Exploring Small Business Strategies to Comply With the Foreign Corrupt Practices Act

Exploring Small Business Strategies to Comply

With the Foreign Corrupt Practices Act

Section 1: Foundation of the Study

Compliance with the Foreign Corrupt Practices Act (FCPA) is a significant

business issue in the United States (Cleveland, Favo, Frecka, & Owens, 2010). The U.S.

Congress enacted the FCPA in 1977 to criminalize corruption and to enhance the

corporate image of U.S. corporations in global markets (Feld, 2013). The intent of the

FCPA is to eliminate illegal foreign business transactions, but the leaders of small U.S.

companies conducting business with a foreign government continue to have questions

related to obtaining or retaining business with a foreign government (Yockey, 2013).

Leaders at U.S. companies encounter vague areas in the FCPA provisions; this vagueness

results in misinterpretations of FCPA rules, FCPA violations, and significant penalties

(Alemu, 2013; Jennings, 2013; Yockey, 2013). Without proper oversight by the U.S.

government, business transactions between U.S. companies and international

governments can also lead to noncompliance with FCPA provisions (Nadipuram, 2013;

Wedeman, 2013).

Background of the Problem

In 2007, U.S. industries increased global product transactions by more than $1.4

trillion (Das, 2010). Global product sales expose U.S. companies to business activities

with people from various cultures and with different values, norms, and regulations

(Baughn, Bodie, Buchanan, & Bixby, 2010). Fierce competition to provide global

products has led the leaders of multinational corporations to bribery on a large scale, with

global business bribery estimated at $1 trillion a year in 2002 (Eigen, 2013; Graycar &

Sidebottom, 2012; Hess, 2009). Based on the most recent U.S. international contracts

loses information available, from 1994 to 2001, U.S. companies lost an estimated $200

billion in international business contracts to foreign competitors that allegedly paid bribes

to win contracts (Darrough, 2010).

Bribery and corruption have significant consequences: Global business bribery

negatively affects the economic growth of businesses, and corruption leads to an

anticompetitive environment (Smith, Gruben, Johnson, & Smith, 2013). World Bank

analysts estimated the cost of corruption at $2.6 trillion annually, which is more than 5%

of global gross domestic product (GDP; Cleveland et al., 2010). The objective of

international antibribery laws and organizations such as the FCPA, the United Nations

Convention Against Corruption (UNCAC), and the Organization for Economic

Cooperation and Development (OECD) is to eliminate global corruption (Cleveland et

al., 2010). U.S. Congress enacted the FCPA in 1977 in response to the U.S. companies

including Lockheed and General Electric allegedly bribing foreign government officials,

politicians, and political parties to gain government contracts (Cascini, DelFavero, &

Mililli, 2012). Since the FCPA entered into effect, U.S. companies must comply with the

FCPA requirements and not use bribery to obtain international business contracts

(Cascini et al., 2012). However, noncompliance issues remain; for example, a recent

FCPA violation resulted in a $1.6 billion penalty to Siemens (Fox, 2010). Some U.S.

small business organizations have indicated that they lack strategies to ensure FCPA

compliance (Yockey, 2013).

Problem Statement

Estimates of international bribery are $1 trillion per year, and estimates of the

costs of global corruption range as high as 20% of the value of world business

transactions (Nadipuram, 2013). In 2009, U.S. companies lost more than $25 billion in

international contracts due to foreign competitors using bribery and corrupt practices

(Nickerson, 2011). The general business problem is that U.S. aerospace companies must

operate competitively in the global market and comply with the FCPA, but enforcement

of the FCPA by the U.S. Department of Justice does not occur in international settings for

non-U.S. companies. The specific business problem is that some U.S. aerospace small

business leaders lack strategies to comply with the FCPA.

Purpose Statement

The purpose of the qualitative single case study was to identify the strategies U.S.

aerospace small business leaders use to comply with the FCPA. The study population

consisted of leaders of a small U.S. aerospace company in California operating in the

international market that had an absence of penalties, a good international business record

of accomplishment, and successful compliance with the FCPA at the time of the study.

The selected population was appropriate because these leaders were part of California’s

aerospace industry, which represents 47% of the aerospace industry engineering and

product development in the United States (U.S. Department of Labor, 2012). The findings

of this study showed successful small business strategies for FCPA compliance. Reducing

crime in business transactions results in an improvement in the safety of people and

organizations, reduces the cost of conducting business, and improves the quality of life

for individuals and communities (Lestrange & Tolstikov-Mast, 2013; Lord, 2013). This

suggests that applying these findings will lead to reductions in the cost of conducting

global business and may lead to an increase in the number of U.S. aerospace jobs while

also demonstrating social integrity.

Nature of the Study

I used a qualitative case study design for this study. Qualitative research was

suitable for the study because the goal of the study was to identify strategies participants

used to comply with the FCPA. A qualitative researcher studies a phenomenon in the

related context of an experience (Sharma & Aniket, 2014; Yap & Webber, 2015). A

quantitative methodology was not suitable for the study because this research did not

involve comparing or analyzing variables. A quantitative methodology is suitable for

analyzing a relationship between variables (Gelei & Dobos, 2014; Macur, 2013). A

mixed methods methodology was not suitable for the study because the quantitative

aspect was not designed to address participants’ experiences with FCPA compliance

strategies, and did not require hypothesis testing.

Three qualitative research design options were evaluated: phenomenology,

ethnography, and case study design. For this study, I decided that the case study design

was the appropriate choice because the research consisted of studying individuals’ FCPA

compliance strategies through semistructured interviews. Researchers use a case study

design to explore a program, event, or person in depth for a particular amount of time to

determine real-life experiences regarding a specific phenomenon (Leedy & Ormrod,

2013). The ethnography design was not suitable for the study because this research did

not include lengthy observations of participants. The ethnography design encompasses

extended fieldwork involving observation and cultural interactions within members of a

group (Wagar, 2012). The phenomenological design was not suitable because

participants’ perspective and views of the FCPA were not part of this research.

Researchers use the phenomenological model to understand participants’ perspective and

opinions of a phenomenon (Leedy & Ormrod, 2013).

Research Question

The research question for the study was as follows: What strategies do U.S.

aerospace small business leaders use to comply with the FCPA?

Interview Questions

The qualitative single case study included the following open-ended interview

questions to collect data:

1. What strategies do you use to comply with the FCPA?

2. What recent changes have you made in your company policies to improve

compliance with the FCPA?

3. What does leadership consider essential for FCPA compliance?

4. What action plan considerations would ensure continued success with FCPA

compliance?

5. What other pertinent information do you see that we have not covered in this

interview?

Conceptual Framework

The conceptual framework for this study was based on the regulatory compliance

theoretical model (Sutinen & Kuperan, 1999) and the corruption conceptual model

(Becker & Stigler, 1974). The regulatory compliance and the corruption conceptual

models served as a conceptual reference and lens to identify the FCPA adherence

strategies needed by U.S. aerospace small business leaders. The regulatory compliance

conceptual model served as a theoretical lens for understanding strategies used by

executives to comply with the FCPA. The corruption conceptual model provided a

theoretical underpinning to gain deeper insight into how indicated strategies address the

FCPA requirements.

The key tenets of the regulatory compliance conceptual model are: (a) costs and

the revenues from illegal behavior, (b) the moral obligation of behavior, and (c) social

influence associated with criminal behavior (Sutinen & Kuperan, 1999). The key

constructs underlying the corruption model are (a) government structure influence, (b)

cultural influence, (c) corporate profits, (d) government officials’ self-interests, and (e)

strategies for FCPA compliance (Becker & Stigler, 1974). As applied to this study, the

propositions advanced by the regulatory compliance conceptual model and corruption

model established the framework needed for me as the research to use it as the theoretical

foundation for interpretation and analysis of participants’ experiences with strategies for

FCPA compliance.

Operational Definitions

Foreign Corrupt Practices Act (FCPA): A U.S. antibribery law passed by U.S.

Congress in 1977, prohibiting U.S. citizens and organizations from providing payments to

foreign government officials to obtain or retain business contracts (Cascini et al., 2012;

Feld, 2013).

Foreign Corrupt Practices Act (FCPA) compliance: Abstaining from bribing

government officials in foreign countries to gain business opportunities, in compliance

with the FCPA (Virginia & Maurer, 2013). FCPA strategies: Corporate, organization, or

small business plans created by executives and leaders to comply with the FCPA

(Lestrange & Tolstikov-Mast, 2013; Yockey, 2013).

Small aerospace company: In the context of this study, a U.S. aerospace company

with 500 employees or less (U.S. Small Business Administration, 2014).

Assumptions, Limitations, and Delimitations

Assumptions

The assumptions of a study usually relate to the research techniques employed in

the research and are the sentiments of what the researcher believes to be true for the

study, but are not verified (Leedy & Ormrod, 2013). The first assumption was that the

qualitative single case study is a useful design to explore the FCPA strategies used in

U.S. aerospace small businesses. The second assumption was that data saturation would

occur during interviews with the management of one small aerospace company in

California. The third assumption was that executives participating in the interview

process would accurately convey their strategies for FCPA compliance. The fourth

assumption was that the interview participants would represent an appropriate

crosssection of the U.S. small-business aerospace industry population.

Limitations

The limitations of a study include the research approaches used in the study

(Leedy & Ormrod, 2013). Limitations are potential research weaknesses over which a

researcher has no control (Bouzon, Augusto, & Manuel, 2014; Marshall & Rossman,

2011). The potential bias namely due to the desire to protect confidential company

information of participants during the interview, as well as the possible lack of

recollection of experiences with the FCPA, may have been a limitation of the study. The

mitigation of this limitation consisted of asking follow-up questions to clarify and to help

participants’ recollection of FCPA compliance experiences.

Participants’ potential concerns about a connection between personal identity and

the information disclosed during the interview might have represented a limitation of the

study. To mitigate this limitation, participants received a signed consent form before the

interview that listed the steps being taken to ensure participant anonymity (see Appendix

A).

Another limitation was been the small sample from a small aerospace company.

To mitigate this limitation, the corporation selected for gathering data was a successful

aerospace company in the United States operating in international markets.

Delimitations

Delimitations refer to the boundaries established by a researcher (Leedy &

Ormrod, 2013). Marshall and Rossman (2011) described study delimitations as the design

parameters that researchers control, such as the location and scope of a study. The first

delimitation of the study was geographical: Due to the limited time and financial

resources available, only U.S. aerospace companies located in California comprised the

population for this study. The second study delimitation was the research scope: The

number of participants in the interviews consisted of five to seven executives in a small

aerospace business experienced with FCPA compliance. The third delimitation of the

study was the restriction of the study to the U.S. aerospace industry: The FCPA

compliance strategies used in other industries were not part of the study. The fourth

delimitation of the study was the curtailing of the research to a small company size: The

study included an examination of only one small U.S. aerospace company with

international trade experience and has 500 or fewer employees.

Significance of the Study

This study was designed to generate information of interest to small business

leaders wanting to obtain and maintain international business contracts. The FCPA

compliance strategies identified, if followed, are expected to lead to a reduction of FCPA

violations during the pursuit and fulfillment of international contracts. The analysis of

gathered data included identified strategies for FCPA compliance that may result in the

reduction of law ambiguities. Reducing ambiguities in FCPA compliance may influence

the legality and positive social presence of small business operations in the global

markets.

Contribution to Business Practice

Compliance with the FCPA helps to reduce costs of operation, improve profits,

equalize competition, and enhance the competitive nature of conducting international

business (Lestrange & Tolstikov-Mast, 2013; Lord, 2013). Adapting strategies for FCPA

compliance is expected to increase profits and decrease costs for U.S. aerospace

corporations. Violations of the FCPA, however, cost corporations and shareholders more

than the benefits gained from bribery, including decreased profits, increased costs of

doing business, and wasted business opportunities (Choudhary, 2013). The findings from

this study are expected to contribute to knowledge on avoiding bribery and corruption in

international markets. The identified strategies from this study, if implemented, are

expected to decrease the business challenges faced in adhering to the FCPA. Using the

strategies discovered during this study is supposed to reduce the cost of conducting

international trade.

Contribution to Social Change

The results from this study are expected to lead to improvements in corporate

ethical standards in international trade practices by reducing contract corruption and

increasing compliance with the FCPA. Decreasing contract corruption is expected to

result in reduced corporate operational costs. Reduced operational costs are expected to

lead to additional jobs in the industry, which possibly improve the local economy.

Complying with FCPA mandates reduces business corruption. A decrease in corruption

frees small business funds. The freed additional funds and a corporate culture that

emphasizes compliance with laws are expected to positively affect small businesses and

affect quality of life in the local business community. Lestrange and Tolstikov-Mast

(2013) and Lord (2013) indicated reducing business transactional crime through FCPA

compliance creates a safe environment for conducting business, reduces costs, and creates

jobs, which results in a positive social change.

Review of the Professional and Academic Literature

Writing a comprehensive review of a research topic by examining related

literature involves developing a plan, obtaining the proper business orientation, and

emphasizing relatedness to the research (Leedy & Ormrod, 2013). Literature reviews start

with an exhaustive review of published papers on the research topic to provide new

perspectives on the themes of the study (Ergazakis, Metaxiotis, & Askounis, 2013;

Wolfswinkel, Furtmueller, & Wilderom, 2013). The literature review in this study

involved a comprehensive evaluation of the Walden Library databases to find articles and

seminal works related to FCPA compliance topics and subtopics. Of the 313 references

used, 307 were peer-reviewed articles (i.e., 98% of the cited references are peer-reviewed

articles) and 272 had a publication date of 2012 or later. Therefore, 87% of the cited

references were peer-reviewed articles published within 5 years old of the anticipated

graduation date, meeting university standards for recent research.

The literature review consisted of two parts. The first part of the literature review

discussion includes the databases and indexes searched using FCPA compliance, bribery,

and corruption terms. The first part also includes a resources table of the exhaustive

literature search and a figure of the main topics and subtopics of the literature review.

The second part of the literature review includes the synthesized analysis of peerreviewed

articles and seminal work related to identified topics and subtopics in the figure.

Literature Search Strategy

The literature search strategy used in this study started with keyword searches and

then subject term searches. The keyword and subject term searches included (a) foreign,

(b) foreign corruption, (c) Foreign Corrupt Practices Act, (d) corruption, (e) international

business, (f) FCPA compliance strategies, (g) bribery, (h) fraud, (i) anticorruption laws,

(j) fraudulent, (k) U.S. aerospace industry, and (l) California aerospace industry.

Keyword and subject term searches using the Walden Library online databases helped in

obtaining peer-reviewed articles and scholarly materials relevant to the concepts of the

study. The Walden Library databases searched included ProQuest, Academic Search

Complete, ABI/INFORM Global, PsycINFO, Education Research Complete, ERIC,

ScienceDirect, Emerald Management Journals, SAGE Premier, and Business Source

Complete.

The first searches of the databases using keywords generated 5,105 articles,

dissertations, books, and other materials related to the topic area and research process.

Narrowing the search to only peer-reviewed articles focused on the FCPA and articles

focused on aerospace industry compliance with FCPA issues reduced the number of

relevant articles to 304 items. Consequently, the second subject term searches yielded

98% of the peer-reviewed article, with 86% of the peer-reviewed articles published in

2012 or later. Table 1 includes the number of resources reviewed, including peerreviewed

journal articles, dissertations, books, reports, newspapers, websites, and corporate

information related to strategies for complying with the FCPA.

Table 1

Details of Literature Reviewed by Year of Publication

The purpose of this study was to explore the strategies used by U.S. aerospace

small business leaders to comply with the FCPA. The following section includes a

description of the literature related to the regulatory compliance theoretical model and the

corruption model. The following section also includes the literature review structure and

synthesis of reviewed articles related to the research question.

Regulatory Compliance Theoretical Model

Sutinen and Kuperan (1999) first developed the model of regulatory compliance

to account for the costs and the revenues from illegal behavior, as well as the moral

obligation and social influence associated with criminal behavior. Malik’s (2014)

regulatory compliance model showed that selective forgiveness of noncompliance is

optimal when the firm exerts a high level of compliance efforts. Yockey (2013) noted the

1961-2011 2012 2013 2014-2016

Literature Type

Peer-reviewed journal articles 139 169 287

Dissertations 60 50 100

Websites 30 50 175

Books and reports 25 68 113

Newspapers and editorials 80 105 280

FCPA is vague and often confusing about what qualifies as legal and illegal international

business transactions under the FCPA.

Hamilton (2012) maintained the regulatory compliance model functions because

people comply with the regulations and do the right thing. Hamilton indicated regulatory

compliance systems rely on the auditor’s review priorities and the appropriate penalties

imposed for noncompliance. Méndez (2014) maintained that individual desires for unjust

enrichment are the main factors that undermine regulatory compliance.

Joseph, Ngoboka, Mutebi, and Sitenda (2012) based regulatory compliance

successes on social values such as individual judgment, decision-making, and moral

calculus. The socioeconomic context of a country affects regulatory compliance

(Blackman, 2012). Governments of developing countries encourage industrial growth

over compliance; the intent is to remedy noncompliance with global industry regulations

(Blackman, 2012). Regulatory oversight influences regulatory compliance through the

rigorous government monitoring, enforcement, and prosecution of violators of

government compliance standards (Mande, Ishak, & Idris, 2014).

Corruption Model

Becker (1968) first discussed the corruption model in an essay on the economy of

crime and punishment and used economic analysis to develop governmental policies for

law enforcement officers to combat illegal behavior. Becker and Stigler (1974) presented

the concept of the corruption model by showing that corruption occurs due to poor law

enforcement. Becker and Stigler also indicated the violation of a law is a partial failure of

the law. Bowles and Garoupa (1997) complimented Becker and Stigler’s idea by

illustrating how the effectiveness of the government enforcement system diminishes

when the amount paid in bribes for a crime is less than the punishment for the offense.

