Literature Review
This assessment unit will undertake the detailed study over the several bribery practices and influential impact in the context of contemporary business. Many studies have been proposed that explains the significant impact of briberies as practice towards corruption in business organization hampering the ethical reputation of the company and country as a whole. Bribery under practice towards corruption defined as the act of receiving or providing some values in exchange for types of actions or influences in returns, that recipient could otherwise not vary. In a business, context bribery is often regarded as a gift that influences the conduct of recipient provided in the form of goods, money, rights of action, preferment, property, privilege, emoluments, advantages etc.
The report will also represent the literature review based on several peer-review journals, textbooks and online resources to provide evidence to the information of bribery practices that have increased in the past few decades due to increased behavioural changes of individual managers and individuals under ethical and unethical attitudes. Analysis of the relation between ethics and corruption, decision making under corruption, its key models, the procedure of organizations towards maintaining cooperate integrity and accountability along with descriptive knowledge over commercial bribery and elimination for maintaining the sustainability of business organizations will also be resented.
Atan, Alam & Said (2017) defines that corruption is a method of obtaining or offering advantages using illegitimate, inconsistent or immoral with one’s rights or duty of others. The modern understanding of organizations ethics notes that culturally accepted values and norms are not always ethical choices. Cuervo-Cazurra, (2016) argues that in some culture conflicts with business management practices globally in areas of gift giving has developed into bribery, a form of corruption. Paying bribes has progressively become common in several countries contributing it a form of grease payments where small inducements intended to expedite transactions and decisions. According to a rating of CPI or Corruption Perception Index, countries like Denmark, New Zealand, Sweden and Singapore comes at lowest of corruption in regard to bribery where Most of African nation, Myanmar an Russia belongs to the highest level of corruption (Donchev & Ujhelyi 2014). Worrying facts is that many people have been reported paying bribes to a higher authority even like judiciary for getting permits and services in the past five decades. Gift offering in the global business environment is used to pay or establish respect to relationships. Cuervo-Cazurra, (2016) opinionated that bribery of other hand has become the more common practice of benefiting oneself, with no or little benefit to the company. These are paid about winning of business deals. Bribery, commonly in the form of cash payments have reached the high proportion in many countries where even locals are expressing disgust with corruption and its impact on regular life for consumers and business. In western countries towards controlling frequent consequences of corruption, some industries (e.g. Finance) has set legal guidelines restricting values of gifts maximum of $100 to avoid the perception of the individual that sees the connection in business as informal and with a negative connotation. Langseth, (2016) concludes that a business firm operating their functions globally found engaged in questionable business gifts in the form of bribery intension if caught are fined and faces sanction. But for many parts, organizations continue with usual businesses. Boles, (2014) adds that changing cultural activity of gift giving is an evolving process which will take time, more transparency and government attention in awarding worldwide business contacts.
The Foreign Corrupt Practices Act (FCPA)
FCPA or Foreign Corrupt Practices which was officially instituted on 1977 prohibits accounting offences and bribery to secure favours from several foreign officials or tempt them to act in conflict to their professional roles and responsibility (Perlman & Sykes, 2018). Every business organization with security listed in the United States legally responsible for confirming subsidiary or personnel branches in foreign nations must be FCPA compliant. Several nations globally came across common legislation and joined the international coalition for addressing corporate bribery. Giorgini et al. (2015) add that bribing professional or foreign official poses myriad of ethical and legal risks that include unfair means of compliant business gaining un-advantage with skewing market, assets abroad, limiting customer’s options and adversely impacting foreign and political policies in business context. Park (2014) argues that companies engaged in bribery actions could excuse similar practices and broad in several countries globally, where the refusal of engagement in global business context could hinder and hamper business prospects of the organization. The financial advantages that organization seek while conducting business in nations with comparatively lax worker laws and several perceived legislative loopholes could outweigh their ethical issues. Excuses are not compromised by justice departments under FCPA. American associate of justice elaborates: congress will not take “cost of processing business” abroad, neither proper way that edge out the competition in the global market. However, nations taking the risk have to face federal lawsuits as ultimate consequences. The foreign corrupt practices act strictly informs the corporations that if they are not finding ways to conduct the operation of business legally than it must not conduct its businesses at or there will be fines alleged for violation of FCPA, real examples includes the case of Siemens, Hewlett-Packard and Goodyear (Perlman & Sykes, 2018).
