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.
The United Nations Convention against Corruption as a way of life. Ed. Passas, Nikos and Dimitri Vlassiss.
When dealing with corruption, first question to ask or to clarify is what corruption is. NSW Research (2002) describes corruption anything from gaining materialistically by virtue of position (for eg. getting a special discount at stores) to engaging in ‘direct criminal activities’ (eg. selling drugs). Newburn (1999) believes that there is a thin line between the definition of ‘corrupt’ and ‘non-corrupt’ activities as at the end, it is an ethical problem. For common people, however, bribery generalises corruption.
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.
Over the past 37 years, The Nike Brand has evolved into a successful multi-billion dollar corporation. It has also grown to be the world's largest marketer of athletic footwear and apparel. The company’s products are sold in over 180 countries worldwide and 20,000 retail stores domestically. Nike also operates retail stores overseas such as Nike Towns and factory outlets. Although Nike is involved in the design, development, and marketing of the product; the products are manufactured independently. In addition to its wide range of athletic shoes and apparel, the company also sells Nike and Bauer brand athletic equipment, Cole Haan brand dress and casual footwear, and the Sports Specialties line of headwear.
Chetwynd, Eric, Frances Chetwynd, and Bertram Spector. "Corruption and Poverty: A Review of Recent Literature." Management Systems International (2003): n. pag. Print.
What major technology change has had the greatest impact on the quality of your life?
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.
The world of business has undergone radical and dramatic changes in the last decade changes that present extraordinary challenges for the contemporary manager. A manager is an organizational member who is responsible for planning, organizing, leading, and controlling the activities of the organization so that the goals can be achieved. According to a widely referenced study by Henry Mintzberg, managers serve three primary roles: interpersonal, informational, and decision-making. Management is process of administrating and coordinating resources effectively and efficiently in an effort to achieve the goals of the organization.
Since the motto “Doing Well By Doing Good” appeared, the number of businesses that have adopted it has increased over time. In order to tell whether this increase is substantial and significant we must first analyze the steps into which this motto has gone through. The implications it has on the market and economy as a whole will also be determinants of whether to adopt the motto or not. In the essay below we will go through the evolution of the meaning of the motto, the concept of social responsibility, the supporters’ argument and their cons.
Global Challenge: Building the New Worldwide Enterprise. McGRAW-HILL Book Company Europe. NEELANKAVIL, James P. (2003). International Business Corruption: A Framework of Causes, Effects, and Prescriptions. Hofstra University Press.
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).
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.
Montesh, M. (n.d.). Conceptualizing Corruption: Forms, Causes, Types and Consequences. Retrieved May 4, 2014, from
In Spain there are many cases where politicians have charged illegal commissions in exchange for granting contracts, two large examples are “Gurtel case” and “three-percent scandal”. On both cases, politicians demanded a percentage in exchange for giving jobs or concessions. Another form of corruption present in Spain where this linkage is shown is the urban development with examples as “Operation Malaya”, where the perpetrators have been convicted of a multitude of illegal activities (bribery, embezzlement of public funds, breach of trust, influence peddling, etc.).