Business Ethics - Pay The Bribe?

Published by MBA Skool Team, Published on November 19, 2012

Nothing in the business world is Black or White, everything is Grey. You can’t see anything through an absolute lens. But still, is paying bribe become a culture in the business world & is it correct??

I ran the wrong kind of business, but I did it with integrity - Sydney Biddle Barrows

Sometimes, a businessman has to pay bribe to government officials to get permission for making a school or a hospital in an area. The businessman, of course has an intention of starting a hospital to create profits for himself, but also alongside he would also be providing health care to the deprived villagers. Many people would say that giving bribe is bad & unbiblical, it’s against god. But, the fact of the matter is, & sadly, that this has become the new normal in our society.  . Instead of looking the situation through a Biblical lens, if we keep a broad view of things, and see this situation pragmatically, most of the people will have a positive opinion about the bribe paying man. So, is he a sinner or just a victim of the cruel, selfish system?

The truth is that in, nothing in the world is Black or White, everything is Grey. You can’t see or judge anything in the world through an absolute lens. Nothing like an absolute truth or an absolute lie exists. People manipulate truth for their gains, as we could see across the timeline. Every day in legal courtrooms across the world, we can see laws being manipulated, twisted by lawyers to save their client, who may be a victim or the culprit. But this has to be the order of the day, if we insist on a trial before conviction.

You just cannot look the world through a black or white approach. Nothing is just black or white. There are a lot of factors which play an important role in any situation. Before coming to a conclusion about anything, it’s important to take into account all the stakeholders, the factors playing a role in the completion of the process. One thing which would be good for someone could be bad for someone else. As the old adage goes, beauty lies in the eyes of the beholder.

Good or evil – Black or White depends on an individual’s perception

Your purpose in life is based upon the logic you were taught, not always the logic you can learn. If your parents were very conservative in their money spending, you learned to be too and thought this approach only to be good or white, and all others to be bad or black. Then for you, a person with an entrepreneurial bend of mind, who takes risks with money, would be a foolish, bad person. Likewise, in the eyes of the entrepreneurial person, the conservative, money saving person would be a coward and foolish person.

The Crux of the matter

A famous television serial protagonist has said these golden words –

"Let me give you some advice, Captain. It may help you to make sense of the world. I believe you find life such a problem because you think there are the good people and the bad people. You're wrong, of course. There are, always and only, bad people, but some of them are on opposite sides."

— Lord Vetinari, Guards! Guards!

The end result of a deed  may  be good, but if the process is not moral, it may not be accepted by the major part of the society. As another saying goes, you are a thief, only if you are caught i.e. if you steal and are not caught, then you will not be labeled as a thief. Society’s perception of a thing makes it either good or bad. Things are hard wired, taught to people from their childhood.

A lot depends upon your upbringing and those around you as to how long it takes you to realize, if ever, that nothing is black or white.  This shapes their perception of things, and hence, their choices and in the long term, even the direction of their life. A growing number of senior executives around the world are willing to pay bribes to win or keep business, as the hunt for growth supersedes concerns over ethics and regulatory fines.

Boards put pressure on the CEO to improve the bottom lines, there is immense pressure, and for getting the results, they succumb under pressure and fall into the lure of paying bribery, to facilitate smooth proceedings of the business transactions.

In 2012, The Economist noted:

Bribery would be less of a problem if it wasn't also a solid investment. A new paper by Raghavendra Rau of Cambridge University and Yan Leung Cheung and Aris Stouraitis of the Hong Kong Baptist University examines 166 high-profile cases of bribery since 1971, covering payments made in 52 countries by firms listed on 20 different stock markets. Bribery offered an average return of 10-11 times the value of the bung paid out to win a contract, measured by the jump in stock market value when the contract was won.

Yes, bribery works a lot of times- But is it correct??

So  the fact of the matter is, does the contemporary business environment makes it impossible for smooth working of a company , without paying these bribes or “gifts” as called in the corporate circles??

There have been many high profile examples of Corporates paying bribes for getting a license or getting a tender e.t.c. Kickbacks, bribery and the list goes on and on. High profile cases like, Siemens AG paying $16 million to the Argentinean president to secure a contract for making Argentinean identity cards. The contract was worth $1 billion to Siemens AG. In total, the company was accused of paying more than $100 million in total to government officials. These cases enforce the idea that, for a smooth running business, you have to succumb under the competitive pressure and give into the easy world of paying bribery and getting your work done in a jiffy. People in the corporate world say that the pressure of deadlines, projects become too hard and they succumb to actions like bribery to get the work done & get that all important promotion or raise.

But we cannot ignore the other side of the coin….

Ideally we would say that a person should have the courage to hold on to his/her moral values and stick to what is correct, both legally and ethically & refuse to pay or accept the bribe. But the thing is, looking through a pragmatic lens of social sense, sometimes for a just end, you have to use means which, in the proper sense may not be just. To start a factory, which would employ thousands, would support the employee’s family, would bring development to the area, the owner may have to pay a bribe to facilitate the formalities smoothly. There are many cases of govt. officials exploiting their positions of power to extract kickbacks, gifts from an innocent, god – fearing, aspiring business owner. He is over powered by the power of the position holder and succumbs to pressure to pay the bribe.Also; a corporate may also initiate paying the bribe, to get some favors in return from a government official.

The fact is corruption exists at all levels, & instead of just rambling about the problem, we should try to find out a solution -

So what can be done?

People have accepted the fact that paying bribe is part of doing or starting a business. Corporates, usually keep some money in the expenditure side of their profit – loss account, to pay bribes. This shows the depth to which the attitude & beliefs of the people have become rotten. Most important thing is that, people’s perception should be changed. People should be educated that, paying or taking bribe is incorrect & they should not succumb under any pressure and pay or receive it. Proper anti-corruption laws should be made and their proper implementation should be done. The watchdogs should be given enough teeth to take on the high & mighty. Changes like, making paying bribe in some cases, legal should be done to protect the victim, in India’s anti-corruption bill.

These changes would reinforce the confidence of people in our law & order machinery & empower the common man to stand up and fight against injustice, so as to finally do business in a bribery free, transparent environment. As charity begins at home, so does a corruption free society starts with our own self, our own attitudes, our own thinking.

Be the change, you want to see.

Mahatma Gandhi

This article has been authored by Rajwinder Singh from K J Somaiya Institute of Management Studies & Research.

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