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Unethical or merely the cost of doing business..?
Whilst overseas and speaking with a group of twelve MBA students, I posed the hypothetical question “You run a business and are tendering for a new contract. It becomes apparent to you that the managing director of the company that has tendered out the contract has a real weakness for expensive meals. In order to provide your organisation with the best chance of being successful, do you take the managing director out for a lavish dinner?”
Unanimously it was considered perfectly fine to do this.
I then asked the question “Let’s say that instead of having a weakness for expensive meals the managing director had a weakness for expensive gifts. Is it ok to buy them such a gift instead of taking them out for a meal?”
With three exceptions it was considered that this too was acceptable.
Taking this one step further I posed the following question to those nine students who had felt that gift – buying had been acceptable “What if you couldn’t decide on what gift to buy… Would it be ok to simply give the managing director cash to the value of the gift that you were going to purchase?”…
Unanimously the answer came back that this was completely unnaceptable.
Recently I posed the questions above to a group of fifteen business professionals in another country and surprisingly, all considered that providing a gift of cash was merely the cost of doing business and some could also provide examples of this having occurred within organisations that they had been associated with.
I found this difference of opinion very interesting and somewhat surprising.
So… In this scenario where do you draw the line? Is there a line? Perhaps it isn’t all that simple a question…
Whatever your view – I’d welcome your comments and questions, please discuss.
Andy.
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2 Answers
Thanks for posing this question which opens the field for quite a number of approaches. Regretfully, there is not a uniform set of rules used worldwide, which has allowed for corruption of the worst degree in many parts of the world, including the US as well.
As there is no one policy that fits all, I offer the following for dealing in the US only:
1. Lavish meals are never acceptable
2. Meals that follow substantial business discussions that are moderate in price and avoid heavy drinking are usually acceptable unless forbidden by the buyer's company policy. You should ask a buyer what his/her company's policy is on entertainment. Never ask a buyer to violate his company's policy on entertainment. For example, the US Federal Government does not allow any entertainment, so don't offer.
3. Gifts such as a T-Shirt, small clock, pen and typical logo items are acceptable and do not compromise the buyer.
4. Small favors such as driving a person to the airport are acceptable.
5. In no instance is a cash gift of any size acceptable.
Whether doing business inside or outside of the US, marketers should be aware of the Foreign Corrupt Practices Act, which has real penalties for bribery in overseas dealings. These rules apply to you and to anyone that works on your behalf, i.e. a distributor cannot do for you what you cannot do yourself.
Regretfully, if you follow the rules, there will be some business you lose to corrupt buyers and unethical sellers. I don't know how to change this. If you can find evidence that corruption has occurred, I think you are within your rights to point this out to higher ups in the buyer company as well as to law enforcement.
Very good question. I think the reason why buying a client dinner is seen as acceptable is because you are spending time with the client. This will allow you to develop your relationship with him/her while giving the client a gift is merely a bribe.
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