Bowles and Garoupa extended the economic model of crime to include the process of

bribing a police officer for not disclosing the identity of a criminal.

Tullock (1996) based the corruption model on the premise that paying bribe fees

is usually less than paying required tax charges. Additionally, Tullock indicated the

complexity and ambiguity of the antibribery laws invite noncompliance with

anticorruption rules. The majority of people object to bribery on moral grounds without

considering that practical efforts such as corporate rent seeking, and complex

governmental laws could lead to corporate bribery to bypass local antibribery statutes

(Tullock, 1996). Furthermore, Tullock noted corporate funds received by a government

official as compensation for performing a task for the corporation are appropriate fees;

however, there is no differentiation between rent-seeking payments and bribes. Pillay and

Kluvers (2014) implied a country’s economic perspective, regulative structures,

government efficiencies, culture, and organization structures influence the levels of

corruption in that country.

Pillay and Kluvers (2014) used the institutional model to describe the influence of

organizational structure on corrupt actions. Eigen (2013) and Waldman (1974) defined

corruption as officials’ public misuse of the position to violate existing legal norms in the

country for personal gain. Waldman also indicated that business leaders participating in

corruption in a foreign country fall into four social categories: immoral, antagonist,

revisionist, or pragmatic.

The main topics of the literature review are FCPA compliance strategies, a

synopsis of the literature, culture and corruption, self-regulation and corruption, and

anticorruption laws and local governments. The literature review includes other

subtopics, such as corporate FCPA internal compliance processes and self-regulation. The

subtopics of corruption history and significant topics related to the FCPA study explain

the development of strategic compliance with the FCPA. Other topics presented are the

crime and culture subtopics, including a country’s culture and corruption, company

culture and corruption, and the relationship between wealth and corruption.

Methodologies

To identify the suitable research methodology, an evaluation of the quantitative,

mixed, and qualitative methods was necessary. Based on the problem statement and the

literature reviews of similar studies, the qualitative methodology was the appropriate

method for this study. Yeoh (2012) applied the qualitative research methodology to

analyze the bribery act implications and compliance expectation from regulated firms in

the United Kingdom and the U.K. Bribery law expansion on FCPA expectations.

Karhunen and Kosonen (2013) applied a qualitative methodology approach in a study of

the strategic responses of foreign subsidiaries to host-country compliance with

anticorruption laws. Dhaher (2013) used the qualitative research methodology to study

the Palestinian Authority telecommunications regulation compliance with international

anticorruption laws. Dhaher, Karhunen and Kosonen, and Yeoh implemented the

qualitative research methodology in similar studies, which supported the selection of the

research approach for this study.

Literature Review Structure

The literature review structure for this study consisted of topics and subtopics

related to FCPA compliance strategies. Critical analysis and synthesis of peer-reviewed

articles related to the FCPA compliance strategies presented in the following paragraphs.

Figure 1 indicates the structure of the literature review.

Figure 1. A flowchart showing the structure of the literature review.

FCPA Compliance Strategies Used in the U.S. Aerospace Industry

The present FCPA and related amendments include general ambiguities, and

international governments do not adequately enforce the FCPA laws (Barker, Pacini, &

Sinason, 2012; Darrough, 2010). U.S. aerospace industry exports comprise 6% of total

U.S. exports (U.S. Census Bureau, 2012). The FCPA regulations significantly affect U.S.

exports, which amounted to $2.20 trillion in exports in 2012 (U.S. Department of

Commerce, 2013). Recent penalties imposed on the U.S. aerospace companies for

violating the FCPA prompted a need to examine the complexity of compliance

instructions for the FCPA (Cascini et al., 2012; Fox, 2010). U.S. industry leaders have

debated the need to make changes to the FCPA (Barker et al., 2012; Fraser, 2012;

Yockey, 2013). The following synopsis of the literature review includes a list of key areas

examined to ensure a clear understanding of the factors that influence global business

bribery and identify strategies used to comply with the FCPA.

Synopsis of the literature review. After a thorough review of more than 220

peer-reviewed articles related to the problem statement at the Walden University Library,

the following researchers emerged as establishing the literature underpinnings of this

study. Cascini et al. (2012), Klinkhammer (2013), Sanyal and Samanta (2011), and

Vanasco (1999) discussed the origination of the FCPA and the penalties related to

violations. Lord (2013) and Nell (2009) identified the relationship between governments’

types and fighting noncompliance with anticorruption laws. Weismann, Buscaglia, and

Peterson (2014) established that corporate leaders using the self-regulatory model of

corporate governance failed to comply with FCPA and to eliminate corruption in related

organizations.

Huang and Rice (2012) and Wedeman (2013) discussed the difficulties of

identifying international business bribery committed by multinational companies and the

lack of clear guidelines for management on how to deal with noncompliance with FCPA.

The literature review in this study encompassed an analysis of the lack of effectiveness of

the FCPA in reducing or eliminating international business corruption, using severe

penalties imposed on U.S. companies for FCPA violations. The literature review also

included a review of articles related to global governments’ involvement in fighting

crime, corporate self-regulations of corruption, and difficulties identifying international

noncompliance with the FCPA.

To ensure the completeness of the literature review, an extensive review of related

studies and relevant literature to the research topic is necessary (Moustakas, 1994). The

literature review included an extensive research of the Walden University Library

databases, including ProQuest, Academic Search Complete, ABI/INFORM Global, and

PsycINFO. Furthermore, the literature review included an exhaustive study of Walden

University Education Research Complete, ERIC, ScienceDirect, Emerald Management

Journals, SAGE Premier, and Business Source Complete databases. Other databases

searched included Google Scholar and local library databases on international business

corruption. A literature review involves examining books, websites, and peer-reviewed

studies related to the research question (Leedy & Ormrod, 2013). The literature review

included major topics related to complying with the FCPA and international business

corruption and includes support an annotated bibliography of related peer-reviewed

reference articles.

This study involved reviewing interpretations of FCPA compliance factors applied

in the U.S. aerospace industry and more specifically in the small-business aerospace

industry in California. This research involved identifying a set of interpretations of the

FCPA factors directly related to the small-business aerospace industry for fair

international market share. Akbar and Vujic (2014), Bierstaker (2009), and Eisenbeib and

Brodbeck (2014) explored the relationship between cultures, corruption, and different

attitudes toward compliance with antibribery laws. Results of such studies showed

corruption and noncompliance with the FCPA are more culturally acceptable in Eastern

countries than in Western countries, and Asian company executives are likely to engage

in bribes when managers encounter significant market competition.

The U.S. aerospace companies compete with Asian companies within Asian

markets. U.S. Companies are required to comply with the FCPA law when pursuing

international business. However, the FCPA law has limited reach to foreign companies

that are not listed on the U.S. Stock Exchange. The FCPA and related amendments bound

U.S. companies, but not Asian based companies that are not registered on the U.S. Stock

Exchange (Feld, 2013). Other areas of consideration are good government and the effects

of local laws on the enforcement of global anticorruption laws in corresponding countries

(Koike, 2013; Nathanson, 2013). International countries’ local laws lack the power

needed to enforce global anticorruption laws (Cuervo-Cazurra, 2008; Gao, 2011; Koike,

2013; Sanyal & Samanta, 2011). The form of government significantly affects the

enforcement of local antibribery laws (Bryane & Mendes, 2012; Ntayi, Ngoboka, &

Kakooza, 2013; Weismann et al., 2014).

Multiple studies have shown positive correlation relationships between a

country’s wealth, compliance with anticorruption laws, and corruption (Abdulai, 2009;

Mujtaba, Williamson, Cavico, & McClelland, 2013; Schofield, 2009). For example,

bribes are higher in developing countries than in developed countries (Abdulai, 2009).

Bierstaker (2009), Hess (2009), and D. Watson and Watson (2013) established a

relationship between corporate culture and corruption, where corporate behavior in

developing countries is a major factor that influences corporate crimes. Abdulai (2009),

Akbar and Vujic (2014), and Hess (2009) illustrated the relationship between

organizational culture, local laws, country wealth, and country culture. Koike (2013),

Schofield (2009), and Varottil (2013) discussed culture influence on the interpretation

and compliance with FCPA and the acceptance or elimination of corruption in a country.

The established relationships between corporate culture, local laws, country

wealth, and country culture influence the construct of the type of FCPA changes. The

FCPA changes are necessary to ensure the success of the California aerospace industry in

international markets. The literature review process involves focusing on the review and

evaluation of research conducted by others on the topic under study (Leedy & Ormrod,

2013). The focus of the literature review in this study was the examination of articles

related to the research question on the FCPA modifications needed by U.S. aerospace

companies in California.

History of anticorruption compliance. Corruptions, noncompliance with

anticorruption laws, and misuse of position power have occurred throughout history

(Singh & Singh, 2012). Corruption has existed since the development of a structured,

institutionalized society with leader–follower relationships (Singh & Singh, 2012).

Corruption also existed in the Egyptian Paranoiac era in 3000 B.C. and came through the

people’s offerings to the rulers (Warner & Scott, 2011). Greek philosophers such as

Aristotle and Plato referred to corruption in the Greek Classical era (Singh & Singh,

2012).

Corruption was documented in 30 B.C. in the Roman Empire, which occurred

through increased taxation on peasant farmers, by the ruling class (DeLorme, Isom, &

Kamerschen, 2005). The Roman governments changed from a democratic form of

government to increased misconduct through the rent-seeking behavior of the emperor

with virtually no compliance to anticorruption laws (Warner & Scott, 2011). The

corruption of the ruling class in the Roman Empire and the lack of a strategy to create and

comply with anticorruption laws were some of the factors that attributed to Roman

Empire’s failure in 476 A.D. (Warner & Scott, 2011). The Byzantine Empire also had

significant corruption and virtually no compliance with anticorruption laws, which

resulted in the loss of purpose and direction during the period between 1042 through1050

when Zoe and Constantine IX ruled Constantinople (Haldon, 2011).

Anticorruption laws and anticorruption strategies continued to be lacking in the

Byzantine Empire until period they lost power to the Ottoman Empire in 1453 (Haldon,

2011). In the late part of the 15th century and in the 16th century, corruption and

noncompliance with anticorruption laws continued in the Ottoman Empire with

documented evidence in court cases and imperial orders (Demirci, 2003). Evidence of

17th-century corruption and the lack of strategies to comply with anticorruption laws

appear in documented corrupt business practices during the relationship between the

English monarchy and the East India Company (Parkinson & Chew, 2013).

In the 18th century, corruption occurred in the Dutch tax-collecting process,

which prompted public discontent and resulted in tax riots (Kerkhoff, 2011). The tax riots

forced a radical alteration of the Dutch tax-collecting process, such as ending farm tax

collection by private tax collectors and starting institutional public tax collection in 1748

(Kerkhoff, 2011). In the 19th century, corruption existed in the United States, and

corruption continued to be visible in the building and operation of the U.S.

transcontinental railroads (Bogart, 2013). Railroad corruption occurred through bribes

given by railroad builders to government officials to ensure the continuous flow of

government funds to the projects (Bogart, 2013).

In the 20th century, the lack of compliance with anticorruption laws was present

and visible during the prohibition of the manufacture, sale, and transportation of alcohol

in the United States (Gaytan, 2014). In the 20th century, alcohol supplies came to the

United States from Mexico and Canada, which earned the smugglers millions of dollars

(Gaytan, 2014). The high demand for alcohol during the prohibition period by Mexicans

and the working class in the United States attributed to corruption in this market sector

(Gaytan, 2014).

Early in the 20th century, U.S. workers established labor unions to combat

corruption (Green & Isaacson, 2012). However, late in the 20th century, labor unions in

the United States experienced corruption, and leaders failed to comply with

anticorruption laws (Jacobs, 2013). The labor unions in this period controlled significant

financial resources, which allowed union leaders to bribe government officials and avoid

complying with anticorruption laws (Krinsky, 2013).

Buchheit and Reisner (1998) reported that Justice Holms in 1909 predicted that

the U.S. Department of Justice judges would struggle in how to extend U.S. laws

overseas, which may cause friction with other countries. U.S. Congress passed a law

known as the Helms-Burton Act in 1959 that extend the reach of U.S. laws outside of

U.S. territory (Buchheit & Reisner, 1998). The Helms-Burton Act was a federal law

created on behalf of U.S. citizens when the Cuban government confiscated U.S.-owned

property in Cuba (Buchheit & Reisner, 1998). The passage of the Helm-Burton Act led to

protests from other countries; however, an earlier proposed FCPA by Justice

HelmsBurton gained acceptance by the same countries that dissented against the Helms-

Burton Act (Buchheit & Reisner, 1998).

During the U.S. Watergate scandal in the early 1970s, researchers in the U.S.

Department of Justice uncovered questionable payments by global companies to

international government officials (Harris, 2011). The U.S. public was outraged at the

controversial payments, and the need to improve the international image of the U.S.

government led to the creation and introduction of the FCPA (Harris, 2011). As expected

with legislation, some people in Congress agreed with the FCPA and others disagreed

(Harris, 2011). Those who agreed believed that it was immoral and unethical for U.S.

companies to pay government officials in other countries (Harris, 2011). Those who

disagreed indicated compliance with the FCPA would hinder the competitiveness of U.S.

businesses overseas (Harris, 2011).

The FCPA passed in 1977 because of President Nixon and the Watergate scandal

(Feld, 2013). President Carter signed the FCPA into law in late 1977 (Cascini et al., 2012;

Feld, 2013). In the Watergate period, U.S. government officials discovered U.S.

aerospace and oil corporations allegedly bribed officials in other governments to gain

contracts (Cascini et al., 2012). The Trade and Competitive Act of 1988, as well as the

FCPA and related amendments, raised awareness of the need for additional internal

company anticorruption controls and strategies to comply with the FCPA (Vanasco,

1999). Company corruption allegedly occurred when foreign government officials

received bribes to gain contracts (Vanasco, 1999).

In the 21st century, lack of compliance with the FCPA is still present, and

employees of U.S. aerospace companies allegedly bribe international government

officials to gain contracts (Darrough, 2010). The FCPA, which is one of the significant

business corruption deterrents, applies to U.S. companies, U.S. company personnel, and

foreign firms trading on the U.S. Stock Exchange in U.S. territories (Feld, 2013). The

implementation of adequate controls to increase compliance with the FCPA in the 21st

century is helping to curb corruption (Sanyal & Samanta, 2011).

Researchers at the U.S. Department of Justice and the U.S. Securities and

Exchange Commission recorded only 72 cases of noncompliance with the FCPA by U.S.

industry in 2010 (Feld, 2013). Other countries such as Great Britain reduced corruption

by adopting the United Kingdom Bribery Act, in which 103 United Kingdom contractors

faced fines of 180.7 million pounds for corruption practices (Donohoe, 2011).

Developing countries created local anticorruption agencies to fight corruption (Doig &

Norris, 2012). The U.S. Department of Justice imposed a $2 billion penalty on Siemens

for an FCPA violation shows the vigorous enforcement of anticorruption laws in the

United States (Sanyal & Samanta, 2011). The Sarbanes-Oxley Act, passed by members of

U.S. Congress in 2002, holds executives personally liable for fraudulent acts committed

by corresponding corporations (Cascini et al., 2012).

Recent increases in FCPA enforcement in the United States led to debates

regarding the need for reforms to the act (Yockey, 2013). The ambiguity of the FCPA and

uncertainty among U.S. corporations and international business communities in how to

comply with the law led to the recent amendments to the FCPA (Vanasco, 1999). The

extensive literature review resulted in identifying international business compliance with

the FCPA and business corruption studies cited in this section. The annotated studies

include significant topics related to compliance with the FCPA that address the factors

influencing corruption in global business. The focus of this study was to identify the

FCPA compliance strategies used by U.S. aerospace small business leaders in California.

Significant topics related to the FCPA. Significant topics emerged from an

exhaustive literature review related to the research question. One of the topics that

emerged was the effect of countries’ culture on the development of corporate strategies

for compliance with FCPA (Baughn et al., 2010). Another topic was the influence of a

country’s wealth on compliance with anticorruption laws (Abdulai, 2009). Another topic

was the influence of corporate culture on the development of strategies to comply with

anticorruption laws (Bierstaker, 2009). Other topics included the failure of corporate

selfregulation to influence compliance with the FCPA (Yockey, 2013), as well as the

relationship between international and local anticorruption laws (Gao, 2011).

The relationships between a country’s culture, wealth, and compliance with FCPA

are significant for U.S. aerospace industry competitiveness in international markets

because such relationships clarify the contract governmental fees and influence pricing

strategies. The following subsections include discussions on the relationship between

culture and compliance with antibribery laws, self-regulation and corruption, and

enforcement of international and local antibribery laws. Also included in the following

subsections are discussions on the effect of the form of government, corporate culture,

local antibribery laws, and countries’ wealth on corporate compliance strategies for the

FCPA.

Culture and anticorruption compliance. National culture significantly

influences a country’s levels of corruption, where people in countries with high

masculinity and high levels of uncertainty avoidance are less compliant with

anticorruption laws than in countries with low masculinity and low levels of uncertainty

avoidance (Akbar & Vujic, 2014). Executives of multinational corporations need to assist

countries corruption and establish strategies on how to comply with the FCPA while

conducting business in such countries (Cleveland et al., 2010). Askari, Rehman, and

Arfaa (2012) indicated corruption occurs when public officials use of the public office for

unlawful private gains. Pacini (2012) defined bribery as the act of giving an item of value

to a public official in the hope of obtaining influence or benefits from the official during

the execution of official duties. National cultures shape the cultures of corruption at

different organizations and ultimately affect the strategies for complying with

anticorruption laws in organizations (Zaloznaya, 2012).

