For awhile the use of facilitation payments to obtain favour (s) has been controversial and this is due to people considering it as being a form of bribery. While Bribery is the corrupt payment or receipt of anything of value in return for official action, facilitation payments involve paying a small sum of money to a public official to ensure they carry out their duties promptly or at all. The purpose of this paper is to review and compare two articles on facilitation payments and corruption in multinational corporations from different perspectives such as their main points, arguments, implications to society, and others. This review will analyse the article “Facilitation payments: culturally acceptable or unacceptably corrupt”, as written by Robert Bailes, and “Corruption and companies: the use of facilitation payments”, written by Antonio Argandona.
Bailes sees facilitation payments in multinational corporations (MNC’S) as a form of corruption. He argues that although there are some claims that there is a distinction between facilitation payments and bribes, this should not be so because facilitation payments can have damaging consequences to the economy. On the other hand, Argandona views facilitation payments more from the point of view of the MNC’S that the payments. He views facilitation payments as a form of “petty” transgressions because what the payer wants to be done is not illegal, but something that exceeds their authority.
Corruption still continues to thrive especially in multinational corporations under the guise of facilitation payments (Bailes 2006: 297). Despite the adverse effects it has on MNC’S, such as reducing accountability, diverting valuable resources away from economic and social development, and bols...
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...he thing of value or a third-party”.
In conclusion, for the fact that corruption is routine in many multinational corporations and countries as a whole, does not make it right. From an ethical point of view, paying someone to accomplish a task, no matter the amount should not be considered as moral, regardless of it being seen from any cultural perspective. Bailes put up strong arguments as to why facilitation payments should be prohibited due to the negative consequences it produces and the adverse effects it has on most multinational corporations. Argandona took a general perception on facilitation payments, noting that in some societies, it is regarded as a way of getting business done more effectively or at all, although he also agrees that facilitation payments may represent a step towards a culture of corruption in a society, hence should not be tolerated.
Anti-bribery laws in the U.S. were established to prevent the rampant corruption exhibited in the Airbus case study. Similar anti-corruption laws do not exist in many of the host countries the U.S. does business with. Host county’s laws and regulations take on different forms especially when power, money and politics are involved, manipulating or creating a new set of rules to benefit their own selfish needs. Savvy sales negotiators, like those at Airbus, seek opportunities through loop holes, off shore accounts and large sums of bribery money, to entice country officials or others with the authority to make purchases to commit to Airbus. A more uniform worldwide approach to international laws needs to be adapted, implemented and more importantly enforced, so all companies involved can conduct fair business practices under the same set of rules.
Chetwynd, Eric, Frances Chetwynd, and Bertram Spector. "Corruption and Poverty: A Review of Recent Literature." Management Systems International (2003): n. pag. Print.
Bribery occurs when money, services, goods, information, or anything else of value is offered with intent to influence a person’s actions, decisions, or opinions of the accuser. Charges can be brought against an individual, whether they offered the bribe or accept it. Bribery and public corruption cases frequently make headlines new stories daily. Bribes can take the forms of gifts or payments of money in exchange for favorable treatment like awards of government contracts (Mince-Didler, n.d.). Government officials tend to gain a huge incentive with bribery while serving their term. Other forms of bribes may include privileges, services, various goods, property and favors. Bribes are always intended to influence or alter the actions of individuals with political and public corruption (Mince-Didler, n.d.).
Professor Nichols. “The list of countries that have been politically or economically crippled by corruption remains to develop, and businesses with continuing benefits abroad will ultimately be harmed by any plans that include bribery.”
Often times, Americans do not realize the corruption that surrounds them in their nation. Capitalism is an economic and political system in which the country’s trade and industry is controlled by private owners for profit, rather than by the state. Business owners, CEO’s, corporations, and large businesses have the propensity of taking extreme advantage of the power capitalism brings. For decades companies and corporations have been taking unexplainable benefit of the power they have. Capitalism in the Unites States leads to corruption.
The use of media can be an extremely powerful tool to help combat corruption when everyone is on the same page. Global Integrity is an organization based in Washington, D.C. which reports international corruption trends (Heller, 2007). Global Integrity is exactly what is needed in order to combat corruption across the globe. Unfortunately Global Integrity is not a source in which information is easily obtained by a normal citizen. In order to combat corruption it is in the hands of everyday citizens to do their part to help. Corruption is not often fought by politicians, as many misinformed people would think, as they are often the ones partaking in these practices, or condoning them. Although Global I...
