Ethical Considerations Of Bribery And Corruption In Corporate Organizations

This Topic has the following learning objectives:

 

1.To identifying three primary ethical theories of

Consequentialism
Deontology or process approaches
Virtue ethics

 

2.To identify the various approaches that fall within these three groups

 

3.To recognise the advantages and disadvantages for each; and

 

4.To develop an approach that incorporates all three in a comprehensive and integrated decision making model

Bribery is considered to be a common practice in corporate organisations. Many companies are alleged with the practice of corruption and bribery. Despite of presuming as a common practice in the light of ethnical consideration it cannot be an ethical trend to do bribery in organisational operations. As far as the ethical consideration is concerned it can be argued that bribery and corruption is unethical and having no positive impact on the social responsibility measure taken by the corporate organisations (Crane & Matten, 2016). In this regard, there are some possible factors behind the practice of corruption and bribery. In this regard, the purpose of this essay is to create a link between the practices of bribery in corporate organisations and the ethical considerations in that context. In addition to this, the legislative frameworks are also incorporated into the discussion in order to get a better understanding of the initiatives taken by the governments in order to resolve this issue. Furthermore, the discussion puts primary emphasis on the managers working overseas particularly in developing countries.

Before, going into the thorough discussion it is important to get a clear view regarding the practice of bribery by discussing two events of commercial corruption in Australia. In fact, both the cases are related to the practice of bribery and corruption where the Australian nationals or the organisations were accused of taking part in overseas bribery particularly in the developing countries. The first case is related to the Australian consulting firm Sinclair Knight Merz (SKM). The Company is connected with the Australian government in the government aid program across the Asia-Pacific. Recently, The Guardian newspaper revealed that this company deliberately bribes the Vietnamese officials in a sophisticated way of using ghost contracts (Knaus & Evershed, 2018). On the contrary, in the early 2018 former Reserve Bank executive Clifford Gerathy was pleaded guilty of paying $79,502 to a Malaysian arms dealer Abdul Kayum in 2006 (McKenzie, 2018). As a result of that it became a subject to proper investigation and The Age found out that this bribery incident was highly linked with the international bribery racket involving senior officials and politicians mainly from the developing countries.

In this regard, it is important to understand the prevalence of bribing practices and tendencies in the developing countries that facilitates the expatriate and overseas managers to participate in those illegal practices in order to pursue their own interests or serving the purpose of the Company. Besides the lack of effective organisational infrastructure and legal stands there is also the bereft of ethical consideration that heightens the practice of bribery in the developing countries. As a result of that it becomes a national culture in the developing countries that creates a hinterland for the big companies to participate in the practice of bribery (Hernandez, T., & McGee, 2014). In this context, there are several ethical theories that are keenly related to the debate over bribery and corruption as legitimate or illegal practice. It can be argued that from the perspective of the developing countries bribing is considered to be a negative measure to be practices. According to Ayyagari, Demirgüç-Kunt & Maksimovic (2014) the role bribery in developing countries is associated with the negative impact on the socio-economic progress of the country which in return left a detrimental impact on the political situation of the developing countries. For example, countries in the Asian and Latin American continent are no longer able to deal with this problem with the help of the only legal steps. It requires proper implication of the ethical considerations to understand the purpose of bribing transparently.

In response to this, there are several ethical theories that are firmly related to the practice of bribery and corruption. The deontological, virtue and consequential theories are associated with this theme. As per as the Consequentialist ethics it can be attributed that the morality of an action is based on the consequences or the perceived consequences of those actions. It can be asserted that among all the consequential theories the theory of utilitarianism is considered to be the most relevant and popular theory discussing the ethical perception of the bribing and corruption practices. In his writing Hannis & Rawles (2013) argued  that bribing is morally unacceptable in society. However, in case of the organisations they want to close the deal by giving bribery and this will continue in future as well. As a result of that the alleged organisation can lose its business in domestic and abroad as well. This is the immoral consequences of bribing. In addition to this, the utilitarianism system puts emphasises on the good and bad for the maximum number of people (David-Barrett, 2014). If the action of the manager maximises bad or evil then the measurement of immorality will be calculated on the basis of the impact on number of people. Corruption resembles the idea of bad and can jeopardize the common good and results pain and suffering to a large number of people (Bull, 2014). In this regard, it is pertinent to understand that the impact of corruption may be foster benefits to some people but those benefits are temporary. Moreover, using bribery as an effective measure can damage the reputation of the company and at the same time has detrimental impact on the personal image. In a precise way the utilitarian ethics opines that if the bribing tendency creates maximum damages then it cannot be identified as good. It will always be immoral in the eyes of ethics.

