A Study on Management of Organizational Ethical Issues: Case Study

This case study examines the management of organizational ethical issues, specifically addressing bribery and related challenges. The study delves into the importance of ethical conduct within organizations, highlighting the need for adherence to ethical codes and the potential consequences of unet...Read More

A Study on Management of Organizational Ethical Issues
With Special Reference to a Case Study
Student Details
2/2/2020

Executive Summary
The organization is said to be the combination of multiple departments, which together conduct
various functions. Hence an organization is known as a system, which can be simple or complex
as well. It is important for any organization to be ethical while conducting its various operations.
The ethics are considered the moral backgrounds of any organization, which must be considered
while conducting operations, experiencing risks and connecting with the clients of the
organization. Hence in this study, the ethical measures that must be considered by an
organization are discussed with the help of parameters of the considered case study. The answer
to discussion questions of the case study effectively addresses the ethical parameters that must be
followed by every organization in their business life span. The answers were all about two acts
that are directing the behavior of employees of an organization. The acts are the United States
Foreign Corrupt Practices Act and United Kingdom Bribery Act. The elaborate comparison on
them has been done in this study in an effective and efficient manner. The study provided a
conclusion and recommendations on the basis of the identified answers to the discussion
questions of the case study.

Contents
Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................4
Answer 1..........................................................................................................................................4
Answer 2..........................................................................................................................................5
Answer 3..........................................................................................................................................6
Conclusion.......................................................................................................................................7
Recommendations............................................................................................................................8
Bibliography....................................................................................................................................9

Introduction
Ethical measures conducted by any organization in their day to business are considered one of
the necessities of the business world. It is expected from each employee or management of each
organization to conduct its functions, operations, etc within the established ethical code of the
corporation (Köbis et al., 2017). The organization is said to be the combination of multiple
departments, which together conduct various functions. Hence an organization is known as a
system, which can be simple or complex as well. Apart from that the objectives, policies,
products, and ideas of the company must follow the established morals or ethics of the
organization. In this study, a case study related to the increasing tradition of taking and giving
bribe all over the world is discussed. The concept of giving and taking bribe is becoming a global
corruption in the business world. In most countries, bribery is considered an illegal part of the
business either it is given or taken (Cameron, 2015).
Mainly in the UK and U.S., there are many acts that are established for restricting the acts of
bribery in their country. The acts such as the U.S. Foreign Corrupt Act and the United Kingdom
Bribery Act mainly prohibit various companies from indulging in bribery working in these two
regions or directly or indirectly related to these regions. It is important for any organization to be
ethical while conducting its various operations. The ethics are considered the moral backgrounds
of any organization, which must be considered while conducting operations, experiencing risks
and connecting with the clients of the organization.
Hence in this study, the ethical measures that must be considered by an organization are
discussed with the help of parameters of the considered case study. The aim of this study is to
understand the parameters of these two acts and recommend some strategies for organizations to
guide their behavior in case of the bribery phenomenon (Weismann & Buscaglia, 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.
Answer 1
The answer to the discussion question of the case study effectively addresses the ethical
parameters that must be followed by every organization in their business life span. The answer
was all about two acts that are directing the behavior of employees of an organization in the case
of bribery and ethical measures. The considered acts are implemented in the UK and US

accordingly, hence there very few similarities among them. However, there are some differences
among them which establish a different place for both of the bribery acts in the scenario.
Identification of Differences between the United States Foreign Corrupt Practices Act and United
Kingdom Bribery Act:
Sr.
No.
The United States Foreign Corrupt Practices Act United Kingdom Bribery Act
1. This law is framed and implemented by the US
federation.
This act is framed and
implemented by the UK
government (Richard, 2014).
2. It assesses the security and bribery activities of US
companies and individuals (Weismann & Buscaglia,
2014).
It directs the behavior of UK
companies regarding bribery
issues.
3. It is governed by two bodies that are Securities
Exchange Act 1934 and the Bribery law of the US.
It is governed by the parliament
of the UK, where the ultimate
decision is of Queen.
4. Penalties include a minimum of 5 years of
imprisonment and a fine up to & 250,000.
It includes penalties of 10 years
of imprisonment and an
unlimited fine (Ryder, 2015).
Answer 2
Description of situations where companies violated the United States Foreign Corrupt Practices
Act:
a) 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, the 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.

b) 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 corporation will also pay up to $800 million in a civil settlement with both the
federal government including states, plus forfeit $100 million in the bank, the Department
of Justice had said in a report, for a total of $1,415 billion in fines. 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.
c) Tyco International Ltd decided to reimburse $26.8 million to the 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. Apart from this a Tyco
subsidiary in the Middle East, Tyco Valves as well as Controls Middle East Inc, pleaded
responsible as it paid bribes to officials working in the state-operated oil as well as Gas
companies in Saudi Arabia in arrange to obtain a 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
In the business world differentiating between a gift and a bribe is complicated. In expectation of
return, a gift is something of value given; a bribe is the same thing given in the hope of gain or
profit. 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 (Cummings & Worley, 2014). It is important for any
organization to be ethical while conducting its various operations. The ethics are considered the
moral backgrounds of any organization, which must be considered while conducting operations,
experiencing risks and connecting with the clients of the organization. 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. Bribery is a felony and it is
possible to bring criminal charges against both the bid and the recipient (Dannemiller et al.,
2017).

There are some difficulties in determining a minor gift, entertainment or incentive constitutes
bribes, which are as follows:
a) Intention: The intention of the person who is giving a gift is considered the 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. It is so because the person giving the gift is
somehow expecting something in return for the person who is taking it. Hence in this
manner, the intention can differentiate between a minor gift and the bribe (Anwar et al.,
2014) (Koehler, 2014).
b) 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. Maybe in one
region the giving of even a minor gift is treated as a bribe; however, in another region, it
may be just a gift to the person. Hence in this manner, the difference between bribe and
gift can be established.
c) 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 gifts
might be expecting something from the other person or on the other hand might be
expecting a gift in return for the line task he/she will do for the respective person
(D.D.Warrick, 2017).
Conclusion
Bribery is considered one of the biggest problems in the ethical code of conduct of any
organization. It acts as 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 are
discussed with the help of a case. It can be concluded from the critical analysis of the case and
the answers to discussion questions that all around world bribery has become a big problem. It
becomes difficult to differentiate between gifts or bribe anymore. The elaborate comparison on
them has been done in this study in an effective and efficient manner.
The study provided a conclusion and recommendations on the basis of the identified answers to
the discussion questions of the case study. It is also concluded that considered acts are taking
care of bribery in countries effectively, which also has reduced the cases over time, 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 the upcoming
lines of this study.
Recommendations
Bribery is said to be the elements that can hamper the ethical measures of business in a diverse
manner. In this study, a case study related to the increasing tradition of taking and giving bribe
all over the world is discussed. The concept of giving and taking bribe is becoming a global
corruption in the business world. It is considered the responsibility of both that is employee and
organization to frame some ethical codes and duties which can direct the behavior of human
resources of the organization in an effective manner. In most countries, bribery is considered an
illegal part of the business either it is given or taken. 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 the following steps:
 Timely updates in anti-corruption and anti-bribery policies, rules and regulations of the
organization (McKinley, 2012).
 Make corrections and implementations of rectification of bribery from the topmost level
of the organization.
 Guide the behavior of employees and clients of the organization with the help of
established anti-bribery acts of that country (Parrott, 2014).
 Make sure the intention behind giving and taking gifts was not inspired by any
expectations from either side.

Bibliography
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