International Business and Corruption

International business and Corruption

In 1977, The United States was the first country to think about business practices on the international market. The Foreign Corrupt Practices Acts is a set of rules to be respected by any company related to the U.S. It strictly forbids any kind of compensation, bribery or kickbacks.

Two main issues remain. First of all, since 1977, several scandals have been revealed relatively to US firms. The recent Wal-Mart corruption scandal in Mexico is an example of this. Then, the FACP focuses on the international market. However, the US companies are not the only players of this market. The other countries did not seem to care these issues for a very long time. If this was an issue in 1977, it is even more complicate today that foreign business is an ever-growing part of the American economy.

The main critics of the FACP complained that it was a competitive disadvantage for U.S companies. The competition is fierce on the market, especially with European companies who do not play by the same set of rules. Dealing on the international markets mainly means dealing with cultural differences. In her article “Learning to navigate through the seas of ethics”, Sophia Kusyk mentions the “gift giving culture” in China. Those gifts do not need to be expensive but they are essential in Business relationships. The American manager may have an internal dilemma between competing with others and respecting U.S laws.

In this context, a lot of managers, chose to act by the phrase ‘When in Rome”, a way of rationalizing their disobedience of the laws established. Some even protest that they are simply respecting the culture difference. It looks like a logical reasoning especially in countries where the government itself is known as corrupted. However, this way of thinking might be the reason why 35 years after the FACP, scandals still happen.

Thankfully, other countries decided to follow the example set by the U.S. Companies from 135...