Corruption is one of the ethical dilemmas that are facing the global business. Corruption is manifested in many forms. Some of the common forms include involvement in bribery to win contracts and the individuals in public position amassing an enormous amount of wealth. Many countries have put in place strict measures to deal with corruption. The countries include China: The sentence attracts up to a death sentence once convicted. This paper discusses corruption and ethics in global business by presenting a summary of the article by Stevenson, 2018. It further explains the root-cause of the problem and provides ways in which managers and international firms can deal with the problem.
Stevenson, 2018 presents an article that highlights the plight of Lai Xiaomin. Mr. Lai is an example of a high profile Chinese citizen that has been caught by the increasingly strict policy on corruption. He is the former secretary of the communist party and chairman of the Huarong Asset management. Some of the corruption charges against him include misuse of power to acquire wealth, accepting bribes and suspicious dealing between his company and the HNA group and CEFC china energy. The CEFC is reportedly peddling bad debt and pursuing a $9 million acquisition in Russian. Furthermore, it is accused of oil concession bribery in one of the African countries. The anti-corruption watchdog has called out for him to return what he has illegally acquired. Some of the evidence that has been so far discussed includes a cash sum of $40 million in cash that was found in one of his properties. His business has been negatively affected by the case by losing a share value of 60% since the beginning of the year.
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As observed from the article summarized above, corruption is majorly caused by greed. Whenever a greedy individual gets a chance to exercise their power, they disregard all the set structure and accumulate wealth for themselves. Corruption is worsened when the greedy individual interacts with an institution with lenient anti-corruption measures. It can be observed from the article that whereas there are strict anti-corruption measures in China, companies are keen to deal corruptly with other companies outside China. The external dealing is preferred to minimize their potential of being caught.
The potential ways for managers to deal with corruption is adhering to the strict anti-graft rules. All illegally acquired wealth should be returned to the state whenever confiscated as set by the anti-graft watchdog in China. The harsh punishment should be coupled with the loss of the job, negative business performance, and conviction. Furthermore, the managers should introduce internal punishment for staff caught practicing the vice. The implementation of the strict anti-graft regulation and penalties goes a long way in discouraging the public from getting involved in corrupt dealings. Additionally, the adverse effect associated with corruption such as loss of business and companies shares losing value makes many companies reconsider their position whenever they are about to engage in corrupt deals.
As discussed above, it is clear that corruption is a major ethical problem in the international business. Some of the adverse effects include individuals accumulating enormous wealth at the expense of fellow citizens. This problem is majorly caused by greed and lenient legislation. As a result, formulation and implementation of strict anti-corruption laws are likely to reduce its practice. The legislation should not only be applied at government level but also at the business level.
References
Stevenson, A. (2018). Head of Powerful Chinese Lender Is Swept Up in Corruption Inquiry. The New York Times . Retrieved from https://www.nytimes.com/2018/10/15/business/Lai-Xiaomin-Huarong-corruption-china.html
