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Bribery or facilitation - that is the question?

IN developing countries where poorly paid government officials have substantial administrative power, the rapid rise of cash rich entrepreneurs and the influx of foreign companies wanting to set up operations stimulates corruption and black markets.

There are of course different types and scales of corruption, but a familiar situation for many expatriate managers is the requirement to pay off minor, and sometimes higher level officials, in order to acquire licences or permits or continuing permission to operate a business. Is such payment a bribe or a commission to facilitate the business process?

The typical Australian manager operating at home would see such a demand from a local official as bribery.

However, in a developing country context they can rationalise their action in making these payments by claiming the culture of the country accepts such payments and therefore they could be seen as an upfront commission for services to be rendered rather than as a bribe.

There is no doubt that different cultures have different values and such rationalisation is not unwarranted. The Western world-view is not the only one even though the research conducted on ethics has been largely grounded in a Western perspective.

The payment decision is often seen as a case of “when in Rome do as the Romans do”, or, better still, “get the Romans to deal with the Romans on your behalf” - everyone does it, so why should I worry!

But, what are the implications of compromising on your home country ethical standards when operating internationally - and you do compromise whether you pay yourself or get a local to do it for you?

A company code of ethics is no real protection or guide to the expatriate manager on the ground who is faced with the personal choice of paying or not getting results.

The main implication is that if you pay once then you will have no excuse not to pay again. Another is that you will have implicitly accepted that bribery is the norm for doing business in that country.



To satisfy the nagging conscience it is important to consider a few key questions when bribery becomes necessary if you want to do business in developing countries.

Could I defend my action publicly in the face of criticism?

Would what I have done be supported by the company and by family and friends?

Would I consider that what I have been asked to pay is fair in the circumstances?

Can I accommodate this practice and still maintain my basic ethical integrity?

If the answer to one or more of these questions is “no” then you should think seriously about working in developing countries.

In a sense, the approach inherent in the questions suggests a path of constructive compromise which oper-ates in the middle ground between your values and those applying to the officials with whom you deal.

n Professor Roger Smith is from the Graduate School of Management, UWA, mail: rsmith@ecel.uwa.edu.au

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