Question

"Bob, a representative at Company XYZ, headquartered in the USA has been tasked with helping XYZ expand abroad to capitalize on the emerging economies. However, bribery, kickbacks and corruption are commonplace. Bob has been told numerous times that to be successful he should expect to pay such necessary fees. “When in Rome do as the Romans” has been echoed to him."

What would you do if you were Bob?

Outline the issues at hand.

Answer 1

Companies have to make some tough choices when they wish to expand their operations in countries where bribery and corruption are commonly practiced. The generally held belief is that " When in Rome do as the Romans" i.e. if company has to bribe government officials to get its work done then it must do so. Bob, an executive in a company is faced with a similar position as the company he works for is planning to expand its operations in another country.

If a person is faced with the same situation as Bob, the best way to deal with it is not to pay or bribe government officials. This may slow down or completely halt the expansion plan but holding on to this position will be beneficial to the company in the long term. If corruption is encouraged in the initial stage, then even in the future the company will have to pay bribe to get the work done. This may erode the company's revenue and also bring negative public opinion about the firm for encouraging corruption. To enter the market, the firm may consider to have a joint venture with an existing firm in the country. The issues at hand is outlined as follows

• Moral and social responsibility.
• Ethical considerations
• Reputation of the firm
• Profitability of the firm