Bribery In International Marketing Marketing Essay

boonry In International Marketing Marketing EssayBribery and putrescence is a way of life in some(prenominal) countries and these practices affect the way international stock is regularly conducted. However, in most of these countries, it is il juristic to offer or receive bribes or engage in befog practices. Yet these corrupt practices atomic number 18 a part of the culture or popular way of doing businesses. Unless companies line up to such practices, in umteen cases, international business can non be transacted.This experiment will try to domiciliate watchword just roughly graft and corruption in international trade, with examples from very different situation of status in according to the principal honourable system, despite whatever religious, realistic and nature. Analyses of the case of Siemens transplant scandal relate to ethical productions will be investigated.Bribery is an weighty issue of concern for many companies. Confrontation of transplan t vary across many countries, but everyone has a different concept about it, such as in Hong Kong and Greece, here, animal trainers atomic number 18 less critical of graft in certain situations than that of the Americas. buckle undering(a) transplant carries with it a great risk to damaging the companys standing with the artless which the briberies are paid, and at base too. Moreover, in that location is also the risk that the commercial culture of the company will last more open-minded of several(prenominal) of otherwise practices at the legal issues. There is also evidence to suggest that those countries with the reputation for transplant and corruption damage themselves, as it reflects in their economical growth, has a low rates for spirited take aim of corruption, like that of Nigeria.It is true to say that bribery in international markets can lead to astonishment,bewilderment and misconceive for expatriates, at devil placemental and someoneal levels. This es say examines bribery from two point of realizes and tries todevelop procedures to bridge them. The first viewpoint is relativist, accepting thatdifferent cultures pass water different ethical set and not imposing an expatriatesvalues onto other culture. The second viewpoint is universalist, averring that moral philosophy apply anywhere in the world, and is establish on psychological and economicgrounds. To resolve these two approaches, it is suggested that trying to understandthe heathenish forces that fix kinsperson and overseas statuss to the many formsof bribery, this is a first step to adjustment. The following step is the development of aworld(a) or regional enactment of conduct that tout ensembleows flexibility inside a gray zone. Theresult could be an evolving code that adapts to the many dimensions of bribery foreach bucolics situation, in a manner that is a dialogue between the cultural,psychological and economic values of an expatriates organisation and of lo calofficials.IntroductionInternational trade is complex as distant environments are differentfrom home environments, as they differ on physical, cultural, legalpolitical,economic, competitive and distributive dimensions (Ball and McCulloch1996). Due to these environments, marketers can adapt split of the marketmix for each overseas country or region (Hoang 1997), for example, a company cleverness alter its packaging, distribution channels and advertisements in each of itsinternational markets.These marketing mix issues are not the only ones facing international marketers.Cultural management issues are important too, and bribery is the most important ofthese, at least for Australian and US marketing managers (Armstrong et al. 1990).For example, should a debauched pay a customs duty official to process a shipment throughnormal channels? Should a firm pay education expenses in its home country forthe child of a prince in an overseas country that the firm wants to enter? Shouldpa yments to distributors be paid into two separate accounts when one isapparently illegal? Should funds in the public traffic budget be paid to indivi triplewho appears to do nothing for public relations other than being related to someonein power? Issues like these are important to someone from a culture where theseactivities are unusual.1937Nevertheless, little research has been done on the morality of international marketing(Armstrong and Sweeney 1994), and interest in ethical issues in general has beenmainly empirical (Donaldson 1989). Moreover, levels of corruption vary widearound the world, as seen in a survey of 52 countries by TransparencyInternational (1997). Furthermore, the issue of bribery in circumstance is oftenconsidered within only one of the six different environments above, and bribery is sometimes discussed in the legal environment chapter of a textbook forexample, Keegan and Green 1997), where the military issue of the unite States contradictoryCorrupt Pract ices Act (FCPA) on that countrys ability to compete with Europe ininternational markets is covered (Graham 1984). Alternatively, bribery issometimes in the public relations part of a textbook (Phillips Dooleand Lowe 1994), where it is discussed along with concern about corporatecitizenship and employee safety. In concomitant to this, bribery can be considered as a separate,ethical issue, usually based on cultural issues (Donaldson 1996).However, the aim of this essay is to consider bribery from across severalenvironments such as legal, cultural, economic and competitive, in order todevelop a managerial approach to the issue. division is an integrated andup-to-date review of these several viewpoints in a form that internationalmarketing managers baron find useful. As well as, the review is from a non-USview, while several other papers confine a US view that is different from otherdeveloped countries (Donaldson 1996 