Module 5- Part 2 - Bribery.docx - Module 5 Part 2 Bribery...

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Module 5: Part 2 - Bribery Introduction In this section, we will investigate a particularly troublesome (and frequently discussed) issue from the realm of international business ethics, namely the problem of bribery. Learning Objectives By the end of this part of the module, you should be able to: 1. Outline several major moral arguments against bribery. 2.Relate the problem of bribery to the notion of "loyal agency" discussed in Module 4.
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1. Bribes are an expense that all companies would like to avoid if they could. 2. Bribery on the part of one company can give that company a competitive edge. 3. The competitive edge gained through bribery outweighs the cost of the bribe itself. 4. There are no laws against bribery. (Or at least law does not enter into the decision; what we're interested in here is ethics.) Now, if neither company engage in bribery, the outcome will be pretty good for both, since neither will be at a competitive disadvantage in comparison to the other, and neither will be spending money on bribes. If both companies engage in bribery, the outcome will be pretty bad for both: neither will enjoy a competitive advantage over the other, and so both will be wasting whatever money is spent on bribes. But if Company A (for example) engages in bribery and Company B doesn't, Company A will gain a competitive advantage over B. B may even be driven out of business. This is the best outcome for A, and the worst outcome for B. Similarly, the case in which B engages in bribery and A doesn't will produce an outcome that is best for B and worst for A. Now, think of the situation faced by Company A. Company A can't (let us suppose) affect Company B's behaviour; it can only plan based on possible outcomes. If B chooses to engage in bribery, then A would be wise to as well. Otherwise, A will be at a competitive disadvantage and may be driven out of business. If B chooses not to engage in bribery, then, again, A would be wise to engage in bribery. For if A manages to
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