January 10th, 2018
Bribery for award of business in Africa – The Ethical Perspective
Corruption has been cited as an impediment to doing business effectively, hence it negatively affects a country’s economic growth. For instance, bribery is identified with increasing costs for business, encouraging illegal and unethical practices, impeding competition and directing resources to unplanned uses (Sanyal and Guvenli 287). According to Pacini, Swingen and Rogers (205), bribery is a type of fraud that involves a business transaction, which provides unfair advantage to the party paying the bribe, and subsequently results into corrupt economic and governance frameworks. Such a transaction could involve monetary gains, other financial gains or non-monetary advantages such as providing favorable publicity (Sanyal and Guvenli 288). Therefore, increasing cases of bribery in the course of global business transactions could have grave outcomes to various countries’ economies.
The increasing practice of bribery in global business is exemplified through various reports. A Wall Street Journal 2008 report for instance covered a story where Siemens was prosecuted and fined heavily for its bribery pursuits in Nigeria, Russia and Libya (qtd. in Sanyal and Guvenli 288). The World Bank estimates have also indicated as much as 5 percent of developing countries’ imports to involve corrupt deals (Moss qtd. in Sanyal and Guvenli 288). Such impacts of bribery on international business transactions has been credited with increasing the average contract price for international contracts by between 15 and 25 percentage points (Sanyal and Guvenli 288). For the countries where such practices are rampant, Hamra notes that amounts that are lost through bribery practices could easily have been the second largest source of financing for developing economies, the first being foreign direct investment (qtd. in Sanyal and Guvenli 288). In terms of economic costs, bribery thus affects not only the economies of home country but also host countries of organizations offering bribes.
Despite the costs that bribery leads to, most of the organizations engaged in the practice have tried to justify the practice on cultural aspects of the countries in which they conduct business. Different cultures have for instance been identified to perceive corrupting behavior in diverse ways where a behavior regarded as corrupt in one culture is not perceived as such in another culture (Hooker 251-267; Baughn et al. 16-17). Accordingly, the ethical nature of bribery has been clouded in countries where such practices are acceptable as part of doing business and a cultural characteristic of the residents in these countries. This paper thus aims to assess the ethical nature of bribery with respect to Africa. The paper will use a case study on a Ugandan tire dealer to reinforce various arguments it advances. Go to part 2 here.