To make a payment in exchange for special consideration where the recipient has a duty to offer equal consideration to all (more commonly referred to as bribery) is morally reprehensible on three distinct grounds. Not only does it violate inherent principles of justice and equality by enabling one to use their wealth in order to attain or reinforce influence, it also provokes the recipient to violate the positional responsibility that they have tacitly agreed to uphold (this duty is therefore contractually binding): namely that he or she will perform their role in a manner that adheres to the rules of the organisation in question. The covert nature of the bribe is also problematic; once a bribe is uncovered, the vitality of the entire organisation is endangered because people will inevitably question the integrity of all prior actions undertaken by the affected institution. I shall argue that bribery is wrong regardless of whether the bribe has any impact upon the actions of the recipient, for the motivation that underlies an action is as important as the action itself. Only when one knows institutional corruption to rife can bribery be deemed common practice; in this case, one has a moral right to violate the duties of their position, for their duties require them to engage in corrupt practise.
Bribery is wrong, and it would be almost instinctive to point at the benefits of impartially functioning public servants and incorrupt corporations to our democratic society as justification. However, in this imperfect world where bribery is rife in varying degrees, is it possible to express this notion convincingly? Certainly 'because the UK Bribery Act says so' is far less persuasive to a council planning office in Shanghai than in London, and indeed in compliance with section 7 of the Bribery Act 2010 which relates to commercial offences, it is essential that this question is engaged with on a corporate scale and without assertion through dogma. Accordingly, this essay will argue that elements wrong with bribery are inclusive of both moral and economic considerations. Moreover, in conjunction with international mandates, advent of aggressive legislation such as that of the UK Bribery Act 2010 is representative of global efforts to eliminate bribery. Hence, it follows that bribery can never be considered a normal part of business because it is economically unsustainable in the long term.
Corruption consists in the illegitimate agreement between a corruptor and a corrupted, in which they abuse of their public power in order to obtain personal benefit. Bribery and corruption is something that has been going on for years. According to Allen, “officials perceive themselves as immune to any penalties for demanding and receiving bribes” which she states that it is one of the main reasons for bribery and corruption in underdeveloped countries. According to Transparency International, an organization committed exclusively to end corruption, three of the most corrupt countries in the world are Somalia, North Korea and Afghanistan. This does not mean that corruption is only seen in underdeveloped countries. In international business, corporate employees often find themselves dealing with corruptors in foreign countries and, in most cases, they will give in.
One of the major issue within the Modern Mining industry is maintaining integrity and ethically compete within the global market, which requires discrimination on any acts of bribery. The actions of Bribery defined by AAMIG president Bill Turner ‘Bribery is a payment for something to which you’re not legally en¬titled’ . Bribery comes in multiple characteristic and forms, such as the facilitation payment. Conversely, In order to remain competitive within the global mining market, every business must source an effective workforce meaning t...
The procedure of giving and taking bribe is called ‘corruption’, and almost in all countries around the world it is forbidden; as a result, participating in this procedure leads to some punishments. Kind of punishment may vary depending on countries’ law; therefore, in one country it can be some monetary fine, while in other
Over the last few years, the issue of corruption--the abuse of public office for private gain--has attracted renewed interest, both among academics and policymakers. There are a number of reasons why this topic has come under recent inspection. Corruption scandals have toppled governments in both major industrial countries and developing countries. In the transition countries, the shift from command economies to free market economies has created massive opportunities for the appropriation of rents, excessive profits, and has often been accompanied by a change from a well-organized system of corruption to a more chaotic and deleterious one. With the end of the cold war, donor countries have placed less emphasis on political considerations in allocating foreign aid among developing countries and have paid more attention to cases in which aid funds have been misused and have not reached the poor. And slow economic growth has persisted in many countries with malfunctioning institutions. This renewed interest has led to a new flurry of empirical research on the causes and consequences of corruption.
The existence of bribery and unethical behavior is rampant in the world market and may not change overnight. The question of bribery has been distilled in business literature as a question of ethics. In this situation at the airport with the customs officer, it is important to distinguish between business ethics and personal ethics. In a business ethics situation, the Foreign Corruption Practices Act would prohibit offering any bribe to the custom office – for example to free a shipment of goods that was lost in red tape (Pitman & Sanford, 2006). Most companies also have policies against bribery as well. In this situation, however the main issue at hand is that of personal ethics. When in a situation where your company is unknown and there is no business being conducted, normal business ethics and laws (including FCPA) do not apply only personal ethical standards.
In this essay,we have seen evidence that corruption leads to instability in the economy,increases the transactional cost,decreases efficiency, hinders the growth of a healthy marketplace and harms the social and economic development.Therefore,it’s fair to say that Corruption has had a serious effect on the Indian Economy.If left unchecked,India is bound to lose FDI investments as investors will lose trust in the economy. “Lost opportunities caused by corruption in regards to growth,jobs and investment; India has lost up to $45-50 billion a year”(Singh 2010).
Montesh, M. (n.d.). Conceptualizing Corruption: Forms, Causes, Types and Consequences. Retrieved May 4, 2014, from