Case Study: Analysis of Ethical Issues in Organizational Management

This report delves into ethical issues within organizational management, emphasizing the critical problem of bribery through a detailed case study. It examines the U.S. Foreign Corrupt Practices Act and the UK Bribery Act, comparing their provisions and exploring situations where companies have violated these laws. The report differentiates between gifts and bribes, highlighting the complexities in determining intent, regional variations, and expectations of involved parties. Furthermore, it underscores the significance of organizational policies and employee conduct in mitigating bribery risks, recommending timely updates to anti-corruption policies, and fostering ethical behavior at all levels. The conclusion emphasizes the need for stakeholders to reject bribes and maintain ethical standards to ensure organizational integrity.

W I T H S P E C I A L R E F E R E N C E T O A C A S E
S T U D Y
S T U D E N T D E T A I L S
A Study On Organizational
Management Ethical Issues

Introduction
 Ethical actions undertaken by various
organization in their day to business are
considered one of the requirements of the
business world (Anwar, Nisar, Khan & Sana,
2014).
 Apart from that the objectives, policies, products
and ideas of the company must follow the
established moral or ethics of the organization.
 In this study a case study related to increasing
tradition of taking and giving bribe all over the
world is discussed.

Aim and Scope
 Largely in UK and U.S. there are many acts which are established
for restricting the acts of bribery in their country. The acts such as
U.S. Foreign Corrupt Act and the United Kingdom Bribery Act
mainly prohibits various companies for indulging in bribery working
in these two regions or directly or indirectly related to these
regions.
 The aim of this study is to understand the parameters of these two
acts and recommend some strategies for organizations to guide their
behaviour in case of the bribery phenomenon (Parrott, 2014).
 The scope just not restricts to two regions that are UK and US,
however suggestions are listed in this study to be followed by any
business working in any part of the world.

Bribery is Illegal

Answer 1
Identification of Differences between United States Foreign Corrupt
Practices Act and United Kingdom Bribery Act:
Sr. No. United States Foreign Corrupt Practices Act United Kingdom Bribery Act
1. This law is framed and implemented by US
federation.
This act is framed and implemented by UK
government.
2. It assesses the security and bribery activities of
US companies and individuals.
It directs the behaviour of UK companies
regarding bribery issues.
3. It is governed by two bodies that are Securities
Exchange Act 1934 and Bribery law of US.
It is governed by parliament of UK, where ultimate
decision is of Queen.
4. Penalties include minimum 5 years of
imprisonment and fine up to & 250,000.
It includes penalties of 10 years of imprisonment
and unlimited fine.

Answer 2
Description of situations where companies violated United States Foreign Corrupt Practices Act:
1. US computing giant Hewlett-Packard offered to pay $108 million to settle allegations it
offered bribes in Russia, Poland including Mexico to secure state contracts.
As per a report from the United States Securities & Exchange Commission, deal includes
criminal as well as civil investigations underneath the Foreign Corrupt Practices Law
(PHYS.ORG, 2014).
Reason: It is provided for the purpose of addressing bribery inquiries in three nations, in a
scandal involving cash boxes, jewelry including Grand Canyon trips.

Continued
2. The giant American drug company, Eli Lilly
and Corporation, agreed to pay almost $1.5
billion in fines for selling one of its non-Food
and Drug Administration-approved uses
drugs.
The business was fined and found under the
U.S. Foreign Corrupt Practices Law (CNN
Money, 2009).
Reason: The reprimand stems starting from
what the Justice subdivision calls off-label
endorsement of the medicine Zyprexa as
well as related to advertising the medicine.

Continued
3. Tyco International Ltd decided to reimburse $26.8 million to resolution of
U.S. charges so as it paid bribes to people of foreign authority and
misreported such expenditure, in infringement of the Foreign Corrupt
Practices Act. It is pleaded responsible as it paid bribes to officials working
in the state-operated oil as well as Gas Company in Saudi Arabia in arrange
to obtain contract with them (Viswanatha, 2012).
Reason: The bribe was paid in order to obtain official international contracts
and provide small gifts to those officials so that the contracts can be achieved
by the company.

