Caselets: Bribery and Extortion in International

In: Business and Management

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Bribery and Extortion in International Business Case

1. Case 1 (payment to general’s Swiss bank account): Would you make the payment to the general’s Swiss bank account? Why or why not? You should discuss the relevant laws in your answer.

I would not make the 2 million dollar payment to the Swiss bank account of the general in charge of the ministry. First, this payment would be in direct violation of U.S. law, the foreign corrupt practices act (FCPA). This law forbids any payment by a company, its employees, or its agents directly or indirectly to a foreign government official or a foreign political party. Providing this payment is a bribe, this practice can lead to large fines and prison time and personally I don’t look good an orange jump suit. Secondly, this is an unethical practice and could damage the reputation of the company. It can also lead to a dysfunctional, inefficient and deleterious company culture within its own walls. From a pure risk based perspective, the risk out ways the reward significantly. The US company should find a “creative” legal approach to setting itself apart and securing this contract.

2. Case 2 (Speaker of the House): Would you hire the Speaker? Why or why not? You should discuss the relevant laws in your answer.

I would hire the local law firm with the Harvard trained nationals of this African county. Taking the advice of the other American companies would cause you to violate the FCPA since the House, in that country will need to approve your agreement. Of course hiring the Speaker of the House will give you a significant advantage in negotiations and House approval, however the FCPA is very explicit in stating that payments for the purpose of influencing government decisions to obtain business abroad is illegal. The local Harvard lawyers will have some very good insight on negotiation techniques so they should be…...

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