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SECTION 6B – BRIBES, GREASE PAYMENTS, AND "WHEN IN
ROME . . ."
READING 6.10 – A PRIMER ON THE FCPA
Answers and Key Discussion Items
1. Use PowerPoint Slides 261 and 262. Companies pay bribes in other countries because they see it
as a expeditious way to accomplish their goals there and, in fact, may see it as the only way to
accomplish those goals. They see the time constraints of getting goods unloaded, product
manufactured or distribution chains established and seize whatever means exists for accomplishing
those tasks in the least amount of time. The short-term implications of bribes are that the company
gets its work accomplished. The tasks are done, business moves along and those who are taking the
bribes may benefit from having the extra income. In the short-term, those who point to bribes as a
good resolution do have a point. However, the long-term implications of bribes are the following:
a. Those in the country know that the company is willing to pay bribes. What may begin as a $100
b. Those in the country also suffer economically. Corruption benefits the few at the expense of
many and the atmosphere created by the payment of bribes may produce an economy in which
c. Anyone can bribe – it is not a competitive advantage. Upping the bribe is not a resolution.
All forms of economic systems, from capitalism to socialism, suffer from the introduction of corruption.
The system no longer functions according to its rules and a favored class develops so that the
2. The policy should include the following: a statement of compliance with the FCPA; creation of
infrastructure to monitor payments to agents and others in other countries; monitoring of competition
3. The issue of trust arises as the question is raised about whether the government officials are using
CASE 6.11 – SIEMENS AND BRIBERY, EVERYWHERE
Use PowerPoint Slides 263 - 266.
Answers and Key Discussion Items
1. The fines Siemens paid are far less than the company’s profits during the periods of the bribes.
Although we do not know whether the company lost money on these contracts as a result of the fines,
2. The risk is that employees come to rely on a facile business model, which, when taken away, leaves
3. He is an amoral technician who believes that he must succumb to industry/cultural practices and just
behave as everyone else does. His failure to analyze the implications for Siemens resulted in the
CASE 6.12 – WALMART IN MEXICO
Answers and Key Discussion Items
1. The jobs are a positive effect, but the end result is that the economy is not based on the most
efficient, lower prices, etc., but rather on what you can pay. In countries where there is corruption and
2. For some, this is a tough distinction to make – paying government officials for doing their job is
difficult. However, expedition fees that are available to all may be a way to get things done quickly.
3. Such a policy makes it clear for employees what they can and cannot do. The inclusion of facilitation
4. Again, the economic development is halted when there is corruption. It is a cost of doing business
CASE 6.13 – ITALY’S FREEWAY CORRUPTION
Answers and Key Discussion Items
1. The costs include an incomplete freeway, the additional taxes for financing, the dangers of the
2. Because workers are able to get paid with little work – it was like a bottomless pit that they could tap.
3. The businesses and citizens in the towns trying to get connected by the freeway. The businesses
