ESSAY ON GLOBAL BRIBERY IN

BUSINESS

SUBJECT : RESEARCH METHODS & BUSINESS ETHICS

NAME: SUBROTO CHAKRABORTY
STUDENT NUMBER: 1144979
INTRODUCTION
Bribery is an act of offering, receiving, or soliciting something valuable in exchange for influence or a
favourable outcome. Bribery is a very subjective issue and varies from one culture to another. In some coun-
tries it is seen as a mandate to bribe certain people in position to power to get favourable business decision.
The value of the bribe can range from a bottle of wine to all expenses paid vacations. The political and social
consequences of bribery can be huge. It may result in public distrust of government institutes. The citizens
are also encouraged to disobey rules as they perceive the government to be engaged in corruption and feel no
compulsion to follow rules themselves. Bribery can also have long term environmental effects and thus this
is not a crime without victim. In certain African counties, we have seen the detrimental effect on environ-
ment where local governments have allowed the country’s natural resources to be drained out by companies
from developed countries. Often, these unethical acts lead to severe drought, famine, depletion of air quality
and contaminated drinking water which leads to diseases and even death in some instances.

In both the United States and the United Kingdom, bribery is a criminal act and can result in severe penalties,
including fines and imprisonment. However, despite the legal prohibition against bribery, it remains a preva-
lent problem in both countries. In this essay, we will examine the issue of bribery in two US based multi-na-
tional companies Pfizer & Ralph Lauren through the lens of several ethical theories, including utilitarianism,
Kant's categorical imperative, consequentialism, and deontology.

Utilitarianism is an ethical theory that professes that the right action is the one that benefits everyone and re-
duces overall pain and suffering. From a utilitarian perspective, bribery is generally seen as morally wrong
because as it does not promote the greatest good for the greatest number of people. Instead, bribery benefits
only a small number of individuals at the expense of society as a whole. In some instances bribery can lead
to environmental calamities due to corrupt practices in mines, rivers, mountains which are

Kant's categorical imperative is a moral theory that maintains that if an action can be categorised as a univer-
sal rule, it is morally justified. To put it another way, an action is morally correct if it can be declared a rule
that everyone must obey. From this perspective, bribery is morally wrong because it violates the principle of
fairness and equality. If everyone were allowed to bribe, the system would become corrupt and would not
work for the benefit of all.

The theory of Consequentialism describes that the morality of an action should be judged based on its out-
comes or consequences. From this perspective, bribery might be seen as morally acceptable if it leads to pos-
itive consequences, such as increased economic growth or improved relations between countries. However,
in most cases, the negative consequences of bribery, such as corruption and the undermining of trust in gov-
ernment, far outweigh any potential benefits.

Deontology is a moral theory that holds that an action is morally right or wrong based on its adherence to a
moral rule or duty. From this perspective, bribery is morally wrong because it violates the duty to be honest
and to act in good faith. Bribery is seen as a betrayal of trust, and it undermines the integrity of the person
and the institutions involved.

In conclusion, bribery is a complex ethical issue that can be viewed from multiple perspectives. From a utili-
tarian perspective, bribery is seen as morally wrong because it does not promote the greater good for the sub-
stantial number of people. From a Kantian perspective, bribery is morally wrong because it violates the prin-
ciple of fairness and equality. From a consequentialist perspective, bribery is morally wrong because the neg-
ative consequences far outweigh any potential benefits. And from a deontological perspective, bribery is
morally wrong because it violates the duty to be honest and to act in good faith. Despite the legal prohibition
against bribery in the US and UK, the problem remains a significant challenge for both countries and will
continue to be an important ethical issue for society to address.

We will now look at 2 different incidents related to bribery by companies registered in US. Pfizer & Ralph
Lauren. We will try to apply the various ethical theories we have discussed earlier to each of the cases to de-
termine if the actions were unethical and we will also do a stakeholder analysis to find out who were ef-
fected by the unethical practices carried out by the organisation or by people representing them.

