154 Part 2 The Cultural Environment of Global Markets Before the Enron, WorldCom, and Madoff scandals, to most Americans, the word corrup-tion meant bribery. Now in the domestic context, fraud has moved to the more prominent spot in the headlines.68 But high-profile foreign cases of bribery, such as those involving the German giant Siemens (which, in connection with its case, paid for 1.5 million bill-able attorney hours!) and the execution of China’s top food and drug official for accepting bribes, underscore the ethical and legal complexities of international business. During the 1970s, for U.S. companies engaged in international markets, bribery became a national issue with public disclosure of political payoffs to foreign recipients by U.S. firms. At the time, the United States had no laws against paying bribes in foreign countries. But for pub-licly held corporations, the Securities and Exchange Commission’s (SEC) rules required accurate public reporting of all expenditures. Because the payoffs were not properly dis-closed, many executives were faced with charges of violating SEC regulations. The issue took on proportions greater than that of nondisclosure because it focused national attention on the basic question of ethics. The business community’s defense was that payoffs were a way of life throughout the world: If you didn’t pay bribes, you didn’t do business. The decision to pay a bribe creates a major conflict between what is ethical and proper and what appears to be profitable and sometimes necessary for business. Many global competitors per-ceive payoffs as a necessary means to accomplish business goals. A major complaint of U.S. businesses was that other countries did not have legislation as restrictive as does the United States. The U.S. advocacy of global antibribery laws has led to a series of accords by the member nations of the Organization for Economic Cooperation and Development (OECD), the Organization of American States (OAS), and the United Nations Convention against Cor-ruption (UNCAC). Long considered almost a way of business life, bribery and other forms of corruption are now being increasingly criminalized and the enforcement gap between the United States and the rest of the world gratefully seems to be shrinking.69 The United King-dom, Brazil, and Canada have all enacted their own antibribery laws in recent years. China is cutting executive pay and perks at state-owned firms in an effort to reduce corruption.70 Leaders around the world realize that democracy depends on the confidence the people have in the integrity of their government and that corruption undermines economic liberal-ization. The actions of the OAS, OECD, and UNCAC will obligate a majority of the world’s trading nations to maintain a higher standard of ethical behavior than has existed before. HOME-GROWN BUSINESS? As the global economy slowed and China’s exports slumped, Beijing cut sales taxes on car and real-estate purchases in certain situations, in hopes of revving up its own consumer engine. At right, a man and woman took a break outside a shop selling Barbie dolls in October. Apparently blonde Barbie doesn’t appear to corrupt kids in China! The Western Focus on Bribery 68Robert J. Rhee, “The Madoff Scandal, Market Regulatory Failure and the Business Education of Lawyers,” Journal of Corporation Law 35, no. 2 (2010), pp. 363 – 92; perhaps the best book on this topic is Naomi Klein’s Shock Doctrine (New York: Picador, 2007); also see “Bill Moyers: 6 Movies You Have to See About the Financial Crisis,” AlterNet.org, February 2, 2012. 69 Ben DiPietro, “Global Bribe Focus Hardens,” The Wall Street Journal, August 14, B5, 2014. 70 Lingling Wei and Bob Davis, “China to Cut Top Pay at State Firms,” The Wall Street Journal, October 27, 2014, pp. B1, B2.
Cateora_InternationalMarketing_17e
To see the actual publication please follow the link above