During these operations, bribery was applied like a business strategy by the company executives. In a year past, one amongst four individuals pays bribe in one of nine services and institutions, from health to education toward the Tax authority. From the continuous review, the police have indicated that most of the reported cases are bribery. 30% who had a survey with police have engaged in paying bribery.
International company and how they handled this topic
The security and Exchange found Total S.A violating the Foreign Corrupt Practices Act (FCPA) through the payment of sixty million US dollars bribes to intermediaries of Irian government officials. The official helped in having a valuable contract to develop oil and gas fields in the country, Iran. Therefore they charged the France based gas and Oil Company for illegal practices and violations (Bhambri, 2020).
SEC alleged the Total making one hundred and fifty millions US dollars profits from the project. The company tried to cover the payment by engaging in a sham consulting agreement with the Iranian officials by creating business development expenses to make it legitimate. The total company was so disadvantaged without enough systems to check on consulting agreements well and improper internal controls to adhere to federal laws Bunning the bribery.
The Total Company was charged by criminal justice and used its profits to pay for criminal penalties. The Sec order started settling the administration proceedings by aligning the company and Iranian official who had a meeting before starting the contract and signing an agreement. The charges forced the Total Company to comply and refrain from violating section 30A, section 13(b) 2A and 13(b) 2Bof security exchange Act 1934 (Sartor, & Beamish, 2019).
The total payment for the penalty was 245.2 million US dollars. The amount placed on the prosecution agreement in criminal proceedings. The charges also proceeded to violations of French law. Sharon Binger did SEC investigation, Barry O’Connell New York Regional officer in enforcement division being helped by enforcement division FCPA section and criminal justice department of fraud. The French regulatory authorities also significantly helped.
Recommendations
Following increased cases of corruption, the Anti-corruption and ethics bodies are supposed to place a harsh and strict penalty on the culprits of corruption and unethical behaviours. There should be proper prosecutions of the culprits and charged for violations. It will deter officials from indulging in unethical practices and bribes. The law should impose heavy fines and life prison jail or else death for anyone involved in illegal deals. It will inflict fear to those with intentions.
Audits and Investigation should be regular carried out in companies to tract financial records of the finances. The company official should implement policies of regular internal and external audits to detect if there are suspected cases of unethical practices and corruption issues in the company. This will significantly help the company monitor financial use, allocation of resources and seal the weak points.
The relevant boarding should also team up in fighting unethical practices and corruption. It will ease the due process and effective dealing with a corruption case.
References
Bahoo, S., Alon, I., & Paltrinieri, A. (2020). Corruption in international business: A review and research agenda. International Business Review, 29(4), 101660.
Sartor, M. A., & Beamish, P. W. (2019). Private sector corruption, public sector corruption and the organizational structure of foreign subsidiaries. Journal of Business Ethics, 1-20.
Bhambri, G. (2020). Business Ethics & Anti-Corruption in Indian Economy. Studies in Indian Place Names, 40(70), 3261-3266.