Corruption in Business

The practice of manufacturers' payments of fees to retailers for the display and sale of their products has become a common practice. In the grocery retail business, the fees paid by manufacturers are called slotting fees, or a payment made for a slot on the shelf. The same practice is used now in the retail book industry. Large book chains command high fees from publishers for the prominent display of books. Entrepreneur's products are often precluded from stores and markets because (...) slotting fees are prohibitive. The fees are non-uniform and often paid in cash, creating an atmosphere that has already spawned illegal activity on the part of retail executives. This article examines the ethics of slotting fees. (shrink)

As a response to Diane Vaughan’s controversial work on the NASA Challenger Disaster, this article opposes the conclusion that NASA’s decision to launch the space shuttle was an inevitable outcome of techno-bureaucratic culture and risky technology. Instead, the argument developed in this article is that NASA did not prioritize safety, both in their selection of shuttle-parts and their decision to launch under sub-optimal weather conditions. This article further suggests that the “mistake” language employed by Vaughan and others is inappropriate insofar (...) as it obscures the responsibility of individuals within the organization and trivializes the loss of life and severity of the disaster. Contra to the conclusions of Vaughan’s casework, this article reveals various ethical transgressions on the side of NASA and its affiliates; from its decision to use poorly designed O-rings, to withholding crucial engineering assessments from the shuttle-crew, this article points out that NASA did not succumb to a pre-destined fate, but, rather, created its own. (shrink)

Over the past decade, we have witnessed some early signs of progress in the battle against international bribery and corruption, a problem that throughout the history of commerce had previously been ignored. We present a model that we then use to assess progress in reducing bribery. The model components include both hard law and soft law legislation components and enforcement and compliance components. We begin by summarizing the literature that convincingly argues that bribery is an immoral and unethical practice and (...) that the economic harm it causes falls most heavily on those least able to absorb it. The next section summarizes the main provisions of anti-bribery legislation including the Foreign Corrupt Practices Act (FCPA), the Organization for Eco nomic Development's Convention on Combating Bribery of Foreign Officials in International Business Transactions, the United Nations Convention Against Corruption and the laws of selected countries. We conclude this section with a discussion of the "moral imperialism" argument for not imposing Western laws and values on other cultures. The next section focuses on the roles played by NGOs including Transparency International (TI), the World Economic Forum (WEF), and the International Chamber of Commerce. We review trends in enforcement and prosecution, including a review of the United States' enforcement processes, mechanisms for cross-border legal assistance, a discussion of the distinctive nature of FCPA cases, and an assessment of what the future holds for enforcement. The final section focuses on compliance processes for corporations aimed at reducing the risk of FCPA and related violations. This section also addresses the ethics of gift giving and "grease" payments. The article concludes with a summary and suggestions for further research. Throughout the article, we reference important bribery cases and include comments from several authorities who are on the front lines of the battle against international bribery. (shrink)

Although most cultures have held honorableness to be a virtue of the first importance, contemporary analytic ethicists have just begun to consider honor’s nature and ethical worth. In this essay, I provide an analysis of the honor ethos and apply it to business ethics. Applying honor to business may appear to be a particularly challenging task, since (for reasons I discuss) honor has traditionally been seen as incompatible with commerce. Nonetheless, I argue here that two of the central virtues of (...) the honor ethos—competiveness and magnificence—are perfectly apt ones for rich business executives, who plausibly can be expected to work more for prestige and the thrill of competition than for wealth itself. In addition to making top executives more honorable people, the virtues of competitiveness and magnificence would have positive social effects: honorable competitiveness would intrinsically dispose executives to shun anti-competitive practices, and magnificence would encourage tycoons to redistribute their fortunes voluntarily through philanthropy. (shrink)

International business enterprises face a number of ethical issues when conducting business in unfamiliar parts of the world, especially in places wherecorruption is deeply rooted. This is the situation in Latin America - a highly heterogeneous region characterized by cultural complexity, inconsistencies, andcontradictions at multiple levels of society, with implications for business ethics that are potentially as troubling to outsiders as they are opaque.We briefly indicate the relevant academic literature on this subject, noting that studies of business ethics in Latin (...) America are surprisingly sparse, fragmented, and uneven in comparison with the abundance of published research on business ethics and values in other world regions. Given the importance of Latin American markets, production capacity, raw materials, and economic growth, we identify this situation as a challenge and opportunity for business ethics researchers. Examination of these issues contributes new information and insight into the realities of doing business in emerging market countries and is critical on a theoretical as well as a practical level. (shrink)

This study examines attitudes toward bribery in international business and whether such attitudes differ between men and women. Results of surveys of adults studying for careers in international business indicate ambivalent and nuanced attitudes over bribe giving/taking with significant differences by sex with respect to specific hypothetical situations, suggesting a gender gap on matters of bribery. It is recommended that academic curriculum and management development programs stress ethics and legality and focus on the Foreign Corrupt Practices Act and similar antibribery (...) laws so that aspiring managers are properly trained to recognize and manage the challenges prevalent in conducting business internationally. (shrink)

This case study examines the failure of top management at Putnam to exercise ethical behavior in the face of their clear knowledge of corruption in the company. Market timing by employees was expressly forbidden by Putnam. Six employees, including two portfolio managers, repeatedly engaged in market timing activities from 1998 to 2003, garnering over a million dollars in personal profit. The CEO and key senior executives had factual knowledge of the abuses. Management failed to stop the abuses or to discipline (...) those involved until faced with charges from government regulators. By failing to do so, top management breached ethical duties to its shareholders and inflicted serious damage on the organization. The end results of top management's failure to address ethical violations were significant outflow of assets from Putnam's funds, payment of penalties, and loss of trust among investors. This case raises awareness about ethical issues surrounding mutual fund trading practices and the impact that top management can have on the ethical behavior of employees. (shrink)

Factor Affecting Customer Service in Supply Chain Management of Small and Medium Enterprises: An Empirical Study of Jammu Region -/- Author / Authors : Sanjeev Lalhotra and Prof. B.C Sharma Page no.149-165 Discipline : Applied Economics/ Management/ Commerce Script/language : Roman/English Category : Research paper Keywords: Customer services, Supply Chain Management, Small and Medium Enterprises.

This article presents the results of the longitudinal study of Addiopizzo, a successful anti-bribery organization founded in Sicily in 2004. It analyzes how this organization has used information disclosure as a strategy to fight adverse environmental conditions and the immoral activities of the Sicilian Mafia. This article extends the business ethics and corporate social responsibility literature by showing how multi-level strategic information disclosure processes can help gain organizational legitimacy in adverse social environments and successfully fight against social resistance to change, (...) low levels of moral imagination and attacks from criminal organizations. This article provides an additional contribution to the literature by linking the three research streams on corporate transparency, the fight against corruption, and organizational legitimacy. The results of this research also contribute to the special issue of the EBEN AC 2010, “Which values for which organizations”, since it provides a unique example of an organization capable of spreading the values of social justice and honesty in a difficult social environment plagued by Mafia. (shrink)