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I B LEC CH 4
Corruption notes from lecture
| Question | Answer |
|---|---|
| Corruption impact | discourages trade and FDI distorts system creates unpredictable markets increases cost of doing business undermines moral or rule of law distorts incentives to compete on quality and or price, distorts supply/demand and quality |
| Foreign corrupt practices act (FCPA 1977) | illegal to bribe foreign officials or political parties - directly or indirectly - no slush funds ** with the exception of facilitating payments |
| Direct bribe | with the actual person you are receiving an incentive from |
| indirect bribe | through a cousin or a brother etc, the person will never actually get the bribe |
| Slush funds | funds off the books to bribe people with, getting around regulations, |
| Facilitating payments | paying individuals to get into a meeting, the one exception to the FCPA 1977 because without it the US would not be able to compete with other countries |
| OECD | extension of the FCPA, combating bribery of foreign public officials in international business transactions |
| UN | extension of FCPA - convention against corruption |
| Other extensions of FCPA 1977 | IMF/World bank. Export-Import Bank/Overseas Private Investment Corp |
| FCPA can be negative because.. | vague wording exceptions money is lost by American companies because regulations are not always enforced Limited enforcement arrogant |
| Who operates under the FCPA | US or international business that have US assets |
| FCPA current impact | - OECD implementation - Expanding impact (managers liable with sentances such as prison versus just fines) - Increased scrutiny and prosecution - Media shame - accountability and transparency in gov. - incentives or penalties - integrity acts |
| Business Ethics (book) | the concept that business should consider the consequences of their actions when making business decisions |
| Ethics involve... | company health social health individual health |
| Ethical decision making is....not | a realistic goal due to no universal values, subjective |
| Stakeholders | individuals who have an interest, stake, or claim in the actions and overall performance of a company |
| Internal stakeholders | people who work for the business |
| external stakeholders | people who have some claim on the firm such as customers, suppliers, unions |
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AMiC4353
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