• Understand what bribery is
• Understand what a kickback is
• Recognize what a conflict of interest is
• Understand what a whistleblower is

Bribery

In a perfect world, it’s always clear what’s right or wrong. In the real world, things are often not so clear. Many times, the “right” choice is subjective. In this section, you’ll learn some of the special terms for particular kinds of unethical behavior in business.

bribery

Bribery is the act of giving money, goods, or other forms of compensation in exchange for a benefit to the giver that the recipient would otherwise not choose to give. The key to identifying bribery is that it is intended to alter the recipient’s behavior.

A simple form of bribery that happens in everyday life: a parent who tells a child that if they behave while at the grocery store, they will get ice cream or some candy. This exchange is often referred to as a “quid pro quo,” which is Latin and translates to “something for something.”  This is a common and mostly harmless form of bribery, but does it set the tone for expecting a future favor in exchange for good behavior?

Many types of payments can constitute bribes: monetary tips, gifts, favors, discounts, waived fees, free foods, free advertising, free trips, free tickets, donations, campaign contributions, sponsorships, higher paying job, stock options, secret commission, or promotions. In business, bribery can be very subtle. Consider the following example.

Gifts from a Supplier

You are the purchasing manager for a manufacturing company. There are several suppliers from whom you can purchase component parts used in the production of your finished product. One of the supplier representatives comes by every Monday morning with biscuits for you and your staff. They call you on occasion and offers you tickets to sold-out sporting events and sends a lavish gift basket every Christmas.

Is this just good business on their part, building a personal relationship with you and your staff, or is there an expectation that, in exchange for their generosity, you will select their company’s product over the competition—even though it’s not the most cost-effective choice? Are you taking a bribe when you accept the football tickets?

These small tokens of appreciation can be construed as bribes, and as a result, many companies prohibit their employees from accepting gifts from suppliers and vendors.

Bribery and Global Business

One of the challenges in determining whether or not someone has taken a bribe or simply accepted a gift is that the social and cultural norms governing bribery and gift giving can differ from place to place. Certain monetary transactions are acceptable and appropriate in some cultures but not in others. For example, political campaign contributions in the form of cash are considered criminal acts of bribery in some countries, but in the United States, as long as they adhere to election law, they’re legal. In the U.S., bribery of public officials is not just unethical but illegal.

Different cultures use radically different systems to get things done. Some cultures are primarily rule based while many others in the world are relationship based. In the U.S., businesses generally operate within the bounds of the law. In other cultures, personal honor, family duty, friendship, or long-term mutual obligation are much more important to business. Sometimes loyalty in a business situation to those who are close to you is considered suspect behavior in the U.S. but represents high moral character in other cultures.