¶ … bribing" unethical and illegal or just a cost of doing business? Bribery is unethical and illegal in some societies and a regular part of business in others. Whether or not an activity is unethical is largely dependent on the culture, customs, norms, values, and laws of the country where the activity takes place. It's a matter of perspective. When you consider that the act of bribery is intended to supplement the income of underpaid officials or increase the power of a nation's governments, the outcome of the bribe is a negative one. Most economists and ethicists agree that bribery's effects are largely detrimental (Weber and Getz, 2004). If the effect of the act is detrimental, then it can be argued that it is unethical to engage in bribery even if it is only a cost of doing business.

There are different types of corruption: bureaucratic corruption where officials take bribes; political corruption where politicians take bribes using their positions of power; and grand corruption meaning misuse of public power by heads of states, ministers and top officials for private, pecuniary profit (Gerasimova, 2008). Bribery has opportunity costs because the money paid as bribes is not put to productive use and may lead officials to contract with inefficient firms for inappropriate goods or services (Weber and Getz, 2004). Bribery creates disincentives to foreign investment by increasing risk and uncertainty for firms, such that economic development is hindered (Weber and Getz, 2004).

The negative consequences of bribery on the local population should be considered by every company that engages in operations in that country. If the act of bribery causes the government to engage in unproductive projects that deteriment its citizens then it is unethical for companies to engage in bribery.

II. What other options do companies have to win business contracts without bribing?

Corruption is a symptom of other, deeper-seated factors, such as poorly designed economic policies, low levels of education, underdeveloped civil society, and the weak accountability of public institutions (Gerasimova, 2008). This makes it difficult for...

Depending on the level of corruption it may not be possible to win a contract without bribery. It is difficult to compete against other companies that are willing to pay the bribes to get the contracts despite the negative effects on the people of the country.
One way that businesses could win contracts may to offer to invest money in developing countries to increase economic development, build infrastructure and create jobs. This can only work, however if there are government officials of the country are willing to forgo bribes for the good of the country. Some countries have rampant bribery at all levels of government and other countries have more low level officials that accept bribes, but may have a level of government that a company can work with to avoid the bribes.

Another method of winning contracts without bribes would be for company's competing for contracts to all agree not to offer bribes. This is a difficult proposition because not all companies share the same values and the desire for profits may outweigh the desire to stop bribery. International organizations have suggested a two-sided approach to stopping bribery - to change attitudes toward multinational bribery in industrial countries and to increase awareness in developing countries of the costs of corruption (Gerasimova, 2008). Breaking the culture of bribery is the only real way for companies to compete fairly, because then all the companies competing would be on a level playing field.

Part B

I. What advantages does an understanding of local culture give managers in working in business competition?

Many businesses have failed due to a lack of understanding of local culture, especially concerning taboos. In the Middle East there are strict religious rule on how men and women interact, which must be taken into consideration when operating a business (Daniels, Radenbaugh and Sullivan, 2010). Managers who understand cultural differences will be more successful and less likely to make critical errors that can drive customers away.

Understanding cultural differences…