Different cultures use different interpretations of corruption and tolerate different

levels of corruption. Kumar (2013) discussed Indian corporate culture tolerance toward

corruption and the need for reforms to maintain the flow of international investments in

India. Gong and Wang (2013) explained the low tolerance levels of people in Hong Kong

toward corruption. In contrast, Bardhan (2014) showed the high tolerance levels of Indian

and Chinese populations toward corruption. Therefore, international business managers

need to understand the cultural tolerance and interpretations of corruption in their

assigned countries.

Some of the driving factors creating the cultural differences toward the

interpretation of corruption include level of power distance, level of uncertainty

avoidance, and the masculinity (Baughn et al., 2010). Power distance refers to the

relationship between executives and subordinates, and in high-power-distance cultures,

managers adapt paternalistic relationships toward subordinates, whereas in low-

powerdistance cultures, subordinates frequently question management decisions

(Winkler, Busch, Clasen, & Vowinkel, 2014). Researchers typically associate masculinity

with the level of aggression and assertiveness in a society, and corporations from high

masculinity societies tend to commit bribery to achieve corporate objectives (Baughn et

al., 2010; Schlaegel, He, & Engle, 2013). Uncertainty avoidance refers to society's

attitude toward the future and the population’s ability to deal with the inherent

complexities and ambiguities (Schlaegel et al., 2013). Corporations from low-uncertainty-

avoidance societies have the tendency to commit bribery to achieve corporate objectives

(Baughn et al., 2010). Understanding cultural differences, helps predict the severity of

domestic corruption and noncompliance with FCPA (Baughn et al., 2010). Cultural and

religious environments where firms conduct business influence behavior toward

corruption (Lee, 2012; Mensah, 2014; Pena Lopez & Sánchez Santos, 2014).

Quah (2013) and Smith et al. (2013) examined countries’ Corruption Perceptions

Index (CPI) scores and the numbers relationship to the levels of foreign investment in

such countries. Countries with low CPI scores had high corruption levels and were less

desirable for outside investors to invest in such countries’ projects. The FCPA laws forbid

employees of U.S. companies from bribing officials of foreign governments to obtain or

maintain business. The basis of complying with the FCPA is the theory of a self-

regulation process where leaders of a firm ensure compliance with the FCPA (Virginia &

Maurer, 2013; Weismann et al., 2014). However, in numerous cases, selfregulation was

not sufficient, and corporate governance failed to comply with the FCPA (Weismann et

al., 2014).

United Nations anticorruption laws failed to achieve intended goals because of the

lack of global enforcement power of such laws (Anechiarico, 2010). In the absence of an

international anticorruption-enforcing body, countries must rely on local anticorruption

agencies with little enforcement powers (Anechiarico, 2010). Anechiarico (2010)

contended that even though countries enacted local anticorruption laws, such local laws

often fail to enforce international anticorruption laws, including the FCPA. Strategies to

comply with FCPA by U.S. corporations need to include the FCPA international

enforcement limitations for countries where local laws have limited enforcement powers

(Virginia & Maurer, 2013).

Ethical issues, legal factors, and business growth challenges faced by international

firms when conducting business in the People’s Republic of China have deep roots in the

Eastern culture (Wen, 2013). O’Neill (2014) and Wen (2013) showed the effect of

foreign direct investment (FDI) into China on Chinese business strategies for compliance

with international anticorruption laws. Wen (2013) described the problems leaders of

foreign firms faced when conducting business in China, including low levels of

accountability, lack of transparency to the rule of law, and economic inefficiencies.

Highpower-distance cultures where managers adapt paternalistic relationships toward

subordinates harbor corruption more than low-power-distance cultures where

subordinates question management decisions and offer personal opinions (Yeganeh,

2014). O’Neill (2014) and Wen (2013) showed how noncompliance with anticorruption

laws affects competitiveness and profitability, cultural and ethical values, human rights,

civil liberties, protection of workers, and the destruction of the natural environment

related to sustainable development.

Wedeman (2013) and Zheng et al. (2013) indicated business bribery could be

difficult to identify in different cultures, and a company employee can hide bribes under

entertainment and travel expenses. In contrast, Mujtaba, Williamson, Cavico, and

McClelland (2013) contended the corruption levels in target countries determine a

country’s success in international business. Mujtaba et al. examined 10 Asian members of

the OECD that have similar laws regarding foreign corrupt practices.

Huang and Rice (2012) blamed corruption on the lack of corporate directives

written for global business leaders to follow in bribery situations and the lack of corporate

strategies to comply with international antibribery laws, including FCPA. Akbar and

Vujic (2014) and Grimes (2013) attributed business corruption to the different

interpretations of corruption in rules-based Western cultures versus relationship-based

Eastern cultures. Galang (2012) showed an organization’s characteristics and operating

environment significantly influence the levels of corruption, including the government’s

structure. Zhou, Han, and Wang (2013) noted Asian business leaders are more likely to

use bribery when facing market competition, corrupt local court systems, inefficient local

government, and high local taxes. Huang and Rice showed the significance of expatriate

executives in the corruption process and related cultural dilemmas when confronting

corruption in a host country. Expatriate managers encounter cultural difficulties with

corruption when differences exist between the host country’s culture and a corporate

culture’s interpretation of corruption (Huang & Rice, 2012).

Fighting corruption and compliance with FCPA across cultures is difficult due to

the different cultural perspectives and attitudes toward crime (Bierstaker, 2009). The

differences in attitudes by executives and employees toward FCPA compliance result in

varying interpretations of the corruption legislation (Bierstaker, 2009). Howson (2012)

and Sung (2012) examined the influence of gender on corruption in different cultures and

showed major differences toward crime between men and women, where they found that

women comment less business fraud than men do.

Akbar and Vujic (2014) and Bierstaker (2009) analyzed the differences between

cultures and corresponding tolerances to FCPA noncompliance. Corruption could be a

regular part of conducting business in a particular culture and an unacceptable act in

another culture; which makes compliance with FCPA more complicated (Akbar & Vujic,

2014; Bierstaker, 2009). Leaders of multinational corporations can reduce corruption

through global corporate directives sensitive to cultures that when their international

managers follow this instruction can achieve a reduction in business crimes and comply

with FCPA (Bierstaker, 2009; Huang & Rice, 2012).

Baughn et al. (2010), Anechiarico (2010), Akbar and Vujic (2014), and Eisenbeib

and Brodbeck (2014) used bribery, nepotism, and malpractice as examples of corruption

and related effect on the development of corporate strategies to comply with FCPA in

such countries. Huang and Rice (2012) analyzed the effects of consumer resource

availability in importing countries, the physical distance between importing and exporting

countries, and the cultural differences between importing and exporting countries.

O’Neill (2014) and Wen (2013) analyzed relationship influences versus information-

oriented influences on bribery and the effects of corruption on corporate success. The

identified cultural aspects are major elements to consider when addressing needed FCPA

modifications related to the U.S. aerospace industry in California.

Countries’ wealth and anticorruption compliance. The wealth of a country plays

a significant role in a nation’s approach to corruption. Wealthy countries in particular

instances contribute to the exportation of corruption. Studies of bribery showed one third

of the employees in European companies believe leaders would use bribery to gain new

business (Valentine, Godkin, & Vitton, 2012). At the 2009 OECD Forum on Fighting

Corruption, Schofield (2009) reported the magnitude of global bribery is reaching

trillions of dollars yearly.

In 2009, members of the OECD met to emphasize the need for additional controls

to reduce global business corruption (Schofield, 2009). G. Wilson and Wilson (2014)

maintained the world financial crisis occurred due to the failure of governments and the

laws used to predict and punish companies for employees’ financial misconduct. Graeff

and Svendsen (2013) showed a strong relationship between wealth and corruption in 25

European countries. Abdulai (2009) related poverty to the level of corruption and

supported the argument using GDP per capita, where lower GDP correlates with higher

corruption. However, Abdulia’s small sample size was not conclusive.

Abdulai (2009) and Graeff and Svendsen (2013) noted wealthy countries foster

less corruption than developing countries. However, Schofield (2009) and G. Wilson and

Wilson (2014) indicated the political will to fight corruption in developing countries

influences the levels of corruption. The desire to maintain an industrial base in wealthy

countries requires wealthy country policy makers to engage in protectionism (G. Wilson

& Wilson, 2014). The aspiration of organizational leaders in rich countries to gain global

market share creates a condition that invites noncompliance with anticorruption laws (G.

Wilson & Wilson, 2014).

According to Mujtaba et al. (2013), there is a significant linear relationship

between the wealth generation of a country and the country’s level of noncompliance

with FCPA through corruption. Understanding a country’s wealth effect on corruption is

essential for identifying possible FCPA compliance strategies related to the aerospace

industry in California. Understanding the relationship between state wealth and

corruption could help corporations in the formulation of FCPA compliance policies.

Knowledge of a country’s wealth relationship to crime influences the development of the

FCPA compliance strategies used by the aerospace industry in California.

Corporate culture and anticorruption compliance. Corporate culture

significantly affects the development and execution of FCPA compliance strategies

(Bierstaker, 2009). Clear guidelines regarding proper ethical behavior when conducting

business in the international markets affect corporate culture (Bierstaker, 2009). Global

corporate citizenship requires compliance with antibribery laws by small, medium, and

large enterprises (Galpin, 2013; Inyang, 2013). Small and medium enterprises account for

90% of worldwide business (Galpin, 2013; Inyang, 2013), and small and medium

enterprise leaders need to establish an anticorruption policy and create an FCPA

compliance program to ensure international business leaders avoid bribery situations

(Jorge & Basch, 2013).

Adeyeye (2014) maintained that corruption consists of a demand and a supply

side, as in every economic situation. Adeyeye also showed that leaders of corporations

needed to address the two sides of the crime simultaneously to effectively curb corruption

and achieve FCPA compliance. Leaders of organizations play a significant role in

eliminating corruption in international business by complying with FCPA (Adeyeye,

2014; Bierstaker, 2009). Furthermore, Adeyeye and Bierstaker indicated a favorable

investment climate does not necessarily reduce crime. In contrast, Alexeev and

Habodaszova (2012) and Dechenaux, Lowen, and Samuel (2014) revealed time pressure,

urgency to increase revenues, and the size of bribes are situational factors influencing

leaders’ decisions regarding corruption.

Chinese business leaders’ personal philosophies and ethical views play a

significant role in the interpretation and participation in unethical business activities

(Feldman, 2014; Lu, Ling, Wu, & Liu, 2012). Hess (2009) indicated a lack of corporate

commitment to combating corruption and the expansion of the definition of crime in

criminal law have a significant role in curbing corruption and FCPA compliance.

National culture influences corporate culture regarding how corporate leaders view

bribery and the potential of employees to engage in bribery when conducting business

overseas (Choudhary, 2013; Klinkhammer, 2013).

Ethical and unethical forms of networking facilitate corruption (Bhatt & Bhatt,

2013). Companies and individuals can benefit from belonging to a social network system

because of mutual understanding (Bhatt & Bhatt, 2013). Knowledge networking, which

includes utilitarian networking, emotional networking, and virtuous networking, is a

human activity with an ethical dimension (Huang & Rice, 2012). Acting within the moral

dimension of a network contributes to the creation of trust and harmony within the

network (Bhatt & Bhatt, 2013). Corruption occurs when an undeserving candidate

receives government benefits because an intermediary agent bribed government officials.

The result is noncompliance with anticorruption laws (Sabie, 2012; White, 2013).

Numerous factors can influence the corporate anticorruption culture, and

anticorruption organizations can be successful in adverse environmental conditions

(Vaccaro, 2012). A close inspection of the relationship between a culture of

noncompliance with anticorruption laws and developing culture is necessary (Akbar &

Vujic, 2014; Pena López & Sánchez Santos, 2014). Corruption and noncompliance with

anticorruption laws are acceptable in numerous cultures including Chinese, Vietnamese,

and Burmese cultures, where using an intermediary to facilitate corporate transactions

through bribes between government officials and the corporation is the norm (Feldman,

2014).

Compliance with local government anticorruption laws influences corporate

culture, corporate liquidity, and control of corporate corruption (Bryane & Mendes,

2012). Company leaders need to be proactive to ensure compliance with the FCPA.

Company leaders should also maintain procedures in place to ensure corporate

compliance with the FCPA (Fox, 2010). Companies should have global standards and an

ongoing auditing program to ensure proper governance and accountability (Badamasiuy

& Bello, 2013; Wanyama, Burton, & Helliar, 2013). Corruption negatively affects the

development of developing countries, and governments must demand strict compliance

with anticorruption laws (Abdulai, 2009). Abdulai (2009) concluded fighting corruption

in a sustainable manner requires a genuine and strong commitment from the top political

elite within a country.

Corrupt organization leaders create organizational cultures and establish work

structures where employees facilitate corruption on a daily basis without being aware that

something illegal is occurring (Campbell & Goritz, 2014). Corporate culture, including

management behavior toward corruption as well as corporate procedures, affects

employees’ behaviors toward bribery (Braje & Galetic, 2014; Tilley, Fredricks, &

Hornett, 2012). An analysis of the relationship between corruption and gender in

corporate cultures revealed no relationship exists between gender and corruption

(Howson, 2012; Sung, 2012).

The relationship between networking and openness in companies increases the

tendency toward greater bribery, noncompliance with anticorruption laws, and corruption

(Huang & Rice, 2012). Cascini et al. (2012) analyzed the inclusion of FCPA compliance

in the corporate code of ethics and employee training and the ways compliance with the

FCPA can lead to an antibribery corporate culture. One of the limitations of Cascini et

al.’s study was the author's focus on big business’ compliance with FCPA. Current trends

in FCPA enforcement are ineffective, and the integration of the FCPA into corporate

culture through value-based management strategies could improve FCPA compliance at

both small and large companies (Lestrange & Tolstikov-Mast, 2013).

Self-regulation and anticorruption compliance. Based on Weismann et al.

(2014), the self-regulation approach in U.S. industries has been unreliable and has failed

to enforce compliance with FCPA due to the concentration of power at U.S. major

institutions. Self-regulation has also been ineffective because corporate stakeholders have

failed to control the ethical business behavior of organization members. In contrast,

Yockey (2013) and Sethi and Schepers (2014) attributed self-regulation failure to a lack

of governmental regulatory resources, which forced authorities to rely on voluntary

corporate self-disclosure. Adegbite (2012) noted the corporate governance failures of

self-regulation in Nigeria increased corruption, and good corporate governance is

necessary to curb corruption in the country. Weismann et al. identified U.S. corporate

leaders as the primary reason for self-regulatory failure in enforcing FCPA compliance

due to leaders’ engagement in questionable financial schemes and the way leaders

continually shifted risks to innocent parties.

The failure of the corporate FCPA self-regulatory model to control corruption has

deep roots in the theory of self-regulation (Virginia & Maurer, 2013; Weismann et al.,

2014). Burger (2012) noted neither self-regulation nor government oversight leads to a

dramatic reduction in FCPA compliance, although the combined efforts of the two

systems could result in a needed reduction in corruption. In contrast, Blackburn (2012)

attributed corruption to the misuse of government-delegated power, as seen in the

relationship between the differing powers given by the government through the

delegation of authority to bureaucrats. Blackburn further showed the delegation of

government authority to bureaucrats gives government officials the administrative

discretion to collect bribes from the public and invites noncompliance with anticorruption

laws. Blackburn indicated there is evidence of the negative effect of bribes on economic

growth because corruption diverts money from a country’s economic growth activities

into power-seeking activities.

Ionescu (2013) contended technological improvements introduced through

egovernment databases significantly affected the reduction in corruption. Weismann et al.

(2014) revealed self-regulation is not sufficient to reduce bribery or increase FCPA

compliance, and it is essential to maintain oversight and good governance to promote and

maintain economic growth. Blackburn (2012) indicated the delegation of government

powers to public officials can create opportunities for corruption, and monitoring systems

are necessary to ensure corruption is not present.

Technology such as e-government would be effective in increasing compliance

with antibribery laws, lowering the levels of corruption, and potentially increasing

specific types of bribery in the public sector (Ionescu, 2013; Ojha & Palvia, 2012).

Blackburn (2012), Weismann et al. (2014), and Yockey (2013) indicated self-regulation

is not sufficient in fighting corruption and increasing FCPA compliance. Government

oversight is necessary to ensure compliance with anticorruption laws. Ionescu (2013) and

Weismann et al. (2014) discussed the role of technology in monitoring compliance with

antibribery laws and limiting corruption. Effective corporate self-regulations and

government oversight of FCPA compliance using technology-monitoring processes

reduces FCPA violations by U.S. corporations (Weismann et al., 2014; Yockey, 2013).

International and local anticorruption compliance laws. International

antibribery laws remain unenforced and conflict with local country laws (CuervoCazurra,

2008; Darrough, 2010). The Chinese government’s intervention in the cause of bribery on

behalf of the bribing company influences the company’s bribing behavior (Gao, 2011). In

contrast, Nell (2009) contended the government should intervene and treat contracts as

valid to avoid additional costs and legal complexity. China antibribery laws possess

severe penalties; however, enforcing the laws is difficult. In contrast, the enforcement of

Canada’s Corruption of Foreign Public Officials Act was successful and reached the $10

million range in enforcement penalties (Keith, 2014). Good governance in Singapore

reduced corruption, increased compliance with anticorruption laws, and led to

Singapore’s success in attracting international business (Jon, 2013).

Adeyeye (2014) discussed the effect of creating a governmental mechanism for

combating bribery in Singapore, such as the Prevention of Corruption Act and related

limited successes in fighting corruption. Cuervo-Cazurra (2008) showed noncompliance

with anticorruption laws had no effect on the flow of FDI funds to corrupt countries.

Antibribery international laws need global coordination to ensure effective compliance

and a level playing field for participants (Cuervo-Cazurra, 2008). Saleh (2014) showed a

lack of focus on internal compliance audits of antibribery laws, government oversight,

and appropriate justice procedures are factors in the corruption problems in Iraq.