Mayo 1992 Across the Board 1993). It is think that managers can develop a code of conduct for the several dimensionsof bribery that bridges the relativist and universalist views.This essay has four-spot main sections. Firstly, bribery in maturation countries islooked at from a Hesperian view point that aims toshow the roots of bribery may becommon to both. This leads into a cultural, relativist view of bribery, whichsuggests that bribery is appropriate if it is normal in the culture of an overseascountry. However, counter arguments to this relativist view are then presented,including psychological and economic arguments. Finally, facing these twocontrasting military capabilitys, the essay considers how management could handle bribery.In this essay, bribery is defined broadly bribery is offering, or promising to pay,anything of value to diverge an act or decision by officials in a foreign governing body, including politicians, a political party or a bureaucrat to assist inobtaining, retaining, or directing business to any person (based on th e FCPAsdefinition). This definition does not cover issues such as human rights or child labor use, sexual harassment or industrial espionage. Ourdefinition of dealing with officials about business matters is the one of studyconcern to marketing managers in particular.1938Four Roots of BriberyFrom a western sandwich point of view, bribery sometimes appears to be caused merely by thegreed of locals, peculiarly poor locals. however bribery has four, more complex rootswhich appear to exist in both Western and developing countries.Firstly, a bribe can be scarcely linked to a jazz to insure promptness at a restaurant, just asa restaurant kitchen can sometimes have inefficient processes that require humaninvolvement to overcome, so can the bureaucracy of a developing country. Bribesmay be seen to be a way of purchasing government services when a governmentcannot afford to provide salaries that are adequate for the service to be providedfree to every person (Tullock 1996). Thus, briber y may be a form of privatisationthat makes the wealthy who can afford it, pay for a service. Indeed, the comparativelyhigh-principled FCPA that tries to limit the involvement of US firms in bribery,actually permits payments to officials to do their normal duties while disallowingpayments to superior officials for special favors. A prime example is a US businessperson can bribe a customs officer to expedite an inspection but not to skip italtogether. However, the next triple roots of bribery may not be allowed by the FCPA.Secondly, a bribe can be considered to be a normal promotion activity. Such as that ofBMW cars are provided free to family members of politicians in Westerncountries for the spillover effect on the prestige of the car. If the wife of thePremier of Victoria, Australia has free use of a BMW, why cannot officials inoverseas countries who are close to real power also be given benefactions to helppromotion. Similarly, many Western companies provide corporate hospitali tyat sporting venues such as at the Ascot, Henley and Wimbledon in the name ofpromotion (Ramsay 1990). Therefore, how is this kind of promotion different from some bribery indeveloping countries?This leads to the triplet root of bribery, which is related to the general idea ofgifts to show respect and gratitude to a person in a descent, at certain times.Gift giving is common at Christmas time in Western countries, and gift giving atbirthday and holidays may serve the same purpose in overseas countries (Onkvistand Shaw 1997). As interactions between buyers and sellers proceed, a cordialrelationship is developed that can be enriched by gift giving. accessible relationshipsare often characterised by the exchange of gifts and hospitality as trust developsbetween the parties. In desire to build relationships of trust, the exchange ofgifts may be seen as an entirely appropriate act of social bonding. (Wood 1995,p. 11). This interchangeable gift and favor giving is more important in some Asiancountries than in the West, simply because of their cultural values (Hofstede 1991, p.169).Finally, in food and other markets in developing markets, the occasionalexpatriate customers are usually asked to pay more than locals because thestallholder have a go at its that his or her usual outlay is usually a far petty(a) proportion ofthe discretionary spending of an expatriate than that of a local. A dual price system1939reflects the dual economies that exist in many developing countries and do notexist to the same extent in western countries. That is, a poorly paid overseasofficial with an extended family living in his small house may consider itreasonable to ask a wealthy foreign business person staying at a five star hotel topay more than the usual low prices for labor and other services in his or hercountry.Thus a bribe may be seen to improve lawfulness just as a progressive taxation systemaims to do in developed countries. The injustice without bribes in a develop ingcountry may be even greater than in a market or a taxation system of a developedcountry, because the official will have high local power from theirimmediate and extended family, friends and political party despite having low financial wealth. In contrast to this , the foreign business person has lower power despitehaving higher pecuniary wealth. That is, bribery may not violate the Christian butsometimes be considered to be a universal doctrine of love you neighbor like yourself,but actually affirm it (contra Coady in way of life 1996, p. 19).Overall in instruct then, bribery is seen to exist and has roots that exist in both a Western and an overseascountries.Cultural View of BriberyImplicit in the discussion above is a relativist, cultural understanding of bribery that what is right or wrong, good or bad, depends on ones culture. However, thisargument