PFIZER
Pfizer, a multinational pharmaceutical company, has been the subject of bribery investigations in several
countries under the Foreign Corrupt Practices Act (FCPA) of the United States. The FCPA prohibits U.S.
companies and their intermediaries from giving bribes to foreign officials for the purpose of acquiring or re-
taining business.

In the case of Pfizer, the company was found to have bribed foreign doctors, health professionals and gov-
ernment officials in several countries, including China, Russia, and Italy, in order to gain regulatory ap-
provals to maximise sales. Pfizer also tried to cover-up these bribes through illegal accounting measures by
recording such illegal transactions as promotion and advertising cost.

Pfizer was charged with two criminal counts which included conspiracy to violate FCPA and violating
FCPA’s anti-bribery provision. Pfizer was never prosecuted as they agreed to pay $60 million fine and
agreed to form regulatory bodies for each of its company and foreign subsidiary to track and report any act of
corruption manifesting in them. The top officials at Pfizer stated that they were unaware of such gross mis-
conduct taking place in their organisation.

APPLICATION OF ETHICAL THEORIES

UTALITARIANISM
From a utilitarian perspective, the actions of Pfizer in this case can be seen as unethical. Utilitarianism is a
theory of ethics that holds that the moral value of an action is determined by its ability to promote the great-
est amount of overall happiness or well-being. In this case, Pfizer's actions may have resulted in increased
profits for the company, but they also had negative consequences for society as a whole. The bribes paid to
foreign officials may have distorted the competitive process and led to the award of contracts to companies
that were not the most qualified or efficient. This could have resulted in higher prices for consumers and
lower quality products or services.

DEONTOLOTY
From a deontological perspective, the actions of Pfizer can also be seen as unethical. Deontology is a theory
of ethics that holds that the moral value of an action is determined by its adherence to a set of moral rules or
duties. The FCPA is a clear moral rule that prohibits companies from bribing foreign officials. Pfizer's ac-
tions in this case can be seen as a violation of this rule and therefore unethical.
KANTE’S CATEGOTICAL IMPERATIVE
From the point of view of Kant's categorical imperative, Pfizer's actions are unethical because they are not
universalizable. Kant's Categorical Imperative states that an action is morally right if it becomes an universal
law. In this case, if Pfizer's actions of bribery should become a universal law it would be a disaster for the so-
ciety as a whole, as it would lead to a distorted competition and the award of contracts to companies that are
not the most qualified or efficient, which would harm society as a whole.

CONSEQUENTIALISM
From a consequentialist perspective, the actions of Pfizer can also be seen as unethical. Consequentialism is
a theory of ethics that holds that the righteousness of an action is determined by its consequences. In this
case, Pfizer's actions may have resulted in increased profits for the company, but they also had negative con-
sequences for society as a whole. The bribes paid to foreign officials may have distorted the competitive
process and led to the award of contracts to companies that were not the most qualified or efficient. This
could have resulted in higher prices for consumers and lower quality products or services.

In conclusion, Pfizer's actions in this bribery case can be seen as unethical from various business ethics theo-
ries perspectives, such as Utilitarianism, Kant's Categorical Imperative, Consequentialism and Deontology.
Pfizer's actions violated the FCPA which is a federal law that prohibits companies and individuals from brib-
ing foreign officials in order to obtain or retain business, and also created negative consequences for society
as a whole.

Now we can do a stakeholder analysis to know more about the stakeholders who were directly impacted by
Pfizer’s action and we would also like to see the various degree to which they were impacted.

STAKEHOLDER ANALYSIS

A stakeholder analysis of the Pfizer bribery case shows that the company's actions had a significant impact
on several groups of stakeholders.

SHAREHOLDERS

The first group of stakeholders affected by Pfizer's actions are the company's shareholders. The company's
shareholders are likely to be negatively impacted by the fines and penalties that Pfizer will have to pay as a
result of the bribery investigations. Additionally, the company's reputation may be damaged, which could
lead to a decrease in stock value and a loss of investor confidence.

