A Traveler's Guide to Gifts and Bribes

1828 Words Jan 30th, 2012 8 Pages
Financial Management Policy
Professor: Ms. Gleason
A Traveler's Guide to Gifts and Bribes
Harvard Business Review

Why might bribery become a problem for U.S. managers working in foreign countries?

The FCPA was structured to help U.S. companies understand what bribery is, and what is or is not acceptable behavior at home and in other countries. The confusing issue is that even with this guidance, it is not always clear what exactly is to be considered a bribe. Under the Act, not all payments are deemed to be bribes. FCPA doesn’t forbid payments to lesser figures, it allows bribes to facilitate ongoing business activities, as there is no monetary guideline it requires companies to keep reasonable records of the transaction. Brides given
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When the U.S. stood completely alone in its legislative quest to curtail foreign bribery, the catastrophic scenario did not materialize. “As the Government Accountability Office (GAO) noted four years after the implementation of the FCPA in a study called the Impact of the Foreign Corrupt Practices Act on U.S. Business; claims that U.S. companies have lost sales…are difficult, if not impossible, to substantiate and quantify” (Graham, 1984). Further, a paper published in the Journal of International Business used published data to test the competitive disadvantage theory and found that “the FCPA had not negatively affected the competitive position of American industry in the world marketplace” (Graham, 1984). Even then, when the American industry was the only one worldwide facing these kinds of restrictions, anti-bribery laws did not negatively impact their export performance or market share.
In today’s world, several markets where such an act may exist may provide a competitive disadvantage include those of China, the Middle East, Africa, and other emerging markets. This is in part due to the lack of similar laws in these markets and tradition based business practices where bribery, gratitude, or gift given is a norm. “Unfortunately, in the context of China, this has the potential to place American companies in a position where they must decide

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