Gao (2011) revealed government leniency toward bribing firms might send the

wrong message to such firms that reduce compliance with antibribery laws. In

comparison, Nell (2009) asserted that governments occasionally might need to intervene

and accept contracts obtained through bribery as valid contracts to avoid costly legal fees

and legal complexity. Sanyal and Samanta (2011) indicated the enactment of national

antibribery laws, coupled with vigorous transnational enforcement of compliance with

international antibribery laws, influenced the levels of bribery with no effect on FDI

funds. In contrast, Quazi, Vemuri, and Soliman (2014) maintained corruption and

noncompliance with antibribery laws in the short term positively affect FDI, but

ultimately negatively affects a country’s economic growth. Moreover, Quazi et al.

indicated market size, government effectiveness, infrastructure, and economic freedom

affect FDI significantly.

Gao (2011), Nell (2009), and Cuervo-Cazurra (2008) discussed government

enforcement of compliance with international and local anticorruption policies and the

need for transnational enforcement of international antibribery laws. Adeyeye (2014) and

Darrough (2010) discussed the lack of compliance with current international antibribery

laws due to conflicts with local laws intended to enforce the international laws. However,

Jura, Aninat, and Mefford (2014) indicated an increase in transnational lawsuits by U.S.

courts related to compliance with FCPA, even when the originating country is not a

signatory of international anticorruption laws.

Government from, local laws, and anticorruption compliance. This section

includes an examination of the immoral and unethical aspects of bribery discussed in the

principal provisions of the antibribery compliance legislation, including the FCPA,

OECD, United Nations Convention Against Corruption, and laws of participant countries.

The World Bank analysts estimated international bribery at $1 trillion per year and

corruption at $2.5 trillion per year, which amounts to 5% of global GDP (Cleveland et al.,

2010). Cleveland et al. (2010) showed the effects of the FCPA and the FCPA’s

antibribery compliance provisions, the OECD organization, and local antibribery laws

and policies as evidence of progress in fighting international bribery.

The large fines paid in 2010, including the Siemens company payment of $1.6

billion for FCPA violations, showed active observation and compliance with the

antibribery law (Fox, 2010; Turk, 2013). However, legal complications deeply rooted in

antibribery noncompliance cases are concerns in countries such as the United Kingdom

because of the law’s effectiveness (Virginia & Maurer, 2013). Schmidt and Gualmini

(2013) illustrated how the form of government and government leadership in Italy

influenced corruption in Italy, which reduced the domestic wealth of the country.

Henning (2009) focused on financial crimes in Roman-Dutch law and showed how

Roman laws had a greater effect than the current fraud laws, which would be more

efficient in combating financial corruption in the 21st century. Lash and Batavia (2013)

indicated property rights are the biggest sources of corruption, and reforms of antibribery

laws are necessary for diverse legal systems. Mitchell, Merrington, and Bell (2014)

showed 117 studied countries had local anticorruption laws in place, but 50% of the

countries had low CPI scores, which indicated the need for more oversight.

Cleveland et al. (2010) suggested conducting additional studies to monitor and

examine progress in fighting the battle against noncompliance with anticorruption laws

and transnational bribery, including human rights and environmental protection

dimensions. In contrast, Bryane and Mendes (2012) contended the form of government

and local laws significantly affect noncompliance with antibribery laws and corruption in

a country where bureaucrats demanded bribes as a condition for project approval. Two of

the weaknesses of Bryane and Mendes’s study were the geographical and theoretical

limitations in the scope of the study.

Ntayi et al. (2013) indicated economic changes and the form of government used

in the procurement of public infrastructure projects are critical factors that contribute to

corruption in Ghana. In comparison, Goel and Nelson (2011) contended in the United

States, the levels of FCPA noncompliance and corruption related inversely to the wealth

and level of education of state populations. Goel and Nelson derived conclusions from

empirical models of individual state convictions of corrupt public officials measured over

a 5-year period. Goel and Nelson also derived conclusions over a longer period of crime

across states.

Religion in the United States has shown no effect on FCPA compliance or

corruption levels; however, an association exists between greater prosperity and lower

corruption (Goel & Nelson, 2011). Gjinovci (2013) showed the informal economy in

transition countries fosters corruption due to the lack of public understanding and

willingness to participate in the enforcement of anticorruption laws. Feldman (2014)

revealed other methods used in business corruption monitoring such as using

intermediation between corrupt government officials and recipient candidates for

government services. Noncompliance with antibribery laws and corruption occurs when

an undeserving candidate receives government benefits by using an intermediation agent

bribing of government officials (Feldman, 2014). Corrupt officials can offer services to

individuals not entitled to government services for a price (Sabie, 2012; White, 2013).

One area not investigated was the effect of potential collusion between officials and

intermediaries.

Lawyers at the U.S. Department of Justice frequently used criminal and civil

actions as an instrument to reduce corruption and increase FCPA compliance in global

markets (Jennings, 2013; Virginia & Maurer, 2013). The increase in civil actions is not

necessarily due to a failing criminal system, but is a result of suitable recovery

alternatives. Civil actions against corruption occur when company leaders need to take

decisive and immediate action for rehabilitation and compensation. Tas (2012) showed

local laws in Iraq need amendments to allow Iraq’s legislation to address money

laundering and financial institutions’ noncompliance with anticorruption laws. Another

form of noncompliance with antibribery laws is corporate tax evasion, where the practice

of bribing government officials results in corporate tax avoidance (Alexeev &

Habodaszova, 2012; Fakile & Adegbie, 2012).

This section included a review of Cleveland et al. (2010), Fox (2010), and

Virginia and Maurer’s (2013) research on governments’ role in enforcing FCPA

compliance. The section included a discussion of government influences controlling

corruption and the enforcement of compliance with local and international anticorruption

laws. Bryane and Mendes (2012) and Goel and Nelson (2011) indicated key public

contracts are more vulnerable to corruption as well as tax evasion because of government

officials’ roles in fostering corruption. Because of government-related corruption, an

examination of local and international anticorruption law enforcement is necessary for the

context of FCPA compliance strategies needed in the California aerospace industry.

In summary, the reviewed literature showed the effects of cultural, wealth,

corporate self-regulation, and forms of government in fighting business corruption and

the need for effective corporate compliance strategies to comply with antibribery laws.

Bryane and Mendes (2012), Cleveland et al. (2010), Fox (2010), Goel and Nelson (2011),

Ntayi et al. (2013), and Virginia and Maurer (2013) indicated compliance with FCPA in

global business depends on (a) the form of government, (b) corporate self-regulation, (c)

local enforcement of international anticorruption laws, (d) a country’s wealth, and (e)

organizational culture. The literature review provided the context for explaining and

understanding the elements of the improved business practice of the study on exploring

aerospace business changes in the FCPA.

Transition and Summary

This section included a discussion of global corruption in business, bribery’s

historical background, and corruption growth in the international market. This section

also included organizational bribery, FCPA compliance, and other international

antibribery laws. The section encompassed the history of FCPA compliance strategy

problems, the problem statement, the nature of the study, the objective, the research

question, and the significations of the study to the aerospace industry. Furthermore, this

section included a description of the theoretical framework, the transformational

leadership theory, the corruption model, and the regulatory compliance model, including

the models’ suitability for this case study. This section included the assumptions,

limitations, delimitations, and anticipated social change, as well as a review and synthesis

of the academic literature related to culture and compliance with antibribery laws,

selfregulation of bribery, enforcement of international laws, and enforcement of local

antibribery statutes.

Additionally, this section included a discussion of a country’s wealth and a

country’s effect on bribery, FCPA compliance, and corporate culture and related effect on

corruption. Section 2 includes the role of the researcher, participants, sampling, data

collection, data analysis, research method and design, data validity, and data reliability.

Section 3 includes a discussion on the application of the findings to professional practice

and recommendations for further research. Furthermore, Section 3 includes an overview

of the study, a presentation of the data, the findings, applications of the results to global

management professional practice, and social change implications.

Section 2: The Project

Aerospace companies in California are losing international business due to

briberies by foreign competitors. From 1994 to 2001, U.S. companies, including the

aerospace industry, lost $200 billion of foreign trade contracts to competitors allegedly

bribing government officials to win new contracts (Darrough, 2010). Corruption in the

aerospace industry is an international business problem in which government officials

around the world use position and power for illegal financial gains through bribes

(Blackburn, 2010).

To combat international corruption, U.S. Congress approved the FCPA in 1977 to

preclude a particular class of persons and entities namely U.S. companies, U.S.

individuals, and foreign companies listed on the U.S. Stock Exchange from bribing

government officials to obtain or retain business (Vanasco, 1999). Dissenters against the

FCPA in the U.S. Congress contended that compliance with FCPA would negatively

affect U.S. business (Harris, 2011). The U.S. Fortune 500 companies’ annual

international business losses to competitors due to competitors’ noncompliance with the

FCPA are over $36 billion of potential new business (Thompson & Medina, 2012). The

primary focus of this research study was to identify the FCPA compliance successful

strategies used by leaders in a small California aerospace company.

Purpose Statement

The purpose of the qualitative single case study was to identify the strategies U.S.

aerospace small business leaders use to comply with the FCPA. The study population

consisted of business leaders at a small U.S. aerospace company in California that was

operating in the international market, had not received any FCPA penalties, had a good

international business record of accomplishment, and was successfully complying with

the FCPA. The selected population was appropriate because the population is part of

California’s aerospace industry, which represents 47% of the aerospace industry’s

engineering and product development in the United States (U.S. Department of Labor,

2012). The findings of this study showed successful small business strategies for FCPA

compliance are expected to reduce the cost of conducting global business and lead to an

increase in the number of U.S. aerospace jobs while demonstrating social integrity. This

is important because Lestrange and Tolstikov-Mast (2013) and Lord (2013) indicated that

reducing crime in business transactions results in positive social changes such as

improving the safety of people and organizations, reducing the cost of conducting

business, and improving the quality of life for individuals and communities.

Role of the Researcher

I was the primary data collection instrument in this qualitative single case study.

The role of the researcher is to ensure the data collected are valid and reliable (Leedy &

Ormrod, 2013). Networking, collaborating, managing the analysis, performing the

research, and collecting data are part of the researcher role (Kyvik, 2013). Researchers

must ensure safety and confidentiality while paying close attention to researcher behavior

during the interviews to avoid harming the participants (Gibson, Benson, & Brand, 2013).

My work as a researcher was informed by my having held a senior executive

position in the aerospace industry for over 28 years, including significant exposure to

international business development and contract negotiations. This aerospace experience

was helpful in contacting participants and asking members to participate in the study. The

basic ethical principles applied throughout the research process involved informing the

participants of the right to have a safe environment for the interview, receiving an

informed consent form (see Appendix A), and explaining a participant’s right to

terminate the interview without giving a reason for ending the interview.

Participants signed consent forms collection process occurred before the

interviews begin. I took steps to maintain the highest level of ethics and to comply with

the Belmont Report protocol by focusing on the well-being of the research participants.

The authors of the Belmont Report principles primarily focused on the well-being of

study subjects, including specifying steps to protect participants’ anonymity, safety,

vulnerability, and right to terminate the interview without giving an explanation, as well

as the data protection process (Bromley, Mikesell, Jones, & Khodyakov, 2015). Rogers

and Lange (2013) indicated the Belmont Report protocol protects vulnerable research

populations from potential exploitation. Strause (2013) described the three principles of

the Belmont Report protocol as autonomy, beneficence, and justice for study participants.

Researchers should ensure no harm comes to participants due to participation in a

study (DuBois et al., 2012; McKee, Schlehofer, & Thew, 2013). Further safeguards

during the data collection process must prevent risks to participants because of joint

involvement in the study (Durham, Brolan, & Mukandi, 2014; McInnes et al., 2012).

Researchers should ensure the data collection is nonintrusive, and participants can stop

the interview without giving a reason for the decision (Hassali, Siang, Saleem, &

Aljadhey, 2013; Yuan, Bartgis, & Demers, 2014).

Biases can occur due to preexisting knowledge and experience with the topic

under study; I therefore took steps to use a nonpersonal lens to view the collected data to

help mitigate potential biases. A plan existed to ensure personal biases do not affect the

performance of this study through careful note taking, performing data triangulation,

category coding, and using open-ended questions during the interviews. Additionally, I

focused solely on the answers to the interview questions as presented by participants, a

review of company policies, and personal reflective journal. Kache and Seuring (2014)

and Lituchy, Ford, and Punnett (2013) indicated open-ended questions, content analysis

supplemented by contingency analysis, and individual category coding reduce researcher

bias in a study. Researchers can minimize personal biases, but eliminating individual

biases is often difficult (Kache & Seuring, 2014; Ülle, 2014). I therefore also practiced

triangulation after collecting the data to reduce researcher bias, as recommended by

Kauppinen-Räisänen et al. (2014) and Lin, Wu, and Hua-Ling (2013).

The semistructured interview protocol (see Appendix B) used in this study to gain

insight on participants’ strategies for FCPA compliance served to encourage members to

discuss personal experiences with FCPA compliance and provided an opportunity for

follow-up questions. Using a semistructured interview protocol creates an open,

nonthreatening environment for the participants (Burgess & Wake, 2013; Rodrigue,

Riopelle, Bernat, & Racine, 2013). Researchers use semistructured interview protocols to

encourage participants to discuss individual experiences with a phenomenon (Hohl,

Gonzalez, Carosso, Ibarra, & Thompson, 2014). Using the semistructured interview

protocol provided insights into the strategies corporate leaders use for FCPA compliance

and an opportunity to ask follow-up questions (Burgess & Wake, 2013; Fox, 2010).

Participants

The participant eligibility criteria for this study were that participants must be

executives at a small U.S. aerospace company in California and have at least 1 year of

experience addressing FCPA compliance. Experiences with the research phenomenon

forms the basis of a study’s participant selection criteria (Minis et al., 2014; Moustakas,

1994). My selection of participant criteria aligned with DeFeo (2013) and Shaw,

Robinson, Starks, Burke, and Dillard’s (2013) reports that researchers choose participants

based on members ability to meet described research objectives. Bhakta Bhandari (2014)

and Dennett, Cameron, Bamford, and Jenkins (2014) also indicated that researchers select

participants based on individual knowledge and experience with the studied phenomenon.

The strategy for gaining access to the study participants involved advanced

coordination with one small aerospace organization at which the participants presently

work. The goal was to gain access to the participants through the recommendations of the

public relations executive at the small aerospace company. The intent was to contact

identified members to describe the value of the study and to request participation in the

study. After IRB approval, I contacted candidates via email and sent them the consent

information (see Appendix A). I followed-up with the candidates via email and by phone

and checked on their decision to participate in the study, coordinated their availability,

and collected the signed consent forms from the candidates that were willing to take part

in the study. The step that followed receipt of the participants’ agreement and the consent

forms consisted of coordinating members’ availability for a semistructured interview.

Arendt et al. (2012) and Leedy and Ormrod (2013) explained researchers must go through

a gatekeeper at an organization to gain access to participants. Chikweche and Fletcher

(2012) and Pollack (2015) illustrated that gaining access to corporate gatekeepers is

challenging due to a general mistrust of an outsider and the unwillingness to discuss

sensitive and proprietary data with a stranger. Frich, Røthing, and Berge (2014) and

Nightingale, Sinha, and Swallow (2014) indicated researchers gain access to participants

by ensuring participants’ clear understanding of the purpose of the study and securing

participants’ approval to participate in the study.

Establishing a working relationship with the participants, started by sending the

consent form (see Appendix A) to the participants with detailed information on the

interview process, the objective of the study, and member potential role as a study

participant for approval. A follow up with participants after receiving approval to

participate by signing the consent form took place. After gaining participants’ consent

(see Appendix A) to take part in this study, the objective was to establish a working

relationship with members by reviewing candidates public profiles through professional

networking databases, including LinkedIn and Google search engines. Knowing a

participant’s public profile assisted in identifying common areas of interest, which helped

in the development of working relationships with participants. Researchers conducting

qualitative research must establish a relationship with participants to conduct a successful

study (Turpin, McWilliam, & Ward-Griffin, 2012). Interdependency between partners

must exist for a relationship to exist between such partners (Fournier, 1998; Hughes,

Allen, Doheny, Petsoulas, & Vincent-Jones, 2013). Trust plays a critical role in the

development of a relationship when people experience difficulty assessing the others'

potential for goodwill or harm toward the group (Aamir & Buckley, 2013; Miltgen &

Peyrat-Guillard, 2014).

To accomplish the alignment of the participants with the overarching research

question, participants must meet the eligibility criteria. Participants’ ability to answer the

research questions plays a primary role in candidates selection process (Yin, 2014).

Researchers use the participant selection process to evaluate individuals’ capacity to

understand the phenomenon under investigation (Leedy & Ormrod, 2013). Participant

must be qualified in the field related to the research question and be able to provide

needed information to answer the research question (Maxwell, 2013).

Research Method and Design

Researchers use a methodology in research to understand participants’

experiences with a particular phenomenon (Leedy & Ormrod, 2013; Moustakas, 1994).

Research methodology and design are techniques used to define the research question and

methodology for gathering relevant data to answer a research question (Bowyer & Davis,

2012; Marais, 2012; Yin, 2014). The research methodology and design included

techniques to establish a process for collecting and analyzing data (Cao & Nymeyer,

2013; Leedy & Ormrod, 2013).

Research Method

The qualitative research method was the research method used in the study

because the goal was to understand participant’s perceptions, experiences, perspectives,

and understandings of a particular situation. Stacke (2010) explained researchers use the

qualitative methodology to understand individuals’ perception, personal experience,

perspective, and understanding of a particular situation. Leedy and Ormrod (2013)

indicated researchers use the qualitative methodology when focusing on a phenomenon in

a natural setting. Heffernan, E. Heffernan, and Pan (2014) and Montero-Marin et al.

(2013) noted a researcher uses a qualitative research methodology to understand

participants’ perceptions and experiences with a phenomenon through data and theory.

