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Summary-Corporations Can Behave Ethically and Survive

In: Business and Management

Submitted By bergman
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Summary: Corporations Can Behave Ethically and Thrive

In the article, “Corporations Can Behave Ethically and Thrive”, important points are stated about the corruption and unethical behavior in corporations. It is said that the only way to succeed in business is engaging in unethical behavior, although numerous corporations such as IKEA, Reebok, and Google, have prospered without resorting to these practices. In combating these corrupt practices, America and Britain are leading worldwide efforts to give corporations the idea that they will be best served to forgo the short-term benefits of corruption and focus on building a morally righteous business to prosper in the long run. Although America’s Department of Justice, is investigating over 150 companies, there is little sign of this “corruption eruption” is dying down. Corporations started doing this because the chances of being caught were small, while the rewards for going against the grain were big and immediate. Bribery isn’t necessary nor is it effective in the long run. IKEA is one of the many corporations to not conduct unethical business practices and to go to great lengths to fight interval corruption and even fight in different countries. The “efficient grease” hypothesis, of bribery speeding up the snail pace of bureaucracy, is believed to dismiss entire countries as corrupt, when in fact these countries have laws against this concept and combat against it. This hypothesis has actually been found to slow down the negotiations with bureaucrats, giving these officials an incentive to haggle over regulations. Once giving into the temptation of corruption, it actually begets ever more corruption in that, bribe takers keep returning to the trough and bribe givers open themselves up to blackmail. Even the likelihood of being caught is incredibly higher than it was a few years ago because of the development of the internet and its inadvertent purpose of handing more power to NGO’s and other whistleblowers. Prosecution over this problem is also growing and countries are now banding together to fight corruption. The Obama Administration and The Department of Justice are pursuing over 150 cases today, as opposed to only 8 in 2001, and are working with other countries to making senior managers personally liable for corruption, spelling out huge fines and time in prison. The Organization for Economic Cooperation and Development, a 1997 anti-corruption convention pact, has now been signed by thirty-eight different countries, making America a lone ranger no more. This is now dramatically increasing the chances of being caught. On April 1st, 2010, Daimler-Chrysler, was fined $185 million as a result of a joint investigation by America and Germany. The phrase “doing well by doing good” may be irritating to the corporate culture, but now that the likelihood of being caught is increasing and the consequences of being caught are dramatically becoming worse, corporations may need to start taking this problem seriously. By clubbing together, campaigning for reform, developing explicit codes of conduct on corruption, and training staff to handle demands for pay-offs by backing them up when they refuse them, corporations can truly come out on top.

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