On the other hand, the deontological ethics interprets bribing and corruption as a part of the decision making process based on recognition of duties. The Kantian understanding of categorical imperative is closely related to the practice of bribery and corruption. As far as this proposition is concerned it can be argued that both paying bribe and taking bribe are immoral in the eyes of the ethical considerations (Kim, 2016). It is the duty and responsibility of the managers to apply ethical considerations in order to cancel out any kind of bribing practice. In fact, the deontological ethics advocates that the fundamentally wrong or the fundamentally right cannot be altered (Crane & Matten, 2016). Henceforth, the entire responsibility is vested on the managers. In this context, if the managers want to meet the additional requirements of the clients then automatically the organisation wants to retain its deal by any means. This in return compels them to opt for practices like bribery or other illegal practices. From this scenario it can be derived that this nefarious practice will encourage other people to seek for unfair advantages in the form of bribery. The Kantian ethics puts more stress on the people as an end not the means to an end. According to the deontological ethics it must be the role of the manager to consult with an assistant for making further commitment to the client (Lestrange & Tolstikov-Mast,, 2013).

Besides this, the virtue ethics also plays an imperative role to figure out the immorality in practicing bribery and corruption. Virtue ethics is considered to be the oldest concept of ethics that is relied upon virtue. It highlights the moral standard of a person and virtuous principle of an individual that decides the moral consistency. Therefore, it can be argued that a moral virtuous person does not do anything wrong because it is in their nature to act morally (Szto, 2015). Based on this understanding, it can be argued that the international managers should follow this type of characteristic as well. In fact, their behaviour reflects the culture of their countries. Therefore, it can be argued that bribery depends on the moral will to do or not to do. As a matter of fact, bribery is not considered to be a decent conduct that the managers must avoid in order to follow moral considerations (Arnold, 2014). However, there is no such certainty that all the managers are relied on the ethical standpoint. Therefore, those people who are using illegal means in order to meet the demand of the clients are identified as immoral. The personality of a manger is strictly resembled with this concept of leadership where the leadership quality of the manager will lead the people or the employee to opt for the right path or choose the wrong way (O'Toole & Tarp, 2014).

The ethical consideration is further facilitated by the anti-bribery laws to manifest the ethical standpoint in a legislative form. As a matter of fact, this is very important for the country in order to set some moral legislation that is help to maintain the moral considerations against commercial bribery (Ayyagari, Demirgüç-Kunt & Maksimovic, 2014). In this regard, the Australian government enacts the anti-bribery law in order to make prohibit such illegal practices. As a matter of fact, in Australia, bribing foreign officials is considered to be a criminal offense under the Schedule of 70.2 of the Criminal Code (Foreign bribery, 2018). In case of bribing is committed by a subsidiary company located in a foreign jurisdiction, a joint venture vehicle or a commercial agent of the Australian parent company will be liable to come under the jurisdiction. However, there is also a new act affecting from 2016 regarding the new federal offences for false accounting. Moreover, the law incorporates the idea of enacting this mechanism for the foreign personnel also. In this regard, foreign individuals having business in Australia including the corporate entities, government officials are accounted under the legal jurisdiction of the anti-bribery law in Australia (Foreign bribery, 2018).

The UN General Assembly resolution on 2003 evoked the concern against corruption. In fact, the United Nations’ legal instrument against corruption is related to the seriousness and threats created by bribery and corruption to undermine the values of democracy, ethical values and justice. Moreover, the illegal acquisition of personal wealth can be identified as detrimental for  the democratic institutions, national economies and the rule of law. In this regard, the role of the Inter-American Convention against corruption in 1996 or the Convention on Combating Bribery of Foreign Pubic Officials in 1997 is considered to the platform for introducing the new convention in 2003 (Convention against Corruption, 2018).

Moreover, the International Chamber of commerce also delivers their concern regarding the prevention of corruption all over the world. The UN regulation is focused on the overall impact of the corruption and bribery while the International Chamber of Commerce (ICC) is committed to prohibit the practice of corruption and bribery around the world (ICC Rules on Combating Corruption, 2018). The purpose of this legalisation is to create a safe environment for business internationally or domestically. Furthermore, the regulation incorporates the anti-corruption compliance programme with the vision to create a better world free from illegal practices like the bribery and corruption.

Based on the understanding it can be stated that bribery and corruption are considered to the immoral in the eyes of ethics. However, some scholars have argued that it is important to know the motive and purpose of the action of bribery and corruption. They consider that if bribery and corruption are entitled to do with the positive purpose then it will generate better result for the benefit of individual and the society as well. Despite of this argument, the ethical standpoint does not corroborate with the fact that bribery and corruption have some benevolent characteristics. It can be stated that on the basis of moral approach bribery is not associated with any benevolence rather it has detrimental impact on the economy and society. Therefore, bribery and corruption are immoral.

It can be argued that the essay rightly points out that the practice of bribery and corruption is considered to be immoral in the light of ethical consideration. As a matter of fact, the existing anti-bribery and corruption legislation both domestic and international are part and parcel of the moral standpoint against these nefarious practices. In this regard, the deontological, consequential and the virtue theory of ethics clearly identify the immorality bestows inside the bribery and corruption. Therefore, these practices must be repealed and at the same the corporate managers have to take extra care in this regard.

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