Figure 1: Corruption Decision-making Model
(Source: Bruijl, 2017)
Torsello & Venard (2016) says that difficulty of structuring anti-corruption commitment lies broadly on describing and identifying transactions that are proscribed- evolving a workable mental model what is not and what is accepted. Rothstein & Tannenberg (2015) adds that connotation of word “corruption and bribery” includes common idea of unethical and illegal transfer or transaction of resources towards developing benefited norm for conducting business for moving forwards to operational description than general characteristics. The author proposes that challenge of devaluating operational description of corruptions could take the organization into “grey areas” in which boundary between wrong and right are difficult to draw clearly.
Key to Model
Passive corruption- A circumstances where decision-maker seems to have not any plan or intention, but approaches for corrupt or bribery act (Toth, 2014). This could befall under-response of two kind-Type A and Type B.
Type A: Act or payment of corruption which critically affects “basic human rights, issues or environment of sustainable development”. Universal Declaration by UNs of human rights could be used as a checklist to defining rights that could be violated. Similarly, a checklist of problems focusing on sustainable and environmental development could be made (Monea, 2016). Another list could be made focusing on peculiar concerns to stakeholders groups relevant to the company.
Type B: Activity of corruption and payments would not affect “basic human rights, issues of the environment or sustainable development”.
Active corruption- A circumstances in which decision-makers insinuates, design, creates a condition for paying a bribe or start corruption act. The response must always conclude to “No.”
Corrupt transactions- It covers all kinds of transactions that mainly not monetary bribes but are desired to dispense functions, discretion or favours mater of quid pro quo. Classification under Type B and Type A would determine “Yes” or “NO” response.
Facilitating payments- It includes the payments demanded by corrupt person and system for dispensing individual discretionary powers (Langseth, 2016). This could include petty demands of payments by low-level functionaries in public offices. Facilitated payments must be investigated against criteria noted under Type B and Type payments where Type A is classified as answer “NO” and Type B as “Yes.”
Extortion- It indicates payment and activity that is undertaken to grave compulsion where lives of organization personnel are in danger or at risk. This may cause a threat to business organizations property and effective functioning of business when rules and regulation or laws fail to be capable of facilitating protection.
Yes,*- Directs conditional ‘Yes’, that implies payments that be made only if payments are unavoidable under presented situations concluding to Type B payments. Yes, word implies that stakeholder’s conscious global company will support corruption and anti-bribery initiative of NGO’s and International departments/body (Bruijl, 2017). Under which they could take sincere attempts at bringing systematic changes. This concept is common in deal with negative side-effect under “principle of double effect.”
No- Work ‘No’ indicates no answer to form of payments and active corruption of Type A.
According to Said et al. 2015 changing economic and political environments around the worked have let to increase of concern for fraudulent activities. Frauds not only includes moral problems but also barriers for nations prosperity by distorting people policies, undermine better governance, hurting economic development and leading to misallocation of current resources. Doig, 2013 adds that for reducing these consequences, accountability issues have been raised in organizations to put corporate integrity system inadequate places to develop accountability outcome. Said & Omar, 2014 argues that accountability may avert abuse and frauds of power, where commitment from legislative or governments essential for accountability of mechanisms that amplifies ethical activities and confirms implementation of an adequate process consisting openness to scrutiny and documentation. In competing with integrality, the author De George; Werhane (2015) has worked on five themes. One of it indicates that unethical and ethical behaviors of organizations are because of individual managers and individual’s attitudes as they are only involve in an unethical manner and not corporation itself. Cuervo-Cazurra, (2016) argues that ethical problems in global business would occur at several levels like on individual level, other organization and corporate or national level or internationally where every issue must be examined in appropriate context. Ethical issue at any level in business could be dealt with unless strong institutional background called “rule of law” be constraint for unethical attitudes towards effectively promoting fair competition, the balanced economic power of corporate with the strong global organization and government body. Werhane (2015) studies that some leeway for actions in some nations could be provided as they develop free-market structure and other case where no wrong could be tolerated, indicating to an example where American organization are prohibited from extortion and bribery legally and morally. But in the case of Russia, bribery is part of the business process, and it becomes difficult for Russian businesspersons to survive in the marketplace without paying a bribe or replying to extortion for successful business operation. Accountability in context could amplify the efficiency of budgeting, management, politics and innovation in public sector companies especially in Australian business firms increasing democracy, service and openness efficiency.