Researchers use the qualitative method to tell the story of participants’ experience

through careful preparation and execution of a research plan (Bansal & Corley, 2012;

Rowley, 2012).

Doig (2010) conducted a qualitative study to analyze business corruption in

Turkey and considerations for admitting Turkey into the European Union. In the study,

Doig noted the slow reform in revising corruption laws and the continuing presence of

governmental corruption in Turkey. Luiz and Stewart (2014) performed a qualitative

study of African public responses to public service corruption when policymakers

adopted a public service anticorruption strategy in South Africa in 2002. Agbiboa (2012)

conducted a qualitative study to investigate the relationship between corruption and a

country’s development. Zuofa and Ochieng (2014) used the qualitative methodology to

study project failure and concluded that a direct link exists between project failures and

corruption in Nigeria. Doig (2010), Luiz and Stewart (2014), and Agbiboa (2012)

employed a qualitative methodology to analyze participants’ perception of the meaning of

a situation or an event. The qualitative studies performed by Doig, by Luiz and Stewart

(2014), and by Agbiboa (2012) had the same context as the study. Therefore, the

qualitative research method was deemed suitable for this study.

The quantitative methodology was not appropriate for this study because the

approach would not address the lived experience of the FCPA participants, nor the

examination of relationship between variables required in this study. Researchers use

quantitative research to measure the relationship between variables numerically (Leedy &

Ormrod, 2013). Researchers use the quantitative methodology when seeking to analyze a

hypothesis or to examine one or more variables of interest (Gelei & Dobos, 2014; Macur,

2013). Caruth (2013) indicated qualitative researchers often claimed that quantitative

researchers use simple descriptions and immaterial hypotheses. Allwood (2012) reported

the distinction between quantitative and qualitative methods is problematic when

attempting to separate methods by using the data collection process, studied phenomena,

and the philosophy of the research.

The mixed methods methodology was not suitable because the goal was to

understand the participants’ perceptions of FCPA compliance. Researchers conduct

mixed methods research when a combination of elements from a qualitative and a

quantitative approach is necessary to provide a picture of a particular phenomenon

(Leedy & Ormrod, 2013). Caruth (2013) explained the mixed methods methodology

evolved to address the limitations of the individual qualitative and quantitative methods.

Venkatesh, Brown, and Bala (2013) indicated researchers use mixed method design to

complete, expand, confirm, and obtain opposing views of the same experience. Through

the interviews conducted during this study, the goal was to gain sufficient information to

determine the participants’ FCPA compliance strategies and experiences.

Research Design

Given the selection of a qualitative methodology, using a single case study design

for this research was appropriate because the objective of this study was to identify the

FCPA compliance strategies used by executives at one small U.S. aerospace company in

California. Researchers use a research design and methodology to establish the

techniques for collecting and analyzing data (Leedy & Ormrod, 2013). Case studies

consist of in-depth data gathering about programs, companies, events, or individuals to

learn about poorly described or poorly understood phenomena (Leedy & Ormrod, 2013).

Chambers et al. (2013) noted researchers use a case study when the goal is to get beneath

the surface of policy implementation, challenge current thinking, and reconstruct

understanding. Jones (2012) indicated researchers use a single case study when the

primary research data consist of concepts used by study participants in the field where the

researcher wants to know the participants’ level of understanding. The identification of

FCPA compliance strategies involved collecting data using in-depth interviews with

employees of one California aerospace company. For this study, ethnography,

phenomenology, and case study design options received consideration.

The ethnography design was not suitable because the plan for this study was to

identify strategies and not observe participant interactions. Ethnography involves lengthy

planning, early engagements, fieldwork trips for group observations, exploring the

settings, and multiple cultural interactions (Simpson, Slutskaya, Hughes, & Simpson,

2014). Marshall and Rossman (2016) indicated ethnography researchers study groups in a

natural environment for long periods, although due to advancements in technology,

Internet ethnography and multimodal inquiries are possible. Ethnography is a style of

research used to understand the activities of people in a given setting, and ethnography

enables fuller social experiences (Simpson et al., 2014).

The phenomenological design was not suitable for this study because the focus of

the design was not to understand aerospace executives’ perceptions of the meaning of a

particular phenomenon, but documenting aerospace executives’ understanding of FCPA

compliance. Phenomenological design involves lengthy interviews and a focus on

understanding participants’ perception and perspective and the meaning of a particular

event (Leedy & Ormrod, 2013). Researchers use a phenomenological research method

when studying the essence of participants’ experience (Moustakas, 1994). Tomkins and

Eatough (2013) defined the phenomenological design as the process a researcher uses to

understand participants’ experiences with a particular phenomenon.

Data saturation in this study took place through the interviews with leaders across

an organization and by asking participants follow-up questions during the interview to

ensure the gathering of sufficient data on the research topic. Coenen, Stamm, Stucki, and

Cieza (2012) defined data saturation as the point during data gathering that indicates two

similar ideas from two consecutive individual interviews, but reveals no additional new

information from previous interviews. Goffin, Raja, Claes, Szwejczewski, and Martinez

(2012) indicated researchers reach saturation when no new categories or groupings are

surfacing during participant interviews. Keyvanara, Karimi, Khorasani, and Jazi (2014)

and Guzys, Dickson-Swift, Kenny, and Threlkeld (2015) asserted researchers reach data

saturation when no new categories, new coding, or new information occurs, and if a study

replication takes place, the results will be the same.

Population and Sampling

The study population consisted of leaders of small U.S. aerospace company in

California operating in the international market. The population was representative of the

aerospace industry in California, which handled over one third of the $95.5 billion

aerospace exports from the United States in 2012 (Aerospace Industry Association, 2012;

Kyser Center for Economic Research, 2012). Manerikar and S. Manerikar (2013) defined

population as the total group of people, things, or events a researcher desires to

investigate.

The purposeful sampling method was the procedure used for the study. The plan

was to select five to seven executives purposefully from one company for members’

aerospace experience, international business experience, industry knowledge, and

realworld experience with FCPA compliance. Researchers use purposeful sampling to

understand an experience from the participants’ point of view (Leedy & Ormrod, 2013).

Purposeful sampling involved selecting a sample to access research participants using the

criteria guided by the research purpose and conducting an in-depth exploration of rich

sources of information (O. Asst & Asst, 2014; Zeldenryk, Gray, Gordon, Speare, &

Hossain, 2014). Hanson, Stephens, Pangaro, and Gimbel (2012) indicated researchers use

the purposeful sampling method to maximize diversity in a study.

Participants in the study were seven executives responsible for FCPA compliance

in one small aerospace company in California. The research problem, research purpose,

and eligibility criteria for such participants strongly influence researchers’ selection of the

participants (Leedy & Ormrod, 2013). Petit (2011) had one participant in a case study of

police corruption in New York. Kramer’s (2009) case study of eliminating fraud

consisted of one participant. Choudrie and Culkin (2013) conducted eight face-to-face

interviews in a qualitative case study of innovation diffusion. Zuofa and Ochieng’s

(2014) analysis of the failure of Nigerian infrastructure projects had eight participants.

Aloysius (2013) used five international students to study the perception of empowerment

among international students at Putra University in Malaysia. The average number of

participants identified in the five studies was five. Based on the five examples having the

same context as the study, five to seven small business executives with FCPA

responsibilities at an aerospace company in California were suitable for the study.

I achieved saturation in the study by gathering sufficient data from participants

using open-ended questions and follow-up questions. A sample size in qualitative studies

can be much smaller than in a quantitative study and still achieve saturation (Marshall et

al., 2013). Data saturation occurs at the point at which the gathered data and analysis

from two consecutive individual interviews reveal no additional information to the same

question (Coenen et al., 2012). In qualitative research data, saturation occurs when no

new information or categories emerge in the responses to interview questions (Horter et

al., 2014). Data saturation occurs when participants provide similar answers to the same

interview questions (Goffin et al., 2012).

The basis for the selection criteria for the seven study participants was the

participants must be executives at a U.S. aerospace company in California and must have

established a successful compliance strategy for the FCPA. The seven interviews took

place in a conference room setting to ensure the comfort, safety, and privacy of

participants. The selection standard was appropriate because participants’ direct

involvement with the FCPA provides members the ability to answer the research question

and give insights on members’ strategies to comply with the FCPA. Researchers select

interview locations to provide a quiet area with minimal distraction that is comfortable,

safe, and a relaxed environment (Kitchen, 2013). Hanssen (2012) reported a link in

qualitative studies between the interview setting and question limitations concerning the

need for data comparison, interview findings, and the reluctance of expressing contrary

opinions to strangers. Nwagwu and Igwe (2015) indicated researchers select interview

locations based on ease of access to participants, the safety of participants, and

availability of resources needed for the interview.

Ethical Research

The informed consent process consisted of sending participants the consent form

(see Appendix A) for review and signature before interviews began. Getz (2014)

emphasized the consent form must be simple, be easily understandable, and address the

demographics of participants. The consent form should include (a) the reason for the

study, (b) the involvement of participates, (c) how long the participant will be in the

study, (d) the risks of the research, (e) the benefits of taking part, (f) other options, (g)

confidentiality, (h) the costs involved, and (i) the rights of the participant (Wright, 2012).

Participants should receive the informed consent form after accepting an invitation to a

study and sign the form before beginning the interview (Leedy & Ormrod, 2013). The

process of collecting the signed consent form occurred before the interview begins.

Participants can withdraw from the study or interview without reason through

email, phone, mail, or other communication methods (Tam et al., 2015). Researchers

should inform participants of the option to withdraw from the research (Rasmussen &

Berntsen, 2014). Participants can withdraw from a study without penalty or the need to

give a reason for withdrawal (Abdelhamid et al., 2012). The participants did not receive

an incentive or payment for participating.

Measures to provide adequate ethical protection for the participants throughout the

study include (a) obtaining from participants a signed informed consent to participate, (b)

ensuring data do not include personal information, and (c) not modifying participants’

responses to give better results. The intent was to ensure no harm comes to participants

because of candidate participation in the research. Durham et al. (2014) and Rothstein

(2013) indicated the protection from harm for study participants includes respect for

participants, autonomy, and protection of defenseless populations, beneficence, and

justice. Researchers must ensure no physical or psychological harm comes to participants

because of members’ participation in a study (Leedy & Ormrod, 2013). Boutin-Foster et

al. (2013) indicated researchers extend ethical considerations to participants, including

safety, respect for autonomy, facility space, and sufficient time for conducting the

research.

One of the objectives for the consent form was to protect the anonymity of the

source of the information obtained during the interviews before the interview begins (see

Appendix A). The purpose of the consent form was to ensure no harm would reach

participants because of members’ involvement in the study. Individuals receiving the

consent form understood the study risks and expectations before deciding whether to take

part in the study, and the structure included background information on the FCPA and

compliance. The consent form included information on the procedures, invitation to

participate, the voluntary nature of the study, payments, privacy, contact information, and

the statement of consent.

Agreement documents included an invitation for cooperation (see Appendix C).

The letter of cooperation consisted of an overview of the study and the permission

process from the approving executive at one U.S. aerospace company to use employees

from the company for the study. After the approving manager at the U.S. aerospace

company gave permission to use the company for this study by signing the permission

letter (see Appendix D), the process of scheduling the interviews with the participants

took place. The participant consent form (see Appendix A) contained the background

information on the study, an invitation to participate, interview procedures, risks,

benefits, and consent to participate in the study.

Collected data will remain in a secured file cabinet at the home office for 5 years

to protect participants’ confidentiality. Full control over the collected data included

maintaining the gathered data in a locked cabinet at the home office. The plan was to

safeguard the names of the participants and the organization participating in the study by

the assigned seven different letters to the seven members and a numeric code for the

company.

Data Collection Instruments

In the study, I was the primary research instrument and collected data by

conducting semistructured interviews with seven aerospace participants at a single

aerospace company in California. Data included participants’ data collected through

interviews, the company’s FCPA compliance strategy directives, and personal journaling

data. Thompson et al. (2013) claimed that Internet technology reduced data collection

costs, but also reduced the reliability of responses, so I did not use Internet-based data

collection. Using simplicity, flexibility, data quality, timeliness, and acceptability might

help researchers to improve a study’s data collection process (Heidebrecht et al., 2014).

Researchers can improve the data collection process by clearly communicating the

purpose of the data collection to the participants (Iqbal et al., 2012); therefore, the

informed consent form included a description of the study purpose and data collection

process.

Semistructured interviews using open-ended questions (see Appendix E) were the

primary data collection technique. As the researcher, I was the instrument in this

qualitative study, and the bulk of the data collection was dependent on my level of

involvement, as noted by Leedy and Ormrod (2013). Data collection involves informal

interactive discussions with open-ended questions and comments (Moustakas, 1994).

Data collection included interviews of participants, which is a method frequently

employed to collect data for qualitative studies (Anyan, 2013). Carcone, Tokarz, and

Ruocco (2015) and Knudsen et al. (2012) indicated researchers use semistructured

interviews to improve the validity and reliability of the research results. The data

collection process in qualitative research consists of collecting data from a limited

number of participants that provide information on the phenomenon under study (Leedy

& Ormrod, 2013).

I reviewed company directives related to the FCPA compliance process,

maintained a paper journal to document the research activities, and took related notes

during the study. The journal included the notes taken during the interviews. During the

interviews, the process of capturing data included the planned use of two audio tape

recorders and handwritten notes. A planned expert review of the set of open-ended

semistructured questions served to validate the interview questions. The collected data

consisted of responses to the interview questions (see Appendix E) developed to answer

the research question.

I enhanced the reliability and validity of collected data by conducting an expert

review of the interview questions, member checking, and triangulation of data.

Researchers often use triangulation to enhance the reliability of gathered data and

improve the validity of the study (Houghton, Casey, Shaw, & Murphy, 2013; Mysen,

2012). Using a qualitative case study enhances validity by controlling study factors,

including scenario settings that are difficult to control in other research approaches

(Hodge, Oppewal, & Terawatanavong, 2013). Data collection reliability refers to the

consistency of the results when the measured entity remains the same (Leedy & Ormrod,

2013).

The study included an expert’s review of the interview questions to enhance the

reliability and validity of the data collection instrument. Reliability includes the

validation of the study conclusion and the trustworthiness, relevance, conformability, and

credibility of study results (Otieno-Odawa, 2014). Researchers perform reliable and valid

research when investigators conduct expert’s reviews (Moustakas, 1994). The validity of

research refers to the accuracy, meaningfulness, and credibility of the results (Leedy &

Ormrod, 2013). Aust, Diedenhofen, Ullrich, and Musch (2013) showed that a significant

number of participants increase validity in a study, and increasing rigorous checks

improve validity. Martirosyan, Markhorst, Denig, Haaijer-Ruskamp, and Braspenning

(2012) reported an expert’s review identifies quality indicators used to develop questions

for a larger group of participants. Frolic et al. (2013) used an expert’s review to identify

trends, themes, and organizational challenges and to assist in an efficient rollout of the

survey to more participants. The expert review began after the study received Institutional

Review Board (IRB) approval, after which I adjusted the interview questions.

Conducting member checking enhances the reliability and validity of the data

collection process. After reviewing the interview data, I sent the individual interpretations

of the interviews to the participants to ensure the accuracy of the descriptions, as

suggested by Awad (2014) and in alignment with Li et al. (2013) and Goldman et al.

(2014).

The interview protocol (see Appendix B) describes the steps taken with the

individual participants during the face-to-face interviews. The use of an interview

protocol aligned with instructions by Briggs and Murphy (2011), Brown et al. (2013), and

De Ceunynck et al. (2013). Briggs and Murphy (2011) maintained that an interview

protocol should include a collaboration process to discover and evaluate research goals.

De Ceunynck et al. (2013) indicated the interview protocol structure includes a

consideration of respondents’ decision-making processes when answering interview

questions and includes measures for risk and bias of interviewer interpretations of the

responses given by participants. Brown et al. (2013) reported interview protocols

emphasize the elicitation of as much information as possible during the interview to

establish rapport with participants and provide clear guidelines for the interview.

Data Collection Technique

The research question for this study was as follows: What are the strategies that

U.S. aerospace small business leaders use to comply with the FCPA? The primary data

collection technique selected to answer the research question was semistructured

interviews, which was combined with research on the company’s FCPA compliance

strategy directives and personal journaling data. Using semistructured interviews does not

bias participants’ responses to open or closed-ended questions (Covell, Sidani, & Ritchie,

2012). Semistructured interviews provide reliable data, and researchers using

semistructuresd interviews acquire a deep understanding of participants’ experiences

(Marshall & Rossman, 2011). Irvine, Drew, and Sainsbury (2013) suggested using

semistructured interviews to encourage interviewees to elaborate on what members said.

I interviewed seven participants that handle international business in one small

aerospace company in California. During the meetings, the plan was to ask participants

the open-ended interview questions and potential follow-up questions during the

semistructured interviews. Irvine et al. (2013) showed interviewees in semistructured

interviews could ask answers during the interviews. At the end of the interviews, the data

collected included recorded data, corporate documents, informed consent documents, and

personal journal notes. Alfonso, Nickelson, and Cohen (2012) used brief interview

questions in a case study on farmers’ markets in rural communities. Researchers

frequently conduct case studies in social science research to answer how and why

questions regarding situations over which researchers have limited control over the

outcomes (Ranjbarfard, Aghdasi, Albadvi, & Hassanzadeh, 2013). Colombini, Mayhew,

Ali, Shuib, and Watts (2013) and Sylvain and Lamothe (2012) noted researchers using a

case study method should employ interview questions and follow-up questions to explore

constructs, patterns, and interrelationships of the collected data.

Phone and email were the communication methods used to confirm the

executive’s intent to participate in the study and to coordinate the executive’s availability.

Participants received my contact information, including a phone number and email

address, at the beginning of the study. Communications with participants via email and

phone calls continued until the completion of the study.

