Chapter 10

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inherently wrong, illegal, compromise, corrupt governments, never stop, stand, receiving, dependence, deceive

Arguments against bribes: o ______________, cannot be accepted under any circumstances o ______________ in the US and most developed nations and therefore, unfair elsewhere o One should not ______________ her or his own beliefs o Managers should not deal with ______________ o Such demands, once started, ______________ o One should take a ______________ for honesty, morality, and ethics o Those ______________ bribes are the only ones who benefit o Bribes create ______________ on corrupt individuals and countries o Bribes ______________ stockholders and pass on costs to customers

FCPA 1977

Bribes became criminal offense

grease payment example

Given to minor officials (clerks, attendants, customs inspectors) for purpose of expediting. Helps get goods or services through red tape or administrative bureaucracies

bribes example

Money given, often to high-ranking officials. Purpose is often to get these people to purchase goods or services from the bribing firm. May also be used to avoid taxes, forestall unfavorable government intervention, secure favorable treatment, and so on.

bribes

Relatively large amounts of money given for the purpose of influencing officials to make decisions or take actions that they otherwise might not take; if officials considered merits of situation, might take some other action

profits, everybody does it, accepted practice, commissions, taxes, or compensation

arguments for bribery: o Necessary for ________ in order to do business o ____________ -- it will happen anyway o It is an ____________ in many countries--normal and expected o Bribes are forms of _______________ for conducting business between cultures

grease payments

minor, facilitating payments to officials for primary purpose of getting them to do whatever they are supposed to do anyway § Commonplace in many countries § Not prohibited § Relatively small sums of $ given for purpose of getting minor officials to: · Do what they're supposed to be doing · " faster or sooner · " better than they would otherwise do

bribe costs

o Seldom fully understood or described o World bank estimates >$1 trillion bribes each year o World Economic Forum: >5% of world domestic product o Retard economic growth, especially in emerging economies o Gov officials accepting "speed" money or "grease payments" to issue licenses --> economic cost 3-10% above licensing fee o Tax collectors permitting underreporting of income in exchange for bribe --> Income tax revenues may be reduced by up to 50% o Gov officials take kickbacks --> goods & services priced 20-100% higher o Many indirect costs · Demoralization & cynicism & moral revulsion against politicians & political system Politicians swept from office

bribery

primary form of corruption found in global business; the practice of offering something (usually money, also other monetary benefits) in order to gain an illicit advantage


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