Commercial bribery significantly takes place in private sector organization including the passing of payments to staffs or another agent in favours of some special treatments. Boles (2014) adds that bribers ‘ buy influence’ in the commercial sector and bribe agents under violating their principle of trust for their gain. Both individuals gather common economic incentives from participation in bribery arrangements. Rendleman (2017) argues that these parties mainly transpires commercial transition in which individual company forms secret payments to staffs of other organization for that staff’s personal profit and staffs in return directs operations of the business to bribing organization and to the exclusion of another company. Research article provides information that this kind of arrangements concludes with bribing organization obtaining business contact with Staffs Company. Ross (2017) adds that Commentators and courts have opined such arrangements are seen commonplace and are rampant in several industry segments. Business bribery causes economic harm to staffs. Buyer’s payments to suppliers for the product could skyrocket over products fair market price.
Ethical activities are a critical method of sustainability and are an important process towards eliminating corruption because it is illegal and distorts the free market and fair competition. Kötter (2014) opinionated that bribery in context to corruption hinders economic and social growth delaying the emergence of growing economy and process thriving democracy based on better governance and rule of legislative. UN Convention against Corruption, Bribery Convention OECD and business organizations are participating in voluntary initiatives like extractive Industry Transparency and Global Compact initiatives towards eliminating situations of corruption and having sustainable growth of business in the economy of the country. National legislative as 1998 US Foreign Corrupt Practice Act along with the UK Bribery Act 2010, punishes the act of corruption regardless of place in occurs in the world (O’Connell, 2015).
Conclusion
It can be significantly concluded from the study that act of Bribery give rise to corruption in countries worldwide ultimately affecting the growth of business and its sustainability. Tough commercial bribery is prevalent in organizations it is often informed affecting society where people suffer unreasonable hikes in product market prices. To avoid certain situations, jurisdiction must not turn a blind eye to bribery permitting acceptance it in business practices. Australian states must unify anti-commercial bribery government responses for setting a proper level of felony punishments and deter private bodies from engaging in crimes.
Reference List
Atan, R., Alam, M. M., & Said, J. (2017). Practices of corporate integrity and accountability of non-profit organizations in Malaysia. International Journal of Social Economics, 44(12), 2271-2286.
Boles, J. (2014). Examining the Lax Treatment of Commercial Bribery in the U nited S tates: A Prescription for Reform. American Business Law Journal, 51(1), 119-174.
Bruijl, G. H. T. (2017). Blue Ocean Versus Competitive Strategy: A Systematic Approach for an Afghan NGO.
Cuervo-Cazurra, A. (2016). Corruption in international business. Journal of World Business, 51(1), 35-49.
Doig, A. (2013). Fraud. Willan.
Donchev, D., & Ujhelyi, G. (2014). What do corruption indices measure?. Economics & Politics, 26(2), 309-331.
Giorgini, V., Mecca, J. T., Gibson, C., Medeiros, K., Mumford, M. D., Connelly, S., & Devenport, L. D. (2015). Researcher perceptions of ethical guidelines and codes of conduct. Accountability in research, 22(3), 123-138.
Kötter, M. J. (2014). The common man vs. corruption or the globalized new middle class vs. the political? (Doctoral dissertation, uniwien).
Langseth, P. (2016). Measuring corruption. In Measuring corruption (pp. 23-60). Routledge.
Monea, A. P. (2016). Numerical Mediation and American Governmentality.
O’Connell, D. (2015). The UK Bribery Act: Challenges and opportunities for Australian business. Governance Directions, 67(5), 311.
Park, S. K. (2014). Targeted social transparency as global corporate strategy. Nw. J. Int’l L. & Bus., 35, 87.
Perlman, R. L., & Sykes, A. O. (2018). The Political Economy of the Foreign Corrupt Practices Act: An Exploratory Analysis. Journal of Legal Analysis, 9(2), 153-182.
Rendleman, D. (2017). Commercial Bribery: Choice and Measurement Within a Remedies Smorgasbord. Wash. & Lee L. Rev., 74, 369.
Ross, J. E. (2017). Undercover Populism. In Contemporary Organized Crime (pp. 231-251). Springer, Cham.
Rothstein, B., & Tannenberg, M. (2015). Making Development Work-The Quality of Government Approach.
Said, J., & Omar, N. (2014). Corporate Integrity System: Comparative Analysis of Two Giant Government Linked Companies. Procedia-Social and Behavioral Sciences, 145, 12-17.
Samson, D., Daft, R. L., & Donnet, T. (2017). Fundamentals of Management with Student Human Resource Management Access 12 Months. Cengage AU.
Torsello, D., & Venard, B. (2016). The anthropology of corruption. Journal of Management Inquiry, 25(1), 34-54.
Toth, M. (2014). A Few Remarks about Criminal Corruption in Hungary. JE-Eur. Crim. L., 77.
Werhane, P. H. (2015). Competing with integrity: Richard De George and the ethics of global business. Journal of Business Ethics, 127(4), 737-742.
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