In the world of business, every organization is facing the issues of bribe. Bribery is the act of either giving or receiving the things in the exchange of value for certain kind of influence or action in return, that the beneficiary would alter or not (Wrage, 2007).
In the business, bribery includes misuse of office assets by company officials, misappropriation of funds, and dishonesty in financial matters. It is not easily measured; that all levels are included individuals are unaware of it until it is caught or disclosed (Sanyal, 2005). Bribery in business is not at all as it impacts overall business, style of working and it changes the behavior pattern of the individuals towards work. Every individual seeks shortcuts while taking help of Bribery (Gordon & Miyake, 2004).
(Source: Shutterstock, 2018)
There will be a detailed discussion about the bribery and the impacts on the business and the way of preventing and the importance in which it covers, bribery is a necessary evil or not.
Bribery involves a promise, offer or the exchange of consideration directly or indirectly from the intermediate, to the public or private executive or for a mediator in order to restrain or act in exchange of consideration to obtain or retain business or other improper advantage in the conduct of international business (Baughn, Bodie, Buchanan & Bixby, 2010).
(Source: Chouglay, 2016)
Bribery leaves a huge dent in the Business due to which it is very difficult for a business to survive through the business cycle (Nichols, 2012). As all the business have the code of Ethics and as per, everyone has to abide by it.
It is the principle of guiding which is created to help the professionals in conducting business honestly and with integrity. Some sort of Safety standards is regulated by the laws which cover all kind of businesses. There is a set of rules and guidelines in compliance base code of ethics in which it also determines the penalties for violations. (Trevino & Nelson, 2016).
Specific laws govern business conduct in some industries which also include banking. The industries frames compliance based code of ethics to implement laws and regulation in the organization (Owram, 2004).Most of the companies usually arrange formal training for employees to understand the code of conduct because infringement of rule can generate the issue for the company such as legal issues as a whole and individuals may face the penalties for failing to pursue code of conduct.
It is important for every organization. Most of the organization has their code of conduct which has to be followed by every individual working in the organization; failing to pursue the guidelines by the individual can be consequences in termination or impose fine by the organization (Poitras, 2009).
Example- Kellogg Brown & Roots
The CEO Albert Jack Stanley of company Kellogg Brown & Root was found guilty under the FCPA, in the offense of paying hundreds of million dollars to Nigerian officials to protect the construction contract of the natural gas plant. The Kellogg Brown was amplified from a subsidiary of Halliburton. KBR is the leading company in the field of engineering andconstruction firm among others and also been associated to U.S. military contracts. Therefore, company has pleaded guilty in the case of bribery (THE ASSOCIATED PRESS, 2011)
(Source: POGO, 2018)
Bribery does leave a mark on the Business and its Goodwill. Below are a few points which will put more insight into it: –
Bribery may cause the loss of fund through skimming. The practice of bribery often results to lose the faith of customer on the organization which causes loss of customers by the organization. The company may force to increase the price of the products to recover lost resources through internal or external bribery. The competitive firm can also take advantage and can seize the opportunity which may cause a decline in market share for the affected organization. The company also has to pay penalties and fine for such offenses. In the case of Kellogg Brown & Roots, the CEO of the company was penalized $ 402 million as well as extra $177 million to the Security Exchange Commission.
The bribery report can also create a huge impact on the stakeholders and investors. The company can lose trust and confidence by the shareholders and investors which directly impacted on the amount of sale. Bribery can discourage investors to invest in business opportunities, internal or external. The bribery case of Kellogg Brown & Roots created a great impact on the shareholders and investors.
Goodwill is an asset which is intangible in nature that cannot be identified easily and represent invisible items that enhance the value of the company. It takes years to build a good Goodwill and reputation. Bribery in the firm can affect the image of the business organization negatively. The negative image of a company can be created in front of the customer that may cause loss of faith in the products and company. It may also result in loss of business partner and clients. To rebuild the reputation of the business organization, it can take years and win people’s trust again, if ever. The goodwill of Kellogg Brown & Roots was greatly affected in the market because of the activity was done by the CEO of the company which could also ruin the image of the company.
Bribery entails the inappropriate use of resources which is available and the efficiency of a business organization can be jeopardized. Resources that would be used in implementing important business are instead used in unproductive or unrelated functions. The fraud in the recruitment process may lead to the hiring of an incompetent employee, that may affect business efficiency and productivity suffers. Unethical practice in the business also creates inefficiency which may also result from employees who are demoralized (Baughn, Bodie, Buchanan & Bixby, 2010).
The Government has been taken certain steps to prevent unethical financial action in business. Various laws have been passed against unethical events which help in to raise the awareness of people about corporate bribery and discourage behavior of criminals. Therefore it is properly prosecuted, readily identified and reported (O’Shea, 2011).
Adopting practices, which is unethical such as bribery, is a matter of changing the thought of individual. It pollutes the perception of people towards business practices. The attitude while considering bribery be ‘a necessary evil, or ‘the way business done’ which become ingrained in people and is hard to eliminate (Labelle, 2014).
A whistleblower is a person who blows the whistle against wrongdoing activities within or outside the organization. The Whistleblower exposes the information or an activity which is deemed to be unethical, illegal things within or outside the organization that is either private or public. Wrongdoing activities include fraud, corruption, and violation of company policy, regulation, law, or threat to the public interest as well as national security (Cooper, 2010).
