Bribery is a crime which consists in payments provided by some people (officials, ordinary people, or business owners) to others that make decisions concerning some important and, usually profitable projects in order to get more profit, get a more profitable project, win the bidding for a certain project under consideration. In other words, everything concerns money and profitability.
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As a rule, major bribes include payments that are higher than a certain limit which can be considered as an ordinary present. In this respect, it is necessary to differentiate a present (which is a simple gift and a person is not supposed to give or do something in exchange) from a bribe (which presupposes a payment which is fulfilled in order to get something in exchange). Thus, the major challenge consists in proving that the payment was fulfilled in exchange for a certain favour, a payment for services. When a person pays in the market and gets some products in exchange, can it be referred to as an act of bribing? What act should be considered as an illegal one? Moreover, the answers are simple and one can consider them to be too simple to be the right ones.
Case Analysis Using the Eight-Step Model
A Brief Summary of the Case
The study case suggests a discussion of the events that were related to the act of bribing, as claimed by some officials, though the act itself should be thoroughly proved in order not to cast a shadow over the officials that are said to have been involved into the events related to the act of bribing. The most challenging part of the case consists in the unprejudiced and objective analysis of the case itself and deciding whether the main character of the story, “a mysterious British lawyer called Jeffrey Tesler” (Hill, 2008, p. 151), can be called a bribe taker or he is absolutely innocent. Regarding the case, it is necessary to analyse the Swiss accounts of Tesler and the transfers that were made which can be regarded as the ones related to the business issues and bribing.
The case study consists of a company Hulliburton which is a gas and oil service business. Once, this company had bought another one which is “one of the world’s largest general contractors for construction projects in distant parts of the globe” (Hill, 2008, p. 150), Kellogg. Consequently, the issue of the case study is related to the construction projects. When Halliburton was a member of consortium along with three other construction-oriented companies from different international countries, the country (Nigeria) where the construction project should have taken place, saw political changes which could have affected the project itself and the companies involved into it.
Thus, the company under consideration have hired a lawyer who was supposed to “obtain government permits for the LNG project, maintain good relations with government officials, and provide advice on sales strategy” (Hill, 2008, p. 151). In this respect, the payment to Tesler was supposed to be about $60 million, which raises a question whether the services provided by Tesler were those stipulated by the contract. Thus, the lawyer was paid a great sum of money in order to arrange some ‘misunderstandings’ between the officials of the Nigeria’s government and the company that wanted to become the main pretender to the construction of the project.
The main issues, as suggested by United states Department of Justice (n.d.), that lay under the jurisdiction of the Foreign Corrupt Practices Act suggest the following interpretation of payments referred to as bribes:
the anti-bribery provisions of the FCPA prohibit the wilful use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay, or authorization of the payment of money or anything of value to any person, while knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to a foreign official to influence the foreign official in his or her official capacity, induce the foreign official to do or omit to do an act in violation of his or her lawful duty, or to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person (para. 1).
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Consequently, it is necessary to analyse whether the payment is facilitating involvement into the project or it is merely a payment for some personal services.
Eight Steps in the Case Analysis
As the case concerns the business projects and legal issues, the most appropriate model to be applied to this study case is the “eight-step model” that can assist while making ethical decisions in business suggested by Trevino & Nelson (2007). This model includes eight steps, according to which the ethical decision making can be analysed and made.
Step one. Gather the facts
When a person is involved into bribery or at least is claimed to have been involved, the complicity in the crime should be thoroughly proved in order to avoid false claims and casting slurs upon an innocent person. In this case, the information is not enough to prove that Jeffrey Tesler is a bribe taker because his accounts are personal and the sums of money transferred from his accounts are not as great as those he received for the services provided to the Kellogg. When a person receives some money to pay bribes, this person should receive some money that would compensate the risk of being caught while bribing or later when the complicity can still be proved. Thus, when the payments are transferred from one account, they are sure to appear at some other place. Consequently, the bribery is not proved until all participants are found because the bribe is given by somebody to someone.
Step two. Ethical issues
The main ethical issues of the case under discussion include some aspects that should be touched upon while regarding the case objectively. While the ethical decision is made – however, the concept of business excludes the concept of ethics, ethical decisions, and ethical decision-making – it is necessary to define all pros and cons, each and every possibility that a person could be involved into bribery as well as totally exclude such possibility.
One of the major areas to which the ethical decisions are related is the fair and healthy competition. Thus, when the company under consideration faced the political changes in the country where the construction project should have taken place, its officials decided to become involved with the issues related to arranging the business issues through the hired lawyer. Moreover, the consortium was created in order to avoid unhealthy competition and unfair offerings.
Step three. Affected parties (stakeholders)
The affected parties in this case include the companies that were involved into participation in the construction project consortium and were excluded from the competition “Technip of France and JGC of Japan, …(and) ENI of Italy” (Hill, 2008, p. 151). Thereby, the companies were supposed to follow the common rules and ethical decision-making strategies in business. However, the Kellogg (presented by Albert J. Stanley “who was head of M. W. Kellogg and then Halliburton’s KBR unit” (Hill, 2008, p. 151) had violated the common rules in order to win the tender and get more profit.