I reserved the meeting room by coordinating with the sponsoring executive one

week before the interview date. Some participants elected to have the meeting take place

at the candidate’s office, and no room reservation was required. The process of securing a

hotel near the interview location took place after confirming the interview date.

I arrived in California one day ahead of the interview date and check into a hotel

near the interviews location. The next day, one hour before the first scheduled meeting,

the preparation of the conference room started by locating the power outlets and setting

up the two tape recorders and the laptop computer. Conference room table clearing

occurred except the consent forms that still needed signatures.

Greeted the participant upon arriving at the interview location and initiated a

general conversation that helped to make the participant comfortable. After greeting the

participant, I provided members with an overview of the interview process and collected

the signed consent forms. At this point, I turned on the two tape recorders and the

interview began by asking the first question. After the participant answered the first

question, additional clarification questions took place.

After the participant provided an answer to the first question and related followup

questions, the second interview question occurred. The process continued until the

participant responded to the interview questions. At this point, I informed the participant

that the interview was over. A repeat of the interview process took place with the seven

participants. Gathering the tape recorders, laptop computer, and notes taken during the

interviews completes the seven interviews. Documents collected during the data

collection process include interview audio tapes, company’s FCPA compliance strategy

directives, and personal journaling data. The review process included the three collected

documents data during the study. The advantage of the onsite interview technique

included costs borne by the researcher, timesavings with little interruption of participant

work schedules, elimination of travel time for participants, and opportunities to ask

follow-up questions. The disadvantages of the onsite interview technique included a limit

on the number of participants and the possible increase of participant stress levels.

Participants’ limited recollection of FCPA experiences meant participants needed to

prepare for the interview beforehand. Researchers can tape record onsite interviews,

which results in more accurate accounts of the phenomenon under study (Fullerton,

McGettigan, & Stephens, 2010; Kotlarsky, Scarbrough, & Oshri, 2014). Transcribing

interviews enabled the removal of superfluous information such as repetitions (Kotlarsky

et al., 2014). Researchers conducting face-to-face interviews have the opportunity to

record the interviews, observe participants’ physical expressions, and take field notes, but

this process may increase participants’ tensions (Schäffler et al., 2014). Researchers

conducting onsite interviews control the shift of power and record and transcribe

interview data; however, onsite interviews limited the number of participants (Laukner,

Paterson, & Krupa, 2012).

The advantage of obtaining and reviewing the company directive related to FCPA

compliance served as a comparison tool to validate the answers to the interview questions

and the credibility of the responses. The disadvantages may be discrepancies between the

participant’s responses and the corporate directive that would require additional

interviews and therefore lengthen the time needed for the research. Company regulations

include the company’s anticorruption FCPA compliance process that executives must

follow when conducting international business (Jorge & Basch, 2013). Leaders of

corporations develop self-regulation and anticorruption strategic directives to ensure

compliance with the FCPA and to use as a defense against any major bribery legislations

(Lord, 2013). Corporate FCPA compliance guidelines provided a coherent description for

employees that served as the code of conduct staffers needed to follow within the country

in which organization members operated (Klinkhammer, 2013).

The advantage of using a personal journaling technique includes improving the

recollection of events, filling the gaps in the literature, reducing discrepancies, reducing

the author’s potential misinterpretations of the responses gathered during the interview,

and achieving data triangulation. The disadvantages of writing a personal journal

included possible distractions during the meetings and the additional time needed to write

the personal journal. A researcher uses personal notes, including personal experience, to

fill the gaps in the literature and to clarify ideas of different elements in the research

process (Lamb, 2013). Researchers use personal diaries and reflexive journals to disclose

personal experiences, including seeing, understanding, and interpreting events (Aguilar

Delgado & Barin Cruz, 2014). Researchers use a personal journal to stimulate the

reflection and awareness of personal experiences during the research process (Starr-

Glass, 2014).

I enhanced the reliability and validity of the data collection process by conducting

an expert review after receiving IRB approval. The outcomes of the expert review

assisted in improving the validity, reliability, and level of understanding of the interview

questions. The expert review helped to ensure the answers to the open-ended questions

provided valid and reliable data (Leedy & Ormrod, 2013). Researchers conducting expert

review can tailor interview questions to improve the efficient use of interview time and

validate interview questions (Frolic et al., 2013). Clyne et al. (2013) conducted expert

review of eight participants to validate the process of prescribing medication to older

patients.

The expert review involved surveying four aerospace participants experienced in

international markets. The four participants had 20 or more years of experience as

aerospace contractors leading international business activities. Identified participants had

a postgraduate credential and had experience in interpersonal communications. The

expert review consisted of the following steps: (a) obtained IRB approval, (b) contacted

four aerospace participants via email and telephone to explain the expert review process

and expectations, (c) sent the expert review questions to the four aerospace participants,

(d) followed up via email or phone and answer questions the expert review participants

present, (e) collected executive’s suggested changes and comments for improving the

interview questions, and (f) updated the interview questions based on the expert review

results.

Member checking occurred after completing the seven semistructured interviews.

Member checking is a quality control process researchers use to verify the accuracy of

collected data during or after the interview (Harper & Cole, 2012). Member checking was

the process of checking researchers’ interpretations of interviews with participants for

accuracy (Harper & Cole, 2012). Awad (2014) and Andrasik et al. (2014) described

member checking as the process used by researchers to confirm with participants the

researchers’ interpretation of the data provided during interviews.

Davidson et al. (2012) concluded member checking involves coordinating a

researcher’s interpretations of interview results with participants to validate the

researcher’s interpretations. Li, Westbrook, Callen, and Georgiou (2012) noted member

checking is the process of clarifying interview interpretations with participants. Reilly

(2013) illustrated member checks help to ensure credibility by providing participants the

opportunities to challenge data interpretation and to correct errors. Kim, Kim, Han, and

Chin (2015) reported researchers use the member-checking process to ensure the quality

and interpretations of collected data are in agreement with understandings of the

participants.

Data Organization Technique

Data organization involved using an electronic data filing system to organize

study data for ease of retrieval and data analysis. The data support documents filed

electronically included (a) consent form, (b) invitation for cooperation, (c) permission

letter, (d) interview protocol, (e) interview questions, (f) interviews transcripts and

analysis, (g) corporate directives related to FCPA compliance, (h) copy of all cited

articles, and (i) reflective journal. A removable data storage device with password

protection ensures data security. The data remains in a locked file cabinet located in the

home office for 5 years after the completion of the study. After the 5th year, I will

remove the collected data from the storage device and delete the data permanently to

protect participants’ confidentiality.

Basurto and Speer (2012) explained researchers’ efficient organization and

analysis of collected data helps to answer research questions. Vernon-Dotson (2013)

asserted that during a qualitative case study, researchers perform numerous data

organization and analysis techniques to improve the quality of the research. Lawrence

and Tar (2013) illustrated researchers use the coding method in data organization to

group similar concept into categories and subcategories to facilitate answering the

research question.

Data Analysis

Data analysis in a qualitative study starts with organizing the collected

information, followed by data perusal, classification, and synthesis (Leedy & Ormrod,

2013). Mugarura, Slobogean, and Bouchard (2014) indicated the data analysis process

involves the emergence of overarching themes from participants’ interview transcripts

and other collected data from the study. Haanstra et al. (2013) indicated data analysis

includes category development and coding recurring themes. Analyzing qualitative data

involves organizing, perusing, and identifying general themes and integrating and

summarizing the data to the reader (Leedy & Ormrod, 2013). The data analysis process

used thematic analysis, including methodological triangulation, to identify key themes

was used to examine data in the study.

Using thematic analysis including methodological triangulation of key concepts

from three data sources contributed to the quality of conclusions by verifying the findings

through the concurrence of data collected from three resources. Through triangulation, I

identified categories and themes using multiple resources. This process aided in

interpreting the research evidence and supported the study conclusions. Torrance (2012)

indicated the four essential forms of triangulation are data triangulation, investigator

triangulation, theoretical triangulation, and methodological triangulation. Triangulation is

a data analysis technique used in qualitative case studies to compare data from different

sources to ensure the accuracy of research results while supporting data validity and

reliability (Othman & Rahman, 2014; Street & Ward, 2012). Triangulation was the

process of using multiple data sources and applying multiple perspectives to the

phenomenon under study (Homburg, Klarmann, Reimann, & Schilke, 2012; Lin et al.,

2013).

Two audio recordings captured the interview data and recorded information

transcriptions in Microsoft Word documents after the seven interviews were completed.

Study data included coded transcripts, detailed notes, the journal, and corporate

documents. The member checking process commenced after data collection using the

interpretation of the interview data. After member checking was complete, the thematic

analysis including methodological triangulation of key concepts from three data sources

began, which involved triangulating the interview data, corporate directives, and the

journal themes. Additionally, I identified and documented the common strategies used in

small aerospace companies to comply with the FCPA.

This study included the analysis of compiled data from seven participants’

interviews using NVivo software tools to organize the research data and establish a data

traceability matrix. General coding, theme identification, data relationships, annotations,

and linked data sets of the study’s evidence accomplished by using the NVivo software

thematic analysis including methodological triangulation. Basurto and Speer (2012)

maintained coding would help data reliability because the researcher can organize coded

data in an efficient and useful manner. After sorting and categorizing the data, I used

NVivo to identify common themes, analyze the themes, and establish the strategies to

answer the research question.

Coding and classifying qualitative data increases validity and facilitates the

analysis of collected data (Habib, Etesam, Ghoddusifar, & Mohajeri, 2012). Lawrence

and Tar (2013) indicated coding is the process of naming and categorizing phenomena

through a close examination of collected data. Sánchez-Algarra and Anguera (2013)

emphasized coding provides coherence to the flow of events or phenomenon behavior.

Line-by-line coding of the answers obtained from study participants’ responses to the

interview questions served to establish categories and themes (Klassen et al., 2012).

Habib et al. (2012) noted using NVivo software in qualitative data analysis increases the

reliability and validity of study results. One of the tasks was to triangulate the themes

generated by the NVivo software.

Using the themes identified through NVivo data analysis, triangulation of the data,

and additional literature search data enhanced the focus on the central topics and the

conceptual framework of the study. I concentrated on the main categories and compared

identified groups with the literature review, journal notes, and corporate documents

before sending the interview analysis results to the participants. The study included

changes received from the participants that resulted from the member checking process.

Andrasik et al. (2014) asserted researchers conduct member checking to improve the

accuracy of collected data, resolve misinterpretations of gathered information, resolve

disagreements in codes, and identify new themes. Goldblatt, Karnieli-Miller, and

Neumann (2011) referred to member checking as the process of participants verifying the

research findings to improve the data accuracy and credibility of the study results. Li et

al. (2013) reported member checking involves analyzing the transcribed responses to the

interview questions and coordinating the researcher’s interpretations of the results with

participants to ensure data accuracy.

Reliability and Validity

Reliability relates to the ability of a measuring instrument to yield consistent

results when the measured entity stays the same, and validity refers to the accuracy of the

research findings (Leedy & Ormrod, 2013). Reliability refers to the extent of the

consistency of the measurements by an instrument (T. J. Hess, McNab, & Basoglu,

2014). Validity consists of the internal validity of the outcome and the external validity of

the results of an experiment (Jackson, 2012).

Reliability

Reliability is the consistency with which researchers measure the results of an

instrument when the entity measured is constant and with additional changes (Leedy &

Ormrod, 2013). Triangulation improves the reliability of collected data through a

comparison of interpretations and facts from different sources converging on the same

event (Street & Ward, 2012). The reliability of the collected data obtained by asking

precise open-ended questions increases the integrity of the investigation and the

applicability of the findings (Cook, 2012; Leedy & Ormrod, 2013; Street & Ward, 2012).

I addressed dependability in the study through member checking, triangulation,

and an expert review. To ensure the data collection process, instrument, and study were

dependable and reliable, the procedures followed involved (a) ensuring the focus of

interview questions and follow-up clarification questions answered the research question;

(b) ensuring interview questions were accurate, simple, and clear; (c) using an expert

reviewer to validate clarity, understanding, and desired outcomes; (d) comparing the

interview data to the interview questions; (e) conducting multiple reviews of data

including cross checking journal notes and interview data; and (f) using NVivo software

for data analysis. Researchers achieve dependability of collected data by using NVivo

software to provide clarity on repeated themes of researcher inquiries (Lancaster et al.,

2013). Using NVivo query tools to audit findings guards against rare discoveries that

happen to suit a researcher’s potential preferred argument, and maintaining a reflective

diary enhances study dependability (Houghton et al., 2013). Elo et al. (2014) referred to

dependability as the stability of collected data over time and under different situations.

Söderholm and Norrbin (2014) described dependability as the ability to perform the task

as needed and when needed.

Validity

Validity refers to the accuracy, credibility, and meaningfulness of a research study

(Leedy & Ormrod, 2013). Achieving validity involves establishing sufficient controls to

ensure collected data will support the study conclusions and the study results generalized

beyond the research context (Leedy & Ormrod, 2013; Morgan-Thomas, 2012). Validity

entails the internal validity and external validity (Jackson, 2012; Yin, 2013).

Researchers ensure the credibility of collected data by reaching saturation,

demonstrated through evidence of recurring themes throughout the developmental

process (Ashworth, 2012). Nordhagen et al. (2014) illustrated three forms of credibility:

professional credibility, public credibility, and personal credibility. Henry (2012)

indicated the credibility of a case study increases by triangulating data from multiple

sources. In this study, I focused on professional credibility, which included academic and

nonacademic research credibility.

To improve the credibility of the study, I triangulated the data collected from

participants’ interviews, against the company’s directives, and the personal journal

developed during the study. Triangulation involves comparing data from different sources

to ensure the accuracy of research results and contributes to the reliability, credibility, and

validity of collected data (Othman & Rahman, 2014). Triangulation is the process of

using multiple data sources and multiple perspectives for a phenomenon under study to

arrive at conclusions to a research question (Leedy & Ormrod, 2013; Lin et al., 2013).

Kapoulas and Mitic (2012) indicated researchers use data triangulation to increase the

credibility, validity, and quality of the research.

To attain transferability, the FCPA compliance strategies identified must apply to

other companies. As the FCPA affects all U.S. individuals and corporations, part of the

identified FCPA compliance strategies could be transferable to other organizations or

industries. Järvensivu and Törnroos (2010) defined transferability as the process of

transferring the study results to other situations. Järvensivu and Törnroos also indicated

transferability can be partial and requires testing the resulting framework application in

another context to explore the potential for transferability. Due to time limitations, I did

not anticipate the need for transferability testing in the study. Detailed results of interview

transcripts and a literature search enhance the transferability of study results (Houghton et

al., 2013). The integrative review of literature related to a topic and that draws similar

conclusions from different studies improves the transferability of research results (Leon,

Lewin, & Mathews, 2013; Moustakas, 1994). Knies et al. (2012), Perrier et al. (2014),

and Malterud (2001) described transferability as the extent of study findings’ applications

beyond the scope of the study. In this study, the transferability of identifying FCPA

strategies used by aerospace executives to all U.S. industries left to the reader and future

researcher to determine.

Establishing confirmability in the study involved tape recording the interviews,

taking notes during the meetings, and obtaining participants’ feedback regarding the

accuracy of the interpretation of the collected data. Researchers can ensure confirmability

throughout a study by taping the conversation, taking notes, and asking participants to

examine the accuracy of collected data transcripts (T. R. Wilson, Birks, & Alexander,

2013). The confirmability of a study refers to the accuracy of collected data and neutrality

of the researcher during the collection and analysis of collected data (Houghton et al.,

2013). The confirmability process secured the neutrality of the researcher and the

accuracy of the data (Marshall & Rossman, 2011; T. R. Wilson et al., 2013).

I ensured that saturation occurs before concluding the participant interviews by

looking for the point at which no new themes or new data are surfacing in participants’

answers to interview questions. Data saturation occurs at the point in which data collected

from two consecutive interviews reveal no additional information on the same issue

(Coenen et al., 2012). Anyan (2013) explained that during data collection, power between

the interviewers and interviewees shifts; however, interviewers must learn how to control

this power shift to reach data saturation during the interview. Guzys et al. (2015) and

Ruijs et al. (2012) asserted data saturation occurs when no new categories, new coding, or

new information emerges. Data saturation occurred during data collection when all the

participants’ answers to the same question are comparable (Coenen et al., 2012).

Marshall and Rossman (2011) indicated that to reach saturation, researchers must

conduct additional interviews with participants. Researchers achieve data saturation when

new data reveal less than 5% new categories (Mueller, Schuster, Strobl, & Grill, 2012). In

qualitative research, saturation occurs when no new information or a limited number of

categories emerge from case study interview responses (Goffin et al., 2012).

Transition and Summary

Section 1 included the study purpose, my role regarding designing the research

interview process, interview questions, and participant selection. This section included

information about obtaining permission from a company executive to perform the study,

obtaining consent from participants for the interview, setting up interviews, and

informing participants of the participant’s rights. Section 1 also included a discussion of

the critical issue of preventing harm from coming to participants due to participating in

the study and validating research data.

Section 2 included a description of the research design and the research method

selection, as well as the rationale for selecting the method. The section also included a

description of the research population and participant selection criteria. Other topics

included data collection techniques, data organization, data security, data analysis

methods, dependability, credibility, transferability, confirmability, data saturation,

validity, and the final presentation format.

Section 3 included the application of study results to professional practice and

implications for social change. Section 3 includes an overview of the study, the

presentation of data, findings, applications of the results of global management

professional practice, and social change implications. Finally, Section 3 includes a

recommendation for action, recommendation for further study, reflections on personal

experiences during the study, a summary, and research conclusions.

Section 3: Application to Professional Practice and Implications for Change

Introduction

This section presents the findings of the study. The problem that I addressed in

this study is that U.S. aerospace companies must operate competitively in the global

market and comply with the FCPA, but enforcement of the FCPA by the U.S.

