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BUSI 690
Sept 2015
Liberty University
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Corruption is a business concern that affects a company’s ability to compete in the
marketplace. Corruption cheats small disadvantaged businesses owned by Veterans or woman.
Corruption diverts resources for construction projects and services within communities such as
education and health care to lobbyists and government official’s pockets. Through business
ethics and compliance programs companies are creating environments that support a person
make the right decision. Collectively taking the right action will reduce unethical behavior in the
workplace.
The definition of a “U.S. Firm” is challenging to outline. Emerging markets process a
challenge as many companies outsource their products and material to other countries. It is best
to look at the Morgan Stanley Capital International (MSCI), Inc. and the Standard and Poor
(S&P) major index to provide information regarding proprietary stock market analysis. The
analysis along with the company’s ability to meet required U.S. business criteria will define a
country classification. Maintaining a business strategy and industry standards in the United
States allows for diversification. Therefore, looking at a company’s 10k report will show where
a firms fixed assets are being held and how much revenue they make in each country.
Although many countries including the U.S. have a standard code of ethics many
countries are still lacking in policies and corruption regulations. Disclosures such as a 10k report
are a good beginning but a follow up with audits and policy regulations establish a useful
framework. Corruption and unethical behavior in emerging markets directly impacts the global
economy on all levels. Bribery and politics negatively affect the Gross Domestic Product (GDP).
Ethics and morals can ease corruption in the global market. As a U.S. company or
individual one is expected to follow standards and regulations no matter what country they may
be in doing business. Taking bribes in the U.S. is illegal therefore accepting a bribe in a foreign
country where it is considered best practice is illegal. Weak legal systems and inadequate law
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enforcement encourages unethical behavior. It is up to the firm or organization to set their own
standards of behavior and instill it into their employees and organizational practices.
Highest corruption can be found in Nigeria, Angola and Bangladesh. The countries with
the lowest corruption are Finland, Denmark, New Zealand and Singapore. Sadly the United
States is outside the top ten, rated as sixteenth (Anti-Corruption Watchdog, 2015). The Foreign
Corrupt Practice Act (FCPA) of 1977 was an effort to ensure an accountability of commercial
businesses and government integrity. Accounting practices were changed to ensure companies
complied with the U.S. Securities and Exchange Commission (SEC).
A corporate leadership strategy across the world needs to take place to end global
corruption. Corporations need to invest into ethics and compliance programs to maintain a level
of integrity throughout the globe. Collective action efforts from all countries need to take place
while focusing on corporate anti-corruption laws. Demand retribution from all engaged in
bribery and kickbacks.
Special considerations to choose a country where one would set up a business would be
competition, tax breaks, regulatory flexibility, transportation abilities and quality of the labor
market, cost differentials between one country compared to another and proximity of raw
material suppliers as well as safety.
One firm that sponsors innovation in Anti-corruption is the Merck Company. The Merck
foundation has inspired and dedicated itself to corruption reform all over the world creating
independent ethics centers which increase transparency in corporations, (Hills, 2009). Recently
only four of forty-one countries signed and agreed to fight bribery and anti-corruption in the
world. Germany, Switzerland, United Kingdom and the United States are the only countries
actively engaged in stopping corruption (Anti-corruption Watchdog, 2015). Corruption creates
poverty and income inequality and discourages foreign investment in lower income countries
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(Anti-corruption Watchdog, 2015.
The Bible tells us in many verses that corruption is unethical and immoral. Proverbs
20:17 is simple and leaves no misunderstanding of how God feels about unethical behavior.
“Bread gained by deceit is sweet to a man, but afterward his mouth will be full of gravel.” A
corrupt leader will fail his people causing poverty, war and distrust among society.
Many U.S. Companies send money overseas to avoid paying taxes. The Bloomberg
Business report states, $2.1 Trillion dollars is stashed overseas each year, (Rubin, 2015). The
dollars increase each year due to the low tax countries outside the United States. Apple and
Google increased their foreign investments by over 20% from last year along with Qualcomm,
Inc., Cisco Systems Inc. and Hewlett-Packard Co. Many questions are raised by this action such
as; Is this ethical and who is responsible for keeping the “should be” tax dollars in the United
States? According to The Ethisphere Institute 2014 claim, some of the “World’s Most Ethical
Companies” to work for are 3M Company, AECOM, Applied Materials, Inc. and Cummins, Inc
along with EBay, Inc. Many companies who engage in social missions and the environmental
may not be the richest and more known company in the United States but they are valuable in
their own right.
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References
Adams, S. (2014, March 20). Forbes Welcome. Retrieved from
http://www.forbes.com/sites/susanadams/2014/03/20/the-worlds-most-ethical-
companies/
Anti-corruption watchdog: Only 4 of 41 countries actively fighting bribery by companies | Fox
News. (2015). Retrieved from http://www.foxnews.com/world/2015/08/20/anti-
corruption-watchdog-only-4-41-countries-actively-fighting-bribery-by
Transparency International - Country Profiles. (2015). Retrieved from
https://www.transparency.org/country/
Hills, G. (2009, May 1). Retrieved from http://www.google.com/url?
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Rothaemel, F. (2013). Strategic management: Concepts & cases. New York: McGraw-Hill
Irwin.
Rose-Ackerman, S., & Hunt, S. (2015). International Anti-Corruption Policies and the United
States National Interest. Debates of Corruption and Integrity: Perspectives from Europe
and the US, 38.
Rubin, R. (2015, March 4). U.S. Companies Are Stashing $2.1 Trillion Overseas to Avoid Taxes
- Bloomberg Business. Retrieved from http://www.bloomberg.com/news/articles/2015-
03-04/u-s-companies-are-stashing-2-1-trillion-overseas-to-avoid-taxes
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SEC.gov | Microcap Stock: A Guide for Investors. (2014). Retrieved from
http://www.sec.gov/investor/pubs/microcapstock.htm
The Holy Bible: New international version, containing the Old Testament and the
NewTestament. (1978). Grand Rapids: Zondervan Bible Publishers.