Though the Halliburton had fired its head and advised all other members of the consortium to establish severe relationships with him as well, it is unnecessary to mention that the head of the company was not the last person in it and the board should have known about the fees of the hired and outsourced employees.
Step four. Consequences
The consequences of all ethical decisions that are to be made should be considered in advance because many parties may suffer losses. When the business is built according to the principles of the ethical decision-making, it is necessary to think about the affected parties that may become effective partners in future or the cooperation with which can benefit more than unethical decision-making.
Thus, the Kellogg’s head is claimed to have been bribed by the lawyer or the lawyer had received a sum of money from the company’s head. Every option can be regarded as a possible one. However, it is necessary to analyse the fact of bribery itself because the bribery includes a person, some payment, and an action or services provided in exchange for certain payment. It is doubtful that Stanley had received some money from Kesler for some service because it was Kesler who provide certain services to the Kellogg headed by Stanley.
Step five. Obligations
The obligations of moral ethical decision-making include certain actions that should be performed in order to be treated as ethical ones. When a company violates the rules established for all members of the consortium, it cannot be regarded as ethical decision-making. The bribery cannot be considered as ethical decision-making either, though it is hard to prove in this case. When a company is engaged into a certain agreement which presupposes participation of more than one party, it is necessary to follow the rules established by the member parties. As soon as the rules are violated, the company cannot be considered the one involved into ethical decision-making.
The major obligations of the member parties include non-violation of the common rules. As Kellogg violated the rules concerning the fair competition and had provided Kesler with money that was supposed to be paid to certain officials, it had broken its obligation.
Step six. Character and integrity
The ethical decision-making emphasises establishment and non-violation of certain rules that are typical of the ethical business, fair competition, and other issues existing in the modern international business practice. When the company is involved into certain agreement and has some obligations, it should position itself a a decision-making one with regard to the ethical issues. The integrity of the company is based on the board aware of the actions of the company’s head, its employees, and representatives.
In the case with Kellogg, Stanley, and Kesler, the Halliburton can be considered the major unit of the company that was not (as claimed) aware of the actions of its employees, a hired person, and the head. This unawareness means that the integrity of the company was not developed which resulted in bribery that was performed in order to get some personal profit. When Stanley was the head of the Kellogg and Halliburton’s KBR unit, he was interested in effective performance of the company and Kesler was the one who (as claimed) transferred the money from his personal account to the Stanley’s one.
Step seven. Potential actions
The potential actions of the ethical decision making include all the actions that should be made in order not to violate the rules established for ethics-oriented businesses. When the decision is measure for whether being ethical or not, all circumstances should be taken into account in order to ensure equal opportunities, safe conditions, and fair competition to all other participants of the business actions. The company Kellogg has been involved into the bribery scandal which resulted in the Halliburton’s desire to sell it immediately after the case with Kesler and Stanley. These coincidences may mean that the Kellogg was not the major participant in the bribery actions.
When the head is concerned in some unlawful actions which may spoil its reputation, it can make the easiest, though not always the most ethical decision which consists in making someone else guilty. In the case with Halliburton and Kellogg, the later was supposed to be profitable unless being too scandal-involving.
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Step eight. Checking the gut
The main principle of ethical decision making in business is based on fair competition and non-violation of certain rules established for companies that want to act in the international arena. When the rules are violated, it involves penalties in order to punish the parties that refuse to act in accordance with commonly established laws and rules. As a rule, the ethical decisions are based on consideration of obligations, affected parties, consequences, and other issues that may be related to the decisions and may influences other business than the one which is involved into he ethical decision-making.
The final aspect of ethical decision-making includes ability to admit the mistakes and even the violation of the internationally established laws. When the head (or the owner of the unit) can prevent the violation of international laws by its representatives, employees, or hired workers, this company can be considered a truly ethical one.
Ethical decision making can be considered a new niche in the international business practice as it includes numerous issues that should be taken into account in order not to become involved into unlawful matters. When the company enters the international arena, it should be aware of certain rules that are typically formulated in laws and acts in order not to violate those. Violation of the abovementioned acts is regarded as the violation of the international law. When the company is involved into unlawful actions, it should be governed by a person or a board that would be able to stop the unlawful actions and run the company in accordance with commonly based principles of the international business and ethical decision-making in business.
Hill, C. W. L. (2008). Ethics in international business. In Hill (Ed.), International business. (Chapter Four, pp. 125-163). New York: McGraw-Hill. Web.
Trevino, L. K., & Nelson, K. A. (2007). Book-managing business ethics: Straight talk about how to do it right. (4th ed.). Danvers, MA: John Wiley & Sons.
United States Department of Justice. (n.d.) Foreign Corrupt Practices Act: An overview. Web.