Answer 3
 Gifts and bribes can be cash, actual items or tickets to a sporting
event, entertainment, travel, golf rounds or restaurant meals.
As per the case a gift has become a bribe as its primary objective is
to behave immorally from a figure of authority, particularly if
there's no other probable reason for the donation (McKinley, 2012).
Bribery, and on the other hand, refers to selling, awarding,
soliciting or obtaining some object of value as a means of
controlling the acts of a person holding a public or legal obligation.
It is a felony and it is possible to bring criminal charges against
both the bid and the recipient.

Continued
There are some difficulties in determining a minor gift, entertainment or incentive
constitutes bribes, which are as follows:
 Intention: The intention of the person who is giving gift is considered main element
in deciding whether the thing is a gift or it is the bribe. It cannot be determined
easily and the minor gift can also be a bribe (Weismann & Buscaglia, 2014).
It is so because the person giving the gift is somehow expecting something in return
of the person who is taking it. Hence in this manner the intention can differentiate
between a minor gift and the bribe.

Continued
 Based on the Region: The region can also be treated as the main element in
converting bribe as a gift. In different regions the concept of bribe differs
accordingly (Köbis, Prooijen, Righetti & Van Lange, 2017).
May be in one region the giving of even a minor gift is treated as bribe;
however in other region it may be just a gift to the person.
Hence in this manner the difference between bribe and gift can be established.
 Expectation: In order to differentiate between a gift and a bribe the
expectations of both the involved parties are also important.
It is so because the person who is giving gift might be expecting something
form the other person or on the other hand might be expecting a gift in return
of the line task he/she will do for the respective person.

Conclusion
 Bribery is considered as the act, which is the part of the corruption, which
must not be done by any involved party of the organization or its client.
 In this study the ethical measures and issues related to bribery is discussed
with the help of a case. It can be concluded from the critical analysis of the
case and the answers to discussion question that in all around world bribery
has become a big problem.
 It becomes difficult to differentiate between gifts or bribe anymore. It is also
concluded that considered acts are taking care of bribery in countries
effectively, which also has reduced the cases overtime, however it is also
considered the responsibility of stakeholders of an organization to ignore
bribes from all sides at any coast.
 For this purpose some recommendations are also mentioned in upcoming
lines of this study.

Recommendations
In order to manage the cases of bribes within and outside an organization, it
is the responsibility of the management of the organization to take following
steps:
 Timely updates in anti-corruption and anti-bribery policies, rules and
regulations of the organization.
 Make corrections and implementations of rectification of bribery from the
topmost level of the organization (Cummings & Worley, 2014).
 Guide the behaviour of employees and clients of the organization with the
help of established anti-bribery acts of that country.
 Make sure the intention behind giving and taking gifts were not inspired
from any expectations from either side (Ryder, 2015).

Bibliography
 Anwar, A., Nisar, Q.A., Khan, N.Z.A. & Sana, A., 2014. Talent Management: Strategic
Priority of Organizations. International Journal of Innovation and Applied Studies, 9(3),
pp.1148-54.
 Cummings, T.G. & Worley, C.G., 2014. Organization Development and Change. 10th ed.
Cengage Learning.
 Köbis, N.C., Prooijen, J.-W.V., Righetti, F. & Van Lange, P.A.M., 2017. The Road to Bribery
and Corruption:Slippery Slope or Steep Cliff? Psychological Science, 28((3)), pp.297-306.
 McKinley, M., 2012. Ethical dilemmas in customer relationship management. In Ethics in
Marketing and Communications. London: Palgrave Macmillan. pp.51-67.
 Parrott, L., 2014. Values and Ethics in Social Work Practice. 3rd ed. Learning Matters.
 Ryder, N., 2015. The legal mechanisms to control bribery and corruption. In Research
Handbook on International Financial Crime. Edward Elgar Publishing.
 Weismann, M.F. & Buscaglia, C.A., 2014. The Foreign Corrupt Practices Act: Why it fails
to deter bribery as a global market entry strategy. Journal of Business Ethics, 123(4),
pp.591-619.