Organizational Case Study

In: Business and Management

Submitted By KimYoung
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Organizational Case Study
Definition of Foreign Corrupt Practices Act (FCPA)

The Foreign Corrupt Practices Act of 1977 is a US Federal law that originated with an investigation in the mid 1970’s of over 400 US companies accused of making questionable or illegal payment to foreign government officials and political parties.
The FCPA include the Securities Exchange Act of 1934 which covers to main provisions; The Anti-bribery law and the Accounting Transparency provisions. The FPA law restricts US business representatives from offering or accepting payment whether cash or kind from any foreign official, politician or political party in exchange for favorable business decisions that otherwise would not be made and is considered unethical. The law allows for small payments or gifts, sometimes considered as tips to persuade or encourage faster and better service, however companies are required to keep accurate records of these transactions which are not tax exempt.

What kind of Ethical Issue is this? The ethical issue is the potential conflict of interest and perception of bribery that could arise should the gift be accepted by the wife of the Account Executive. In the global business environment incompatible values and cultural beliefs can create conflicts with company policies and laws. This is the ethical dilemma faced by the Account Executive in this situation. While the motive for giving the gift could be tied to the cultural practices of the customer and may very well be a gesture of goodwill and appreciation, it is not guaranteed. Acceptance of the gift is against the company policy. The Account Executive must make the right ethical decision in this situation while not jeopardizing customer trust and future business.

Do you agree or disagree with the policy? I agree with the Foreign Practices Act (FPA). It appears this policy was created…...

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