The four employees of company suits against Eli Lilly, for marketing of antipsychotic drug, the drug were rejected by the U.S. Food and Drug Administration. The company was continued the marketing of drugs which was not approved and even against dementia in the elderly which cause sleeps disorders and the company paid to higher authorities in a form of bribery to release the product in the market. The company admitted their illegal practices and was penalized under the lawsuit of government. In this case, the whistle-blowers were four former employees of the company (Compliance Culture, 2017).
(Source: Dreamstime, 2016)
First, people working in a business should have the broader mindset and every employee in the business should be aware of what all are the unethical practices and all employees should follow the code of conduct by which integrity could be maintained and employees are paid off for whatever the efforts they are putting into it. It is not a short-term activity which can be easily taught and can be embedded in the employees rather it is an on-going activity which requires patience, experience and right attitude towards the work, which will help the business to grow at faster pace and all the resources can be utilized properly (Luzkow, 2018).
1. Procedures Proportionate
There are certain procedures that should be followed for preventing bribery in the organization. It is proportionate to the size of the company, that involve anti-bribery training for staff, anti-bribery policy in the organization and rules of anti-bribery through which individuals must accept. The procedures and rules of anti-bribery involve:
The steps should be easily accessible, clear, practical and efficiently enforced and implemented across the organization.
2. Commitment at Superior Level
As all things is drive down from the Top management to all the levels. Seniors in the business should be an example so that others are motivated for the same and stringent actions should be taken against the defaulters. It should come under the zero-tolerance approach/policy. This will set an example towards other employees and they would be working with integrity.
Encouraging the employees to use of helpline of whistleblowing of the company promote the procedure of anti-bribery which help in preventing unethical behavior.
3. Assessment of Risk
Risk of bribery should be assessed and determine by the company that may be faced by them. Any member of the company help in receiving a bribe then that member is equally responsible
4. Due Diligence
It is the process in which proper investigation is done by the company of a person or business before signing a contract, or an act with a certain standard of care. Senior of the company needs to undertake researches to identify about the activities and appropriately responded.
5. Communication
The ability to communicate about the anti-corruption transparently to individuals represents strong ethics in the organization. The employee should know about the support of superior management in the case of any misconduct happening in the organization and to prevent bribery, the employee should feel confident to face the issues efficiently and effectively.
Proper training should be provided about the whistleblowing procedures to the staff. It makes ease for the employee to increase their ability to respond against bribery and can work in a more efficient manner.
6. Monitoring and Reviewing
Business should take random surveys or the Dip check with the employees to check the pulse of the business. Every business needs to review its steps/measures so that impact could be there and productive results could be delivered.
Conclusion
From above, it can be concluded that Bribery in the business is unethical, which should be avoided at any cost. All the employees should be aware of, what are the code of conduct and all of them adhere to it, to the core so that better and productive results can be taken out of it and resources could be utilized more efficiently and effectively. If employees are not aware of it they may be indulged in such activities which in turn impacts the goodwill of the company which is earned after the hard work of many years and if it is lost then it would take another couple of years to regain or rebuilt the goodwill, that does not give the assurance that customers will accept the same as they have done before.
Bribery can be at every level or all levels there is no limit to it and can be in any form which is hard to detect, only continuous monitoring and control can help the business to curb this Issue as this is not a short-term activity, it is a continuous process which needs to be monitored regularly so that impact could be maintained.
Monitoring should be done stringently at all levels and identity of the whistleblower should be kept unrevealed, business should encourage such practice in their work as it will give the transparency and confidence amongst the employees that hard work will be paid off eventually.
References
Baughn, C., Bodie, N. L., Buchanan, M. A., & Bixby, M. B. (2010). Bribery in international business transactions. Journal of Business Ethics, 92(1), 15-32.
Luzkow, J. L. (2018). Democracy Corrupted. In Monopoly Restored (pp. 13-53). Palgrave Macmillan, Cham.
Labelle, H. (2014). TOWARDS A CORRUPTION FREE CARIBBEAN: ETHICS, VALUES, TRUST AND MORALITY: Retrieved from: https://www.transparency.org/news/speech/towards_a_corruption_free_caribbean_ethics_values_trust_and_morality
Chouglay, R. (2016). Modern-day corruption: A primer. Retrieved from: https://globalriskinsights.com/2016/05/primer-on-modern-corruption/
Shutterstock. (2018). Bribery. Retrieved from: https://www.shutterstock.com/image-illustration/bribery-corruption-issues-concepts-tag-cloud-327302168
POGO. (2018). About KBR. Retrieved from: https://pogoblog.typepad.com/pogo/govcon-whistleblowers-3.html
Dreamstime. (2018). Eli Lilly and Company World Headquarters VI. Retrieved from: https://www.dreamstime.com/editorial-stock-image-indianapolis-circa-april-eli-lilly-company-world-headquarters-vi-makes-medicines-pharmaceuticals-image70002499
Baughn, C., Bodie, N. L., Buchanan, M. A., & Bixby, M. B. (2010). Bribery in international business transactions. Journal of Business Ethics, 92(1), 15-32.
Burton, L. (2015). The Effects of Bribery and Corruption in Businesses: Retrieved from: https://www.highspeedtraining.co.uk/hub/effects-corruption-bribery-business/
Compliance Culture. (2017). WHISTLEBLOWERS IN THE PHARMACEUTICAL INDUSTRY. Retrieved from: https://compliancecultureblog.com/2017/11/07/whistleblowers-in-the-pharmaceutical-industry/
Cooper, C. (2010). Extraordinary circumstances: The journey of a corporate whistleblower. New Jersey: John Wiley
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