implies that there are no golden rules underlying most human behavior(Way 1996, p. 19), that is, ones own culture is the study influence on viewsabout bribery. This concept of culture therefore deserves to be explored further.Culture has five dimensions the relationship between the individual and thecollective group, power differentials within society, masculinity and femininity,dealing with uncertainty and Confucian vim (Hofstede 1991). Several ofthese dimensions strongly influence views about bribery. The first dimension of individuality/collectivism would appear to be the most related to bribery (Tanzi1995 in Onkvist and Shaw 1997, p. 175). Developing countries are morecollective than developed countries, that is, officials indicate greater emphasis ontheir responsibilities to their own extended families and friends, than do Westernbusiness people.However individualism/collectivism is not the only cultural dimension affectingbribery. Developing countries are often high on the second culture dimension ofpower distance, that is, individual officials with which marketingmanagers deal have major obligatio ns to their supervisors. Thus, the officials willsupport a bribery culture if it is related to power as some of the four roots ofculture above were shown to be, and especially so if their own superiors acceptand foster bribery. In addition to this, some Asian countries are more concerned with1940virtuous behavior than the snarf truth (which is related to the dimension ofConfucian dynamism). An officials actual behavior toward his or her immediateand extended family, and toward friends and superiors is more important thanabstract universal values applying to all humans, to which some Westernerscling (Hofstede 1991). Onkvist and Shaw (1997, p. 175) appropriately sum upthis relativist, cultural view of bribery the concept of arms-length relationships would seem strange and alien.It would even seem immoral. The idea that, economically speaking, oneshould treat relatives and friends in the same way as strangers wouldappear bizarre.In brief, a cultural view of bribery initially suggests that expatriate marketingmanagers should simply fit in with local bribery practices wherever he or shegoes. However, the cultural relativism approach to bribery developed above cannot bethe basis for a marketing managers approach to bribery, because awareness ofcultural differences is only the starting point for international cooperation. Thatis, a marketing manager cannot completely adapt to a different culture and deal inbribes with no regard for his or her own cultural values, for an appreciation ofanothers culture does not mean forgoing ones own culture. Successfulintercultural encounters presuppose that the partners believe in their own values.If not, they have become alienated persons, lacking a sense of identity operator (Hofstede1991, p. 237). To handle the issue of bribery comprehensively for a real worldindividuals involved in business, managers motive to consider issues other than culturaldifferences per se, and we turn to these relatively universalist issues next. eco nomic and Managerial Issues of BriberyEconomic advantages of bribery for the receiving official and for the companythat receives preferential treatment ahead of its competitors, are obvious.However, there are economic disadvantages for both the taking and the givingcountry.First, bribery can send incorrect signals about demand price and supply salute in amarket economy. More directly, bribery adds to the cost of contracts and goods roughlyby five percent in Asia (Kraar 1995), this could perhaps be even more in some instances.Secondly, it distorts the decision-making processes too. When contractors are selectedon the basis of what the decision-maker will receive personally rather than thecontractors ability to do the best, lowest cost job, then the whole economy suffersmisallocation of resources. This form of bribery was perhaps a major influence inthe recent meltdown of some Asian currencies. Thirdly, bribery can lead toindustrial standards being dropped with social and economic re percussions uponthe firm. For example, workers may work in substandard conditions that mayimpair productivity, people may interrupt in buildings that collapse due to buildingstandards inappropriate, and the environment and firms future may be hurt byover-zealous timber-felling.1941Moreover, there are other disadvantages of bribery that are particularly importantfor the giving country. Firstly, home and foreign customers help pay foruneconomic spending in bribes, often for the enrichment of a few overseasindividuals who become more wealthy than ordinary citizens of the givingcountry. In 1995, bribery cost businesses almost $45 trillion worldwide(Kaltnhauser 1996). Secondly, bribery could be used against the givingorganisation, in the case of managers returning to the home country and rejoiningthe salesforce at home could accept bribes for practices that the givingorganisation does not want done at home. That is, a relativist position that allowsa match between expatriate individuals and the corrupt organisations overseas,may also foster at home the separation of personal and organisational moralstandards, with consequences at home that the organisation does not want.In brief then, bribery has economic and social disadvantages that a purely culturalunderstanding leading to a relativist attitude to it, may hide.How Can Managers Handle Bribery in a Competitive Market? tending(p) the two contrasting views about bribery above, what can managers in anon-US company do to bridge the gaolbreak between a relativist and a universalistapproach to ethics. The practices and what managers in a US firm do is clear, they obey the FCPA or get around it by channeling funds through an agent whothen handles the bribery behind a screen. Some managers might try to offset