Department of Justice does not occur in international settings for non-U.S. companies.

The specific business problem is that some U.S. aerospace small business leaders lack

strategies to comply with the FCPA.

This section includes the results of the data collected from seven small aerospace

executives experienced with the FCPA compliance in California. The section also

includes the themes that surfaced from semistructured interviews conducted with the

seven participants described, and I illustrate how these ideas apply to the aerospace

industry professional practice and the implications for social change. In addition, I

suggest recommendations for future studies that would complement these research

findings. Finally, I reflect on my experience as a researcher, indicate how this process

influences my way of thinking, and describe potential bias that may have influenced the

study.

The purpose of this qualitative, single case study was to explore the strategies that

U.S. aerospace small business leaders use to comply with the FCPA. The population of

this study was seven executives at a small aerospace company in California. The

overarching question guiding this study was: What strategies do U.S. aerospace small

business leaders use to comply with the FCPA? By interviewing the seven company

executives from the small aerospace company, I was able to identify and gain in-depth

understanding of successful strategies that small aerospace companies use to comply with

the FCPA.

The research data were primarily captured during semistructured interviews that I

conducted with seven executives at a small U.S. aerospace company based in California.

These interviews showed that the participants were experienced in international business

and with the FCPA compliance. The seven executives responded to both open-ended

questions (see Appendix E) and follow-up clarification questions. I used two tape

recorders to capture the executives’ answers and took additional notes during these

meetings.

I used thematic analysis including methodological triangulation of key concepts

from all collected data, including interview data, interview notes, a personal journal, and

corporate directives. Four themes emerged from the research: (a) the importance of

continuous FCPA compliance training; (b) interactive management; (c) compliance with

cultural norms, policy, and FCPA; and (d) qualifying for FCPA compliance. Through this

study, I offer insights on how to establish effective FCPA compliance strategies that

account for the cultural norms and maintain compliance with local laws. These findings

are intended to positively influence social change by reducing the costs of doing

international business, potentially creating new jobs and improving the quality of life for

individuals and communities.

Presentation of the Preliminary Findings

In this section, I present the data collected related to the semistructured interviews

with participants presented, interview questions tested through expert reviews that

resulted in no recommended changes, and semistructured interviews conducted and

openended questions asked during the semistructured interviews. I coded the obtained

data from all resources using NVivo software. The following paragraphs include the

findings of the data analysis.

The data collection processed included collecting answers to the open-ended

questions that I asked in the seven interviews, personal notes I took during the meetings

and samples of corporate directives collected during the interview. The data collection

also included member-checking inputs and my personal journal data collected throughout

the study. The study involved extensive research on literature related to compliance with

the FCPA, identification of Candidate Company for analysis, conducting interviews with

participants, and analyzing all collected data to explain successful strategies used by a

small aerospace company to comply with the FCPA.

I used findings from semistructured interviews to identify successful strategies a

small aerospace company uses, which provide the basis for compliance with the FCPA.

After semistructured interviews, data collected during these interviews was electronically

transcribed using TranscribeMe through NVivo. Uploaded transcribed interview data into

NVivo led to developing nodes or themes. I input these topics into NVivo by reviewing

transcribed interview data, assigning a theme for each appropriate answer or sentence

related to the research question. The result was a complete list of all themes created by

the NVivo software, as well as consolidation of similar ideas into four main general

themes.

I uploaded other collected into NVivo including company policy for FCPA

compliance and data from my personal journal. Data triangulation of gathered data from

the seven interviews, company policy for FCPA, and my personal journal validated the

four main themes. NVivo software facilitated the organization of collected data and

themes, and it allowed me to explore and analyze collected data.

The interview questions developed for this research were suitable for exploring

and eliciting data consistent with the FCPA compliance strategies used by small

aerospace companies to achieve satisfactory compliance with the FCPA. Each interview

lasted approximately 25 to 35 minutes. Participants responded to each of the seven

interview questions and any additional follow-up questions. The analysis of participants’

responses to each question follows.

Interview Question 1

Interview Question 1 was: What strategies do you use to comply with the FCPA?

The objective of this question was to determine participants’ familiarity with the overall

FCPA compliance process and what strategies the leadership uses to ensure employees,

customers, and representative comply with the FCPA. As shown in Table 2, all

participants (100%) were fully knowledgeable of the full range of FCPA compliance

strategy initiatives occurring in the organization.

Table 2

Strategies Used to Comply with FCPA

Code n %

Continuous FCPA training

Interactive management

Internet search for periodic updates to the FCPA

100

RM06 stated that continuous training on FCPA compliance process including

timely email notifications of any changes of the FCPA as they occur are an essential part

of the company strategy for FCPA compliance process. Participants’ responses to this

question indicate that the organization leaders are promoting sustainable FCPA

compliance training initiatives throughout the organization. The results in Table 2 show

that seven study participants (100%) were aware of the full range of sustainable FCPA

compliance training initiatives. The general business problem is that U.S. aerospace

companies must operate competitively in the global market and comply with the FCPA,

but enforcement of the FCPA by the U.S. Department of Justice does not occur in

international settings for non-U.S. companies. These results partially supported the

study’s general business problem.

Interview Question 2

Interview Question 2 was: What recent changes have you made in your company

policies to improve compliance with the FCPA? The objective of this question was to

determine participants’ familiarity with the company policy for FCPA compliance and

the process that corporate leadership uses to ensure employees, customers, and

representative are aware of policy changes. Participants’ responses to the interview

questions provided varying results, as shown in Table 3.

Table 3

Company Policy Changes: Aware or Unaware of Policy Changes

Code n %

Quarterly reviews and yearly FCPA re-certification

Use of CRM tools for FCPA updates

100

The results in Tables 3 show that seven participants (100%) indicated that they

were aware of the policy change that mandates a quarterly FCPA compliance review

including a yearly certification of compliance with the FCPA for all employees and

customers. LT08 stated that improving compliance with the FCPA throughout the

organization, and within the international customer’s organization quarterly was the goal

for making these changes. RM08 indicated that maintaining currency on the FCPA

changes requires timely updates to all employees and clients through a corporate

automatic alerts system, providing all stakeholders with the latest FCPA changes.

The results of Table 3 also show that two participants (29%) were not aware of the

recent changes made to the corporate policy that required using customer relationship

management (CRM) tools to provide timely information regarding the FCPA changes to

all stakeholders. EW08 and SM08, who were among the more senior organizational

leaders participating in the study, indicated that some of the changes to the FCPA

compliance policy were designed to meet the organization’s FCPA goals. LT08 and

RM08 added that senior leadership made these changes to ensure that all employees

pursuing international business and their customers are fully compliant with the latest

FCPA requirements.

Interview Question 3

Interview Question 3 was: What does leadership consider essential for FCPA

compliance? The objective of this question was to determine key strategic items

considered critical for a small aerospace company to comply with the FCPA.

Participants’ responses to Interview Question 3 varied significantly. This variation of the

responses prompted me to capture their responses in Table 4 and Table 5.

Table 4

Compliance with Cultural Norms and Corporate Policy

Code n %

Comply with cultural norms governed by the FCPA

Follow corporate FCPA compliance policies

100

Initial FCPA training and certification 6 86

Table 5

License Fees and Informing Customer of Conflict with the FCPA

Code n %

Explain to customers potential conflicts with the FCPA

Pay fees that are compliant with the FCPA

100

As the results in Table 4 show, six study participants (86%) indicated that

management considers initial training and certification essential for FCPA compliance.

RM12 noted that new employee’s initial training and certification are essential for

ensuring that employees are aware of the FCPA compliance requirements and that there

are severe penalties imposed by the government on employees and management for any

violations of the FCPA law. RM14 and EW12 indicated that they complied with cultural

norms as long as they were compliant with the FCPA and, in some cases, had to decline

gifts from customers to maintain compliance with the FCPA.

Table 5 shows the additional information study participants provided in response

to Interview Question 3. Seven study participants (100%) indicated that they explained to

the customers any potential conflicts with the FCPA during the initial business pursuit

process. SM18 explained that each culture has its own business rules and that

management complies with cultural rules as long as they do not violate the FCPA law.

KL26 and RM16 stated that some customers required a significant fee and even these

payments are compliant with the FCPA. Paying or not paying these charges becomes part

of a strategic business decision because these costs increase the overall value of the

contract.

Interview Question 4

Interview Question 4 was: What action plan considerations would ensure

continued success with FCPA compliance? The objective of this question was to

determine participants’ familiarity with the company action plan for FCPA compliance

and the effect of the cultural situation on being compliant with the FCPA. The results in

Table 6 show that seven interview participants (100%) were aware of the corporate action

plan that ensures continued success with the FCPA compliance.

Table 6

Compliance Action Plan with FCPA

Code n %

Aware of FCPA compliance action plan

Cultural effect on FCPA compliance action plan

100

KL30 and RM20 stated that FCPA compliance action plans include responding to

any updates to the FCPA. Both employees and customers have access to these plans

before any contract engagements. SM15 and LT22 indicated that FCPA compliance

action plans are customer specific and include regular certification, field visits, and

mutually agreed upon rules of business engagements.

Interview Question 5

Interview Question 5 was: What other pertinent information do you see that we

have not covered in this interview? The objective of this question was to determine

participants’ familiarity with FCPA compliance and the process that company leadership

uses to address encountered cultural conflicts with the FCPA. As Table 7 shows, four

study participants (57%) provided additional information regarding FCPA compliance.

Table 7

Recommendations for FCPA Currency and Addressing Noncompliances

Code n %

Noncompliance with the FCPA

Maintaining up-to-date FCPA compliance database

KL34’s remarks provided useful insight into the company’s commitment to

maintaining full compliance with the FCPA. These actions included maintaining the upto-

date database of FCPA requirements, regularly revising the corporate FCPA directive,

and using CRM tools to provide email notifications of FCPA to all employees. RM24

stated that company management must examine each opportunity for FCPA compliance

and try to avoid the engagements with business situations that may violate the FCPA at

any point during the execution of the project.

Triangulation of the interviews data, FCPA compliance corporate policy, and my

personal notes improved the validity of the collected data. I compared the interpretation

of the data gathered from the open-ended question during the semistructured interviews,

corporate policy for FCPA compliance, and my personal notes. I used NVivo as part of

the audit process: the triangulation results validated my interpretations of the collected

data.

Overarching Research Question

The overarching research question for the study was “What strategies do U.S.

aerospace small business leaders use to comply with the FCPA?” I answered this question

through posing five open-ended interview questions to participants (see Appendix E).

Multiple themes have emerged from the study: I used NVivo to tabulate and consolidated

the developed nodes into four main themes:

•Continuous FCPA compliance training,

•Interactive management,

•Compliance with cultural norms and corporate policy, and

•Qualifying for FCPA compliance.

Through this study, I identified insights on how to establish effective FCPA compliance

strategies that take into account the cultural norms and maintain compliance with local

laws. These findings are intended to positively influence social change by reducing the

costs of doing international business, which creates jobs, and improves the quality of life

for individuals and communities.

Findings in Relation to the Themes

The problem concentrated in this study was that small U.S. aerospace company

business leaders lack strategies to comply with the FCPA, which they need to do to

compete effectively in international markets. I specifically investigated these using

semistructured interviews with business leaders who had at least one year of experience

addressing FCPA compliance at a small U.S. aerospace company in California.

There are several different perspectives on the importance, application, and

implications of adopting a corporate FCPA compliance strategy due to the complexities

associated with the U.S. aerospace industry. I categorized, organized, coded, and

uploaded participant answers to NVivo for qualitative data analysis. The main themes

that emerged from this research as listed in Table 8 along with significant relevant

statements from interview participants.

Table 8

Themes Supported by Significant Statements From Interview Participants

Continuous FCPA compliance

training

RM04: We do online training to the greatest extent

possible. We look on the FCPA website for periodic

updates, and we join in industry associations who

sometimes alert us to what's going on internationally.

Therefore, we have a variety of sources of which we try

to keep as current as possible on the latest FCPA

requirements.

EW10: We all need ongoing training and timely

updated on any FCPA changes. If there are any

changes that I may have missed that the boss knows

about, he makes sure that I am aware of it. Then we

flow all these FCPA changes down to the

subcontractors.

Active management RM06: From an employee standpoint wherever they

are - we have people in multiple locations - and we try

to ensure on a regular basis - once a quarter - that they

are up to date on the FCPA requirements. We send out

website alerts; we send out email alerts, we connect

employees and customers up to the latest government

site.

LT22: Just keep all your employees up-to-date and

make sure that you always have a feedback loop so that

management in the U.S. are always aware of what is

going on in the field with your employees.

Compliance with cultural

norms and corporate policy

RM22: Sometimes you have to be very careful in

reminding our people that we are doing business with

Themes Participants’ Statements

international corporation that have to meet U.S.

government regulations. Some of the countries that we

do business with, sometimes they have no rules

whatsoever. We have to remind them that we are

representatives of the US government and must comply

with the U.S. laws. Therefore, we are diligent about

reminding our potential suppliers with the FCPA

compliance.

EW12: We follow the normal cultural practices. If it is

a European customer, they may have different rules

than we do. We try to follow the laws of the other

country without violating the FCPA.

Qualifying for FCPA KL02: About the FCPA, most of our customers we vet compliance

for compliance with the FCPA. We do not work for people who are noncompliant with

the FCPA. We do vet our customers in that we do not work for people that we would

mistrust, noncompliant with the FCPA or find as a demanding customer.

EW18: We try to understand the customers' cultural

issues, address these issues and considerations while

maintaining compliance with the FCPA and local laws

Findings Related to Body of Literature

Prior literature on FCPA compliance strategies has focused on identifying

corruption, courts’ role in controlling bribery, the dangerousness of business crimes, and

how much money companies need to spend to effectively comply with the FCPA

(Virginia & Maurer, 2013). Case studies regarding strategies for compliance with the

FCPA have linked reducing business transactional crimes to reducing business costs, and

creating jobs, creating positive social change (Lestrange & Tolstikov-Mast, 2013, and

Lord, 2013). Operational literature on this topic has documented the relationships

between culture, corporate policies, local laws, the wealth of the country, penalties for

corruption, and FCPA compliance strategies. Theoretical writings have examined

corruption from a cultural, ethical, moral, ambiguity of governmental laws or corporate

structures point of view (Lestrange & Tolstikov-Mast, 2013, and Lord, 2013). These

theoretical articles examined corruption from cultural, ethical, moral, ambiguity of

governmental laws, and corporate structures point of view (Kluvers, 2014; Rullock,

1996). Liu (2015) noted that current literature on FCPA compliance provides different

and contradictory views.

In this section, I relate the research findings to the existing body of literature on

FCPA compliance strategies. These study findings are based upon extensive knowledge

on the topics discussed in the literature review including new studies that were published

since I wrote the proposal for this study.

Theme 1: Continuous FCPA Compliance Training

The research findings showed a direct links to the larger body of literature related

to the FCPA compliance. Elements from the literature on FCPA compliance strategies

were used to code, organize, and categorize the information collected from each of the

interviews. Continuous FCPA compliance training emerged as a significant finding. Jorge

and Basch (2013) contributed significantly to the literature on continuing education as an

element of FCPA compliance strategies. Jorge and Basch considered continuous

corporate training as essential for achieving the ultimate goal of FCPA compliance

program where employees internalize the FCPA compliance code of conduct into their

daily routines. Cascini et al. (2012) recommended the inclusion of FCPA compliance in

the corporate code of ethics and implanting strong and transparent anticorruption

employee training programs.

The findings from this study supported Jorge and Basch’s (2013) assertion that

continuous FCPA compliance training is essential for employee’s internalization of

compliance with the FCPA in their daily business dealings. In particular, study

participants referenced using CRM tools to notify employees via email of any FCPA

updates by the DOE or the SEC. The timely notification process of the FCPA changes

ensures that employees have current knowledge of FCPA changes and protects

companies from potentially significant penalties due to violations of the FCPA.

Theme 2: Active Management

Active management was a significant study finding. As an element of strategic

compliance with anticorruption laws, management uses initial orientation, and a regular

training process that serves for screening employees that already have ethical values

concurrent with those of the corporation and involve employees in commitment to follow

moral norms (Braje & Galetic, 2014). Company leaders should also maintain procedures

in place to ensure corporate compliance with the FCPA (Fox, 2010). Executives of

multinational corporations need to assess countries’ corruption and establish strategies on

how to comply with the FCPA while conducting business in these countries (Cleveland et

al., 2010). Huang and Rice (2012) blamed corruption on the lack of corporate

management directives written for global business leaders to follow in bribery situations

and the lack of corporate strategies to comply with international antibribery laws,

including FCPA. Active corporate management must include having a clear FCPA

compliance directive, interactive monitoring of FCPA compliance, and monitoring of

travel expenses and gift giving to a foreign official to ensure compliance with the FCPA

safeguard corporations against major DOJ and SEC penalties (Jordan, 2016).

The findings from this study support Jordan’s (2016) assertion that active

management through monitoring of business entertainment of government official and

travel expenses helps in improving corporate compliance with the FCPA. For example,

R30’s reference to monitoring the entertainment and gift giving to government officials

to avoid the perception of corruption in the business dealings supported Jordan’s

assertion. Fox (2010) asserted that active management in maintaining corporate

anticorruption policy current ensures compliance with the FCPA, an assertion that was

supported by SM06’s reference to corporate policy updates to stay compliant with the

FCPA supported Fox’s assertion.

Theme 3: Compliance with Cultural Norms and Corporate Policy

The theme of compliance with cultural norms and corporate policy while

addressing the FCPA compliance was a significant finding from analyzing the research

data. FCPA compliance improved in companies that have a clear corporate policy that

addresses both FCPA compliance and how to navigate through cultural expectations.

