International Business

Corruption and ethics in international business
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Abstract
Corruption has been a challenge in many countries around the world and it has been prohibited in almost every country. Globalization has led to increase in business transactions among states and some of them have been accompanied by a bribery-a major facet of corruption. Different countries have different policies that govern trade and multinational companies may see these policies as an obstruction to enter the foreign market. Many International companies usually offer bribes to influence the foreign officials into making favorable decisions towards the companies. Engaging in corruption is unethical and can have adverse effects on business as well as the economy of the country. Large-scale bribery delays and interfere with both political and economic development in a country. Despite being prohibited, and companies adopting anti-corruption policies, there is many occurrences of this unethical business practice. This paper summarizes an article about corruption incident, discusses factors that possibly led to the incident and how managers can prevent corruption in international business practices.

The article that was on The New York Times on March 24, 2010, is about the corruption charges against Daimler, a German car manufacturer. The automaker had to pay over 185 million dollars in fines and plead guilty of bribing foreign officials in over 22 countries across the world. The company bought off the foreign government officials to secure contracts with the government entities for the purchase of the company’s cars worth millions.

Those involved in the corruption case were both the executives and junior employees. The bribes were passed through the banks as well as through the employees and were offered in the form of cash or property (DealBook, 2010).
Companies are required to secure various documents such as licenses, registrations, permits and other governmental approvals before entering a foreign market. Multinational companies may see these policies and procedures as a hindrance to their operations and this has led to many incidents of corruption (Lambsdorff, 2007). Large companies have access to huge financial resources and they offer financial incentives to influence the foreign officers thus, allowing the corporations enter the market or win multimillion government contracts. Weak anti-corruption policies in some companies and countries have led to the rise of the bribery incidents by the multinational corporations in those countries.
Managers should include clear anti-corruption policies in their company’s policies. The international corporations should include the US Foreign Corrupt Practices Act (FCPA) terms in each of their contracts to discourage its employees in engaging in corruption. The management should not only adopt anti-corruption policies but they should fully implement and internalize them as part of their corporate culture. The culture of an organization is critical to promoting ethical business practices. In case of an occurrence in a bribery incident, the management should do its internal investigation and the persons involved should be held responsible.
References
Lambsdorff, J. G. (2007). 1 Causes and consequences of corruption: What do we know from a cross-section of countries?. International handbook on the economics of corruption, 1.
DealBook (2010).Daimler to Pay $185 Million to Settle Corruption Charges. Retrieved 23 February 2018, from https://dealbook.nytimes.com/2010/03/24/daimler-to-pay-up-to-settle-corruption-charges/