Corruption and Ethical Dimensions of Business - Paper Example

The main reason for corruption is due to poor governance in most developing countries. Governments are filled with corrupt officials, and people lack the assurance that their lives are safe such as insurances (Gray & Kaufmann, 1998). They end up practicing corruption. Likewise, there are many opportunities to practice corruption. Indonesia is one of the countries characterized by corruption (Jeffrey, Purnama, Spar & Tan, 2003). Most foreign businesses have fled this country due to the extent of corruption in its government. The main reason for cross-country differences in the prevalence of corruption is due to the different ways that governments treats different business owners such as the mining companies.

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Corruption affects the development of the private sector in such a way that foreign investors are chased away (Gray & Kaufmann, 1998). It also becomes difficult to develop in the private sector due to the high cost the government charges and the bribes that have to be made. Some investors in Indonesia have been forced to walk away due to the extent of corruption in this country.

For any foreign company to join the mining sector in Indonesia, it had to partner with at least one firm in the country. Strict regulations also had to be followed. Bre-X, led by Walsh failed to play by the rules.

David Walsh responded to the ministers announcement by advising Bre-X to sell part of its shares to one of the mining countries in Indonesia. This would relieve part of the pressure that the company was experiencing (Jeffrey, Purnama, Spar & Tan, 2003).

Bre-X- after the discovery of gold, this stakeholder was forced to let others into the business due to the increasing pressure. Their action was to do so without losing the major shares that they had into this business.

Barrick Gold and Peter Munk- these stakeholders did not like the offer that they were receiving from Bre-X and therefore decided to pull out of the deal (Jeffrey, Purnama, Spar & Tan, 2003).

Barricks International Advisory Board- though there was a chance to turn the focus on other investments in countries such as Chile and China, the opportunity to invest in Busang was too precious to ignore, and the board advised Barrick to make the investment.

Minister Sudjana- the minister, decided to revoke Bre-Xs CoW and deny them the rights own the mining company in Indonesia (Jeffrey, Purnama, Spar & Tan, 2003).

Ethical Dimensions of Business

Its prohibited to bribe any official from who belong to the foreign government so as to gain the rights of obtaining business. Payments made through different means such as mediators is termed illegal by FCPA (Foreign Corrupt Practices Act). Breaking these laws leads to fines by this organization. For example, business entities are charged up to $2,000,000 and around $100,000 for individuals who practice the vice (Paine, 1998).

Becton Dickinson should have a uniform global policy on different things such as gifts and other related matters to the extent that the company can control the interests of both the employees and consumers are met. This issue should be handled at the country level so as to improve the market for the company.

The global policy of BD should be to ensure that corruption activities are minimized as much as possible. This means that all of BD companies operate fairly where all the consumers and employees are treated equally (Paine, 1998). With such a global policy, its possible to draw the difference between legitimate marketing or lobbying activities and corruption due to the effects of the two activities.

Payments should be made by BD such that there should be no violation of any law which would result in penalties from the U.S. law. Rules have been introduced regarding making the process of dealing with parties such as distributors. BD should ensure that the process of dealing with these parties follows the U.S. laws, meaning that illegal payments that will eventually lead to breaking the law should be avoided.

Key managers at BD should be responsible for communicating, monitoring and enforcing the policy (Paine, 1998). Such managers understand the operation of such system and should, therefore, be consulted at all times.

References

Gray, C.W., & Kaufmann, D., (1998). Corruption and Development, 3/1/98, pp. 7-10

Spar, D. L., Purnama, P., Tan, C.D., & Jeffrey., B (2003). Busang (A): River of Gold. World Scientific Book Chapters. Harvard Business School.

Paine, Lynn S. "Becton Dickinson: Ethics and Business Practices (A)." Harvard Business School Case 399-055, September 1998. (Revised May 2004.)

Foreign Corrupt Practices Act Laypersons Guide. Department of Justice publication. Dept of Justice - Foreign Corrupt Practices Act.pdf