Question

Concept Integration. You just received notice that a large shipment of manufacturing supplies that one of your factories in another country has been waiting for has been stuck in customs for two weeks. A local busi- ness associate in that country tells you that you are ex- pected to give customs agents some "incentive money" to see that everything clears easily. How will you handle this situation? Evaluate the ethical merits of your deci- sion by considering the approaches listed in Exhibit 4.3 on page 78.

Answer 1

This situation is a clear case of bribery. Bribe is given to someone who is at authority for the sole purpose of influencing the decision in your favour. It is illegal and hence unethical from the business point of view.

"Incentive money" to be given to customs agents is a type of bribery which is offered for the purpose of getting the work done who is obligated to do it. Here, offering incentive money to the customs agents is aimed at releasing the supplies from the customs department easily and in less amount of time. If I decide to go by the suggestion given by the local business associate, it will be treated as the unethical practice.

So, no such money should be offered. Although follow up with the customs department for the release of supplies can be done. For running the business ethically, one should have proper customs documents which can take sometime. May be some information is pending/missing. Also, any such incentive money can not be shown as legit expenses in the financial statements.