EMPLOYEES

Another group of stakeholders affected by Pfizer's actions are the company's employees. The company's em-
ployees may be negatively impacted by the fines and penalties that Pfizer will have to pay, as well as by the
company's damaged reputation. Additionally, the company's employees may also be negatively impacted by
the negative publicity surrounding the bribery investigations, which could lead to a decrease in morale and a
loss of trust in the company.

CUSTOMERS

Another group of stakeholders affected by Pfizer's actions are the company's customers. The customers may
be negatively impacted by the company's damaged reputation, which could result in loss of trust in the com-
pany's products and a decrease in sales. Additionally, the company's customers may also be impacted by the
negative publicity surrounding the bribery investigations, which could lead to a loss of trust in the company.

SUPPLIERS

Finally, the last group of stakeholders affected by Pfizer's actions are the company's suppliers. The com-
pany's suppliers may be negatively impacted by the company's damaged reputation, which could lead to a
loss of trust in the company and a decrease in sales. Additionally, the company's suppliers may also be nega-
tively impacted by the negative publicity surrounding the bribery investigations, which could lead to a loss of
trust in the company.

In conclusion, the Pfizer bribery case underlines the importance of ethics in business. The company's actions
had a significant impact on several groups of stakeholders, including shareholders, employees, customers
and suppliers. Pfizer's actions also violated the FCPA, which is a reminder that companies must comply with
laws and regulations in addition to adhering to ethical principles. Businesses, which includes top officials
must be aware of the potential negative impact on stakeholders that can result from unethical behaviour, and
take measures to ensure that their actions are above reproach. The organisation must form self-regulatory
bodies which will
RALPH LAUREN
Ralph Lauren, the luxury fashion brand, has been involved in a bribery scandal in Argentina. The case cen-
ters around allegations that the company's subsidiary in Argentina, Ralph Lauren Argentina S.A., paid bribes
worth $593,000 to government officials in 2010 in order to avoid customs inspections and taxes on imported
goods. Surprisingly, this incident was reported to the FCPA by Ralph Lauren themselves when they con-
ducted a global internal control and compliance effort in 2010. The FCPA agreed to entered into a non prose-
cution agreement (NPA) with Ralph Lauren the first of its kind. The company also agreed to pay $700,000
fine from the profits they accumulated from bribing officials.

Even though Ralph Lauren did take action and tried cooperating with FCPA, they cannot be exonerated from
all the responsibilities of the bribery scandal. The action is still unethical and it was carried out by a repre-
sentative of the company.

APPLICATION OF ETHICAL THEORIES

The bribery case of Ralph Lauren in Argentina can be analysed through various ethical theories, including
utilitarianism, Kant's categorical imperative, consequentialism and deontology. Each of these theories sug-
gests that Ralph Lauren's actions were morally questionable, as they violated the rules and laws that govern
society and had negative consequences for individuals and institutions involved.

UTALITARIANISM
From a utilitarian perspective, the actions of Ralph Lauren can be seen as morally questionable. Utilitarian-
ism is a theory that holds that the moral worth of an action is determined by its ability to promote overall
happiness or pleasure. In this case, while the bribes may have helped the company secure business and avoid
taxes, they also had negative consequences for society as a whole, such as undermining the integrity of gov-
ernment officials and eroding trust in institutions. Although, upon conducting internal

KANTE’S CATEGOTICAL IMPERATIVE

Kant's categorical imperative also suggests that the actions of Ralph Lauren were morally wrong. According
to Kant, an action can only be considered morally good if it can be willed as a universal law. In this case, if
all companies were to bribe government officials to secure business deals, it would lead to a complete break-
down of trust and integrity in government institutions, which cannot be willed as a universal law.