acompetitors bribe with a better, come in product You might offer a lower price, abetter product, better distribution or better advertising to offset the benefit of thebribe to the decision influencer (Keegan 198 9, p. 201).This US position is an idealist position that many non-US managers may notadopt, for it assumes that the better, total product will win the contract, when infact, bribery occurs to oft successfully ensure that it does not. Moreover,competing firms from European countries and Australia are allowed to treat bribesas a tax-deductible business expense, reducing the after-tax effect of the bribe. InApril 1996, the OECD passed a resolution saying bribes should not be taxdeductibleand in 1993, Transparency International, a not-for-profit organisationwith chapters in 40 countries, tried to increase awareness of briberysexistence, but anti-foreign bribery legislation outside the United States does notyet exist.Moreover, one is never sure of the level of bribes that competitors are offering fora project, and so deciding on how much to improve the total product to fightbribery is difficult. In addition, bribery is sometimes paid for day-to-dayoperations as well as a project, and so discussion of a better, total product may beof limited usefulness. For instance, if bribes are not paid by an individual firm, it mayexperience bureaucratic delays on wharves and in warehouses and its goods may1942be stolen, while its bribe-paying competitors do not experience these costlyproblems. In brief, curbing bribery from an idealistic position may be quixoticuntil the United Nations or a similar organisation arranges for a multinational,legal approach to it.Given the present, imperfect world within which companies operate, some more creams to handle bribery are available. One filling is to choose to internationaliseinto the less-corrupt countries. Clear examples of corrupt countries are China,Indonesia and India, which are rated among the most corrupt countries to dobusiness in the world after Russia indeed, corruption in Indonesiais almost away of life. Only capital of Singapore is more squeaky-clean than most Western countries(Hard graft in Asia 1995, p. 61).Organisation code of ethics. There is another option to approaching the ethicalgaps in international marketing. Firstly, within the home firm, managers coulddevelop an organisation code of ethics for any non-home country within which itoperates, or maybe for a particular region of many countries. For all thesecountries, this code would outline the degree of standardisation and adaptation ineach of eight or so dimensions of bribery, such as expediting bureaucraticprocesses, promotion, corporate hospitality, gifts, dual prices, wage rates,occupational health and safety standards, and lobbying to influence governmentpolicies. The code would take into consideration the cultural, legal-political,economic, competitive and distributive environments of each foreign market andthe home organisation. For instance, it might specify when bribes appear on aninvoice and when they may not (adapted Cadbury 1987). Moreover,acknowledging the greatest differences between an expatriates and his or herhome organizat ions ethical systems, and the local environments ethicalstandards, this code might specify when some purchases or tenders are outsourcedaway from the organisation to a local agent.familiarisation tour of the home organisation would help home country managersappreciate overseas operations, and helping with scholarships to home countryuniversities would foster long-term links when the students return.Of course, managers need to know relevant national and international laws or hirereputable lawyers who know local laws and customs. Although local legal andjudicial systems can be underdeveloped, flawed and flouted (for example, withbribes), a firm may have in its global code that local laws will always beobserved, even if the risks involved in flouting them, even thoughcompetitors may be prepared to take the risks.Finally, to help implementation of the code, the organisation could institute andcode of ethics sensitising training before managers enter an overseas countryand when they ret urn, based on cross-cultural sensitisation sessions like thosediscussed in Hofstede (1991, p. 232). Ethics audits could also be carried out,emphasising improvement and learning about the processes used, such as TQMcontinual improvement programs do. Furthermore, these audits would foster an evolvingawareness of ethical considerations for each of the eight dimensions in a particularorganisation, and in a particular country.ConclusionEvidence suggests that bribery is a fact of life in international marketing that can lead to astonishment,bewilderment and misunderstanding for expatriates at both organisational and personallevels. deuce viewpoints about bribery were examined. The first viewpoint wasrelativist, accepting that bribery has the same roots in Western and other countriesand so different ethical systems may be simply the result of different culturalvalues. In contrast, the second, universalist viewpoint is that a set of ethical valuesapplies anywhere in the world, based on psyc hological and economic grounds. Tobridge these two views, it is strongly suggested to try to understand the culturalforces that determine home and overseas attitudes to the many forms of bribery,which will indeed be a first step to adjustment. The next step is to develop a global or regional codeof conduct that allows flexibility within a gray zone for some situations inparticular countries, based on win-win adjustments. The result could bean evolving code of conduct that adapts to the many dimensions of bribery foreach countrys situation, in a manner that is a negotiation between the cultural,psychological and economic values of an expatriates organisation and of localofficials.1945