Week 12: Ethics in Business

This week we approached a very controversial topic: business ethics. And when talking and debating about it (without never coming to a conclusion), it is inevitable to mention the dichotomy of Relativism vs. Universalism. For this reason, this was the most relevant point debated in class.

Universalism refers to the existence of a universal and general criterion under which actions are judged and evaluated.  It means everybody should act according to same standards no matter what your religion, nationality, race or gender is. On the other side, relativism argues standards are adapted to the conditions and characteristics of every society. Therefore, judging people’s actions in other regions or countries would be a mistake and might be a sign of ethnocentrism. However, I think this is an endless debate and one has to make up his own mind about it.

The second point I found relevant was the different types of briberies. I got kind of amazed that something that is not correct, or even illegal, has a classification. The three types of briberies seen in class are [1]:

• Whitemail Bribes: Intended to induce someone (usually a government official) to do or omit doing something in violation of his lawful duty, or to exercise his (or her) discretion in favor of the payer’s request for a contract, concession, or privilege on some basis other than merit. They usually are universally condemned.
• Lubrication Bribes (gratuities): Facilitate, expedite or speed up government approvals to which the company would be legally entitled. Its acceptability is greater than whitemail bribes.
• Extortion: A government official seeking payment for an action or omission to which the company would be legally entitled.

The way I see it, knowing which countries accept which kind of bribes can be very useful when doing business abroad, because you know if you can use them and/or if you can expect to receive them. I think it is also an issue of tactics, if you choose not to do it in a country where it is not perceived as bad and your competitor does it, then you are in disadvantage.

Research Question: What institutions do people consider as the most corrupt?

To answer this question I resorted to Transparency International’s 2013 annual report [2]. Out of 107 countries surveyed, 51 perceive political parties to be among the institutions most affected by corruption (countries shown below), 20 countries chose the judiciary institutions and 36 elected police as the winner. Colombia belongs to the group blaming political parties as the most corrupt, but it is also one of the few countries (7 in total) who also said the parliament and legislature to be one of the most corrupt institutions.  

                                                                            

Source: http://www.transparency.org/gcb2013/results

References

[1] Prof. Heiko Schmidt – Intercultural Management. Class slides.

[2] Transparency International (2013). Global Corruption Barometer 2013. Retrieved from: http://www.transparency.org/gcb2013/report