CONSEQUENTIALISM
From a consequentialist perspective, Ralph Lauren's actions can also be considered morally wrong. Conse-
quentialism is a theory that holds that the moral worth of an action is determined by its consequences. In this
case, while the bribes may have brought some short-term benefits to the company, they also had negative
consequences for society and the individuals involved.
DEONTOLOTY
Deontology, also suggests that Ralph Lauren's actions were morally wrong. Deontology is a theory that holds
that some actions are morally right or wrong in themselves, regardless of their consequences. Bribing foreign
government officials is considered morally wrong in itself, as it is a violation of the rules and laws that gov-
ern society.

It's important for any business to have a strong ethical culture in place, to avoid such scandals, and to ensure
that the company's actions align with the moral principles of the society.

STAKEHOLDER ANALYSIS

In order to understand the impact of this bribery scandal on Ralph Lauren and its stakeholders, it is important
to conduct a stakeholder analysis. A stakeholder analysis is a process that identifies the key groups of people
or organisations that are affected by a particular decision or action. The stakeholders in this case include
shareholders, customers, employees, suppliers, and the government.

SHAREHOLDERS

Shareholders own the organisation and have a vested financial interest in its success. They may be impacted
if the bribery scandal triggers a downturn in the company's stock price or a loss of business.Shareholders
may also be impacted by the potential fines and legal fees that the company may have to pay as a result of
the FCPA charges. However, in the case of Ralph Lauren, the monetary damages and loss of face value were
minimised due to the honest and pro-active approach demonstrated by the company when they cooperated
with FCPA.

CUSTOMERS

Customers are the consumers who purchase Ralph Lauren's products. They may be negatively impacted by
the bribery scandal if it leads to a decline in the company's reputation or a decrease in product quality. Cus-
tomers may also be impacted by the potential increase in the cost of Ralph Lauren's products if the company
has to pay fines or legal fees as a result of the FCPA charges. This was not the actual outcome once cus-
tomers knew about Ralph Lauren’s honest approach, it worked as a positive Public Relations and reinstated
any lost trust in brand and the values it stands by.

EMPLOYEES

Employees are the people who work for Ralph Lauren. They may be negatively impacted by the bribery
scandal if it leads to a decline in the company's reputation or a decrease in business. Employees may also be
impacted by the potential loss of jobs if the company has to cut costs as a result of the FCPA charges. In the
end none of the negative scenarios manifested and all the employees were urged to be more vigilant and
transparent in their activities within the organisation.
SUPPLIERS

Suppliers are the companies that provide goods and services to Ralph Lauren. They may be negatively im-
pacted by the bribery scandal if it leads to a decline in the company's reputation or a decrease in business.
Suppliers may also be impacted by the potential reduction in orders from Ralph Lauren if the company has to
cut costs as a result of the FCPA charges.

GOVERNMENT

The government is the entity that enforces the FCPA and may be negatively impacted by the bribery scandal
if it undermines the integrity of the government's customs and tax collection process. This was a special case
as the organisation involved in the scandal was the first one of inform the government , in this case the
FCPA. The extremely ethical approach by Ralph Lauren, helped the judiciary as they did not have to spend
recourses in investigating the case which might take years to resolve and it also set an example for other
companies which might feel more confidence in reporting such issues because it benefits them in cooperating
with government.

In conclusion, the bribery scandal involving Ralph Lauren in Argentina has potential negative impact on the
company's stakeholders. Shareholders, customers, employees, suppliers, and the government may all be af-
fected by the allegations of corruption

Ralph Lauren’s conduct was quite exemplary as they pro-actively informed FCPA about the bribery scandal.
This prevented the organisation from the additional fines and legal fees that the company may have to pay as
a result of the FCPA charges. Securing a non prosecution agreement (NPA) with FCPA meant Ralph Lauren
was spared from long drawn out investigation and they were also able to prevent their brand name from be-
ing tarnished. They did pay fine of approximately $ 700,000 which is nothing

It is important to note that the FCPA is a federal law that was enacted to combat corruption in international
business, and any violation of it may lead to severe consequences. The FCPA applies to all companies that
are listed on a United States stock exchange and to any individual who is a citizen.