National culture significantly influences countries’ level of corruption, especially in

countries with high masculinity and elevated levels of uncertainty avoidance, which tend

to be less compliant with anticorruption laws than in countries with low masculinity and

low levels of risk avoidance (Akbar & Vujic, 2014).

National cultures shape the cultures of corruption at different organizations and

ultimately affect the strategies for complying with anticorruption laws in organizations

(Zaloznaya, 2012). Executives of multinational corporations need to assess countries

corruption and establish strategies on how to comply with the FCPA and the cultural

norms while conducting business in such countries (Cleveland et al., 2010). This was

supported by RM22’s reference to complying with cultural expectation when they are

compliant with corporate FCPA compliance policy, and diplomatically rejecting any

actions to comply with cultural expectations that violate the FCPA.

Theme 4: Qualifying for FCPA Compliance

Another emergent theme was the importance of screening business opportunities,

customers, and employees for FCPA compliance. Jorge and Basch (2013) stated that

enterprise leaders need to establish an anticorruption policy and create an FCPA

compliance program that is easily audited and verified, so as to ensure employees,

intermediaries, consultants, distributors, and subcontractors are compliant with the

FCPA. This aligned with EW04’s recommendation of FCPA compliance programs with

online training and yearly certifications.

Cascini et al. (2012) analyzed the inclusion of FCPA compliance in the corporate

code of ethics and employee training and the ways compliance with the FCPA can lead to

an antibribery corporate culture. Tadajewski’s (2015) statement that international

managers must screen customers for honesty and trust during their business transactions

to comply with antibribery laws. Tadajewski’s statement was supported by KL02’s

reference to vetting customers for FCPA compliance and declining business from people

that are suspicious of potential corruption.

Findings Related to the Conceptual Framework

The conceptual framework for this study was based on Sutinen and Kuperan’s

(1999) regulatory compliance model and Becker and Stigler’s (1974) conceptual model

of corruption. These models described multifaceted processes that are continuously

evolving. Sutinen and Kuperan (1999) developed the model of regulatory compliance to

account for the costs and the revenues from illegal behavior popularized the regulatory

compliance theory. Becker and Stigler (1974) published the concept of the corruption

model, which popularized corruption theoretical model. I specifically employed these

models as a conceptual reference and lens to identify the FCPA adherence strategies

needed by U.S. aerospace small business leaders, following Méndez’s (2014) statement

that regulatory compliance is always less present in a corrupt environment.

Continuous FCPA Compliance Training

Training on the FCPA compliance is an essential part of the corporate strategy

that ensures compliance with the FCPA. Cascini et al. (2012) asserted that the inclusion

of FCPA compliance in the business code of ethics and employee training could lead to

an antibribery corporate culture. Similarly, AR11 described companies' concept of

continuous training to ensure compliance with the FCPA by both employees and

international customers, in alignment with Sutinen and Kuperan (1999).

Active Management

The importance of active management emerged was also a significant finding.

Jordan (2016) asserted that leaders of companies that have international operations need

to be actively managing FCPA compliance, create proper compliance policies, and

develop robust internal controls to combat corruption. RM12’s comments indicated that

management is active in the creation of the FCPA policy and the enforcement of this

policy, in alignment with Jordan (2016).

Compliance with Cultural Norms and Corporate Policy

Compliance with cultural norms and corporate policy addressing the FCPA

compliance emerged as a significant finding. Conceptually, designing corporate policies

that reduce corporate liability, compliant with cultural norms without improper benefits

being realized by foreign government officials, serves to achieve compliance with the

FCPA (Jorge & Basch, 2013). The study findings included a variation on this concept.

MR16’s comments indicate that the target company’s leadership focus on the creation of

a corporate policy that provides instructions to employees on how to address cultural

norms deviates from Jarge and Basch’s (2013) conceptual framework that provides for a

more holistic approach to the compliance with cultural norms, policy, and the FCPA.

Qualifying for FCPA Compliance

Qualifying for FCPA compliance emerged as a significant finding. Jordan (2016)

posited that integrity, honesty, good record keeping and full disclosure of business

transaction financials are emerging as integral elements of a business successful strategy

for compliance with the FCPA. KL02 commented that integrity is essential in all business

dealings and company management qualifies clients for integrity through their

compliance with the FCPA. The study findings concurred with Jordan’s

conceptualization that honesty and compliance with the FCPA are elements of long-term

business success.

Tie Findings or Disputes Findings to Existing Literature on Effective Business

Practice

In the 21st century, lack of compliance with the FCPA is still present, and

employees of U.S. aerospace companies allegedly bribe international government

officials to gain contracts (Darrough, 2010). The FCPA, which is one of the significant

business corruption deterrents, applies to U.S. companies, U.S. company personnel, and

foreign firms trading on the U.S. Stock Exchange in U.S. territories (Feld, 2013). The

implementation of adequate controls to increase compliance with the FCPA in the 21st

century is helping to curb corruption (Sanyal & Samanta, 2011). In this section, I

addressed the research findings as they relate to strategies for compliance with the FCPA.

In addition, I identified the successful business plan for compliance with the FCPA that

improves corporate competitiveness, reduces costs for doing business, and leads to

economic profits.

Continuous FCPA Compliance Training

Continuous employee training on the FCPA compliance methods can lead to an

antibribery corporate culture (Cascini et al., 2012). Given the continued risks of

noncompliance with FCPA, companies must have adequate compliance policies, internal

controls, and plans to detect and prevent bribery including an ongoing training program

for corporate employees engaged in international business pursuits (Jordan, 2016).

Ethical training does not necessarily provide a stronger ethical culture. However, data

suggest that an ethical training program in an organization can prevent and deter criminal

conduct (Stucke, 2014).

Development and training of multinational companies’ management on corporate

FCPA compliance guidelines and how to management addresses noncompliance

situations, identify and avoid international business corruption is important (Weeman,

2013). The findings from the research confirmed Weeman's observation that effective

training on corporate FCPA directives assists in identifying and preventing fraud. In

addition, LT10’s comments regarding yearly training and timely updates to corporate

employees of FCPA amendments as they occur concurred with the assertions of Jordan

(2016).

Active Management

High-power-distance cultures where managers adapt paternalistic relationships

toward subordinates harbor corruption more than low-power-distance cultures where

subordinates question management decisions and offer personal opinions (Yeganeh,

2014). Current trends in FCPA enforcement are ineffective, and the integration of the

FCPA into corporate culture through value-based management strategies could improve

FCPA compliance at both small and large companies (Lestrange & Tolstikov-Mast,

2013). Leaders of organizations play a significant role in eliminating corruption in

international business by actively participating in the compliance process with FCPA

(Adeyeye, 2014; Bierstaker, 2009).

Stucke (2014) noted that to reduce the potential of corruption in international

business, management must actively promote ethical behaviors at all levels of the

organization and monitor compliance with FCPA. The findings from the research

confirmed Stucke observation that active management reduces corruption within the

organization. RM06 commented that web-based notifications sent to all employees

notifying them of any FCPA changes to keep employees informed of the FCPA

requirements concurred with Stucke with Stucke (2014). In addition, AR24’s comment

regarding periodic reviews of the FCPA requirements implementation and actively

reaching to employees and customers with updates as they occur concurred with Adeyeye

(2014) and Bierstaker (2009).

Compliance with Cultural Norms and Corporate Policy

Small and medium enterprise leaders need to establish an anticorruption policy

and create an FCPA compliance program to ensure international business leaders avoid

bribery situations (Jorge & Basch, 2013). A close inspection of the relationship between a

culture of noncompliance with anticorruption laws and developing culture is necessary

(Akbar & Vujic, 2014; Pena López & Sánchez Santos, 2014). Vietnamese and Burmese

cultures, where using an intermediary to facilitate corporate transactions through bribes

between government officials and the corporation is the norm (Feldman, 2014).

In the literature, Choudhary (2013) and Klinkhammer (2013) provided that

national culture influences corporate culture regarding how corporate leaders view

bribery and the potential of employees to engage in corruption when conducting business

overseas. The finding from the study provided a variation on the existing literature

presented by Choudhary and Klinkhammer. In addition, MR02’s comment relating to

providing employees with the latest changes in FCPA through clear corporate directives

concurred with Jorge and Basch (2013).

Qualifying for FCPA Compliance

Corrupt organization leaders create organizational cultures and establish work

structures where employees facilitate corruption on a daily basis without being aware that

something illegal is occurring (Campbell & Goritz, 2014). In the literature, Sanyal and

Samanta (2011) noted that companies implementation of adequate controls to increase

compliance with the FCPA in the 21st century is helping to curb corruption. Executives

of multinational corporations need to assist countries with corruption and establish

strategies on how to comply with the FCPA while conducting business in such countries

(Cleveland et al., 2010).

Cascini et al. (2012) asserted that the inclusion of FCPA compliance in the

corporate code of ethics and employee training and the ways compliance with the FCPA

could lead to an antibribery corporate culture. RM12 concurred with Cascini et al.’s

assertion. Furthermore, LT06’s comment relating to verifying customers compliance

standards with the FCPA concurred with Sanyal and Samanta (2011).

Applications to Professional Practice

This research applies to the professional practice of pursuing international

business. The purpose of the study was to explore the strategies used by U.S. aerospace

small business leaders to comply with the FCPA. I expect this research to benefit

primarily U.S. small aerospace and defense businesses in complying with the FCPA

while pursuing international trade. Second, I expect this research to help those designing

corporate compliance strategy and developing FCPA corporate compliance directives.

Continuous FCPA Compliance Training

This research may benefit U.S. small aerospace business executives who are

seeking international trade. The findings covered within this theme may help U.S. small

aerospace business executives in designing and maintaining FCPA compliance training

programs that may save money by avoiding potential FCPA violation penalties and

improve profits. Cascini et al. (2012) showed that employees training on the FCPA

compliance process leads to an antibribery corporate culture. Huang and Rice (2012)

indicated the need for developing clear corporate guidelines for a manager on how to deal

with noncompliance with the FCPA.

The findings of this theme may help U.S. small aerospace business executives to

establish a robust FCPA compliance program that reduces international trade risks. The

analysis of the participants’ responses revealed U.S. small aerospace companies should

develop an FCPA program that has

•Initial FCPA compliance certification,

•Continuous training,

•Timely online notification of changes, and

•Periodic auditing.

These findings are relevant to U.S. small aerospace business that are not only trying to

comply with the FCPA but also are focusing on the creation of an ethical corporate

culture.

Active Management

The findings in this study may help management to be proactive in the creation of

FCPA compliance policies and monitor compliance with these policies. These results

apply to a U.S. small aerospace business that is seeking international trade. Throughout

this case study, I showed the importance of active management in the compliance with

FCPA. With these findings, I indicate that U.S. small aerospace business executives

should be involved and take ownership of the FCPA compliance program to protect the

corporation, employees, and management from potential FCPA violations.

Compliance with Cultural Norms and Corporate Policy

The study findings are intended to help U.S. small business executives develop

FCPA compliance policies that address cultural norms and remain compliant with FCPA.

Baughn et al. (2010) asserted that countries’ culture has a significant effect on the

compliance with anticorruption laws and countries’ cultural environment need

consideration during the development of corporate strategies for compliance with FCPA.

Baughn et al. (2010) concluded that understanding cultural differences helps predict the

severity of domestic corruption and noncompliance with FCPA. Mensah (2014) asserted

that cultural and religious environments influence business behavior toward corruption.

The finding encompassed within this theme concurred with Mensah’s assertion and may

help the U.S. small aerospace business manager in the establishment of corporate

strategies that address cultural norms while complying with the FCPA. In addition, the

findings revealed that company executives must ensure that all international contracts

have an FCPA clause that requires the participant to comply fully with the FCPA.

Qualifying for FCPA Compliance

This research may benefit U.S. small aerospace businesses with limited resources

that are expanding in the international markets with qualifying opportunities. The analysis

of the participants’ responses revealed U.S. small aerospace company executives should

vet international opportunities for (a) integrity of the customers, and (b) customers

compliance with the FCPA. Findings also revealed that management, in some cases,

declines to participate in international opportunities that appear noncompliant with the

FCPA.

Implications for Social Change

The results presented in this study may have positive implications for social

change. The results from this study are expected to improvements in corporate ethical

standards in international trade practices by reducing contract corruption and increasing

compliance with the FCPA. Decreasing contract corruption may result in reduced

corporate operational costs. Reduced operational costs are expected to lead to additional

jobs in the industry, which improve the local economy leading to a positive social change.

Lestrange and Tolstikov-Mast (2013) and Lord (2013) asserted that reducing

transactional business crime through FCPA compliance creates a safe environment for

conducting business, reduces costs, and creates jobs, which results in a positive social

change. Global business bribery negatively affects corporations’ economic and corruption

leads to an anticompetitive environment (Smith, Gruben, Johnson, & Smith, 2013). The

findings in this study may have positive implications in increasing the competitive

markets where products and services evaluation usually based on their value and merit

resulting in economic efficiency within the country, which is a positive social change.

Recommendations for Action

By examining participant responses, company policy, my personal journal,

collected data triangulation, and material on FCPA compliance strategies, I identified

multiple themes that address how U.S. small aerospace business might use FCPA

compliance to improve their international business. These themes included that the design

and implementation of FCPA compliance strategy requires cultural knowledge, economic

knowledge, global markets knowledge, understanding of local laws, and FCPA

requirements knowledge. Based on the study findings, a successful FCPA compliance

policy should include full compliance with the FCPA and comprehensive compliance

monitoring program.

The first recommendation is that U.S. aerospace business leaders should establish

a comprehensive FCPA compliance program that includes

•Ongoing training,

•Active management,

•Cultural norms compliance guidelines, and

•Qualifying business opportunities for compliance with the FCPA. The

established FCPA compliance program must provide employees with clear instructions

on how to comply with the FCPA. In addition, FCPA ongoing training should include an

electronic notification of any updates and amendments to the FCPA to the employees and

customers.

The second recommendation in those U.S. small aerospace business leaders

should actively participate in the FCPA compliance process. Leaders’ participation can

come in a form of regular audits, periodic interactive seminars, or periodic requests of

FCPA compliance feedback from their managers involved in international business

pursuits. In addition, leaders should set an example for all employees, be transparent, and

not tolerate any violations of the FCPA by any member of the corporation. Leaders also

should not penalize employees for rejecting business opportunities that prove

noncompliant with the FCPA.

I plan to disseminate the study findings through a variety of channels. This topic is

relevant to current international business transactions issues. These include the significant

penalties levied on corporation due to violations of the FCPA, the sheer volume of world

transactions conducted on a daily basis, and the need to protect corporate, management,

and employees for personal liability due to violations of the FCPA. Initially, I expect to

share these findings with the leaders of U.S. small aerospace companies that they are in

the process of expanding their business in the international markets. I hope that

organizations presently developing FCPA compliance strategies will find this information

helpful to create guidelines that they follow during their policy formulations stage.

Recommendations for Further Research

The observations and findings in this study show the need for additional research

in several different areas. In this study, I explored the strategies used by U.S. aerospace

small business leaders to comply with the FCPA. The participants in this study gave their

view on how their aerospace companies were successful in complying with the FCPA.

This study was limited geographically to California and addresses only small aerospace

businesses in that region. I recommend further research on the FCPA compliance

strategies used by all U.S. aerospace companies engaged in international trade pursuits.

Other recommended study can be a study focused on the transferability of the research

findings to other U.S. industries that are involved in international business. Another

recommended area for study is the close inspection of existing FCPA and amendments to

identify areas that may require a change to improve the competitive edge of U.S.

companies in the international arena.

Reflections

This study gave me a deeper understanding of the value of the case study in a

qualitative research and its contribution to the academic body of knowledge. Through this

process, I believe that I have transformed from being a practitioner to a

scholarpractitioner, capable of contributing to our understanding of global business

issues. When I began this journey, I naively thought that it would be solving all business

corruption problems and helping the U.S. industry gain international trade by evening the

competitive field. I have quickly realized that these efforts may need many studies and a

significant amount of time to perform these studies. Some of the faculty members helped

me narrow this study to exploring small aerospace companies’ strategies to comply with

the FCPA.

This research was enhanced by my prior knowledge and experience. My

experience in the aerospace and defense industry helped me in identifying the population

for this study and in conducting the interviews with the participants. Having experience

with international pursuits, international contracts, and international business

development for the aerospace and defense also gave me first-hand knowledge of the

compliance with the FCPA. I have tried to ensure that my personal biases did not

influence the study results; I believe that I was successful in achieving this goal.

I found the process of performing the literature search, conducting the interviews,

member checking, coding, and triangulation of data to be invigorating. Synthesizing the

themes to answer the research question helped me in formulating the questions for the

interviews and in the conduct of these meetings. This process has increased my

confidence as a researcher, and I am looking forward to completing more research in the

international business field.

Conclusion

Compliance with the FCPA is critical to the success of U.S. small aerospace

companies pursuing international business. I conducted this study to identify successful

strategies used by U.S. small aerospace companies to comply with the FCPA. Based on

the findings in this study, there are four themes that successful U.S. small aerospace

companies are engaged in that make these companies successful in the compliance with

the FCPA. Managers seeking international business need to consider these themes during

the formulation of a corporate strategy for FCPA compliance. The four themes that

emerged from this study were

•Continuous FCPA compliance training,

•Active management,

•Compliance with cultural norms and corporate policy, and

•Qualifying business opportunities for FCPA compliance.

These findings are intended to be used by small aerospace company leaders may use the

findings of this study to create successful corporate strategies for complying with the

FCPA while also pursuing international business opportunities, reducing the cost of

making the international trade, avoiding significant penalties, and establishing a good

corporate global image.

This research promotes positive social change by facilitating adherence to

strategic FCPA compliance policy developed by company leaders, including

improvements in corporate international trade practices by reducing corruption. Reducing

business crime reduces overall corporate operational costs, which expected to lead to

hiring more people. Hiring more people improves local economies leading to a positive

social change.

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