Business and Ethics in America

If you are from another country, where bribery and kickbacks are an accepted way of life, you may think that you must do it in the United States, too.  I know personally Indians whose relatives have taken briefcases filled with money to pay off Indian politicians in order to get lucrative contracts.   Ditto for Nigeria.  I heard an American say that in Egypt nothing gets done unless you pay inspectors, etc.

Is bribery necessary to do business in America?  I wish the answer that question was an unequivocal No, but it isn’t.  The best answer that can be given is that the United States, compared to other nations, is probably on-average more honest than most.  Bribery, pay-offs, and kickbacks are often expected in America and in some industries and in some locations, required.

The bribery can be subtle.  In Louisiana they have a word for it:  lagniappe, which means “a little bit added.”  There bribery is often tolerated, even admired, if it is done with grace and charm.

In many industries, you may be expected to give gifts to the individual or to family members or do business with the individual’s relatives or make donations to designated charities or political events, causes or campaigns.  You may get nothing outright, but if you give enough, you will get access to important decision makers.

Here’s an example.  A sales rep for a big company that manufactures drilling bits for the oil industry, who made regular calls to active drilling rigs, told me:  “When I come back next month, all of my boxes will still be stacked in front the foreman’s office door—unless I leave a him a present…say, a bottle of whiskey or hunting gear, or golf balls…something.”

In other businesses, you will be expected to provide theater tickets, Christmas gifts, bar mitzvah presents, tickets to the Super Bowl or the Final Four, golf tournaments, invitations to parties at luxury stadium boxes, trips on private jets to resorts…the list goes on and on.

But if you do decide to participate, you should be aware of the danger. From time to time, there is a big scandal in America.  The media swarms in, names are revealed, and occasionally people are sent off to prison.  The person that you bribe just may be part of a “sting” operation.  You may be bribing an under-cover law enforcement officer who’s getting evidence.

But there’s more.   A growing number of companies—Wal-Mart is one of them—prohibit any kind of unusually friendly interaction between buyers and vendors.  I know one Wal-Mart vendor who lost a long-term contract simply because he had had a long-time contract.   “I wasn’t especially friendly with the buyer,” he told me.  “Wal-Mart got nervous because I had been their vendor too long, and they were afraid the relationship might be getting too cozy.”

Why would Wal-Mart do this?  Because Wal-Mart understands that bribery and kickbacks add to the cost of doing business.  In order to compete in highly competitive markets, they cannot afford this cost.

And there’s even more.  Many American companies refuse bribes or kickbacks because of their values.  Some companies have a published code of ethics.  It’s not the right thing to do, and they don’t do it.

Some American companies have turned honesty into a business advantage.  Near the end of his astonishing retailing career, (Richard) Sears said: “Honesty is the best policy. I know, I’ve tried it both ways.”

More recently Warren Buffet stated:  “I cannot tell you that honesty is the best policy. I can’t tell you that if you behave with perfect honesty and integrity somebody somewhere won’t behave the other way and make more money. But honesty is a good policy. You’ll do fine, you’ll sleep well at night and you’ll feel good about the example you are setting for your coworkers and the other people who care about you.”

Additional articles on American society:  How to Do Business With Americans

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