Bribery

Definition

Bribery is the act of offering, giving, receiving, or soliciting of something of value to influence the behavior of an individual in the performance of their duties, often in the context of a business or government setting. It is considered an unethical and illegal practice that undermines fair competition and the rule of law.

5 Must Know Facts For Your Next Test

1. Bribery can occur in both the public and private sectors, and can involve government officials, corporate executives, or any individual in a position of power.
2. Bribery undermines fair competition, erodes public trust, and can lead to suboptimal decision-making that benefits the briber at the expense of the public interest.
3. Bribery is often used to secure government contracts, bypass regulations, or obtain preferential treatment in business dealings.
4. Anti-bribery laws, such as the Foreign Corrupt Practices Act (FCPA) in the United States, aim to prevent and punish bribery in international business transactions.
5. Whistleblower protections and corporate compliance programs are important tools in the fight against bribery and corruption.

Review Questions

• Explain how bribery undermines business ethics and fair competition.
  • Bribery undermines business ethics and fair competition by giving unfair advantages to those willing to engage in unethical and illegal practices. It allows companies or individuals to bypass normal procedures and regulations, secure contracts or favorable treatment through illicit means, rather than competing on the merits of their products, services, or qualifications. This distorts the market, stifles innovation, and erodes public trust in the integrity of business and government institutions.
• Describe the role of anti-bribery laws and corporate compliance programs in addressing bribery.
  • Anti-bribery laws, such as the FCPA, aim to deter and punish bribery in international business transactions by imposing severe penalties on both the briber and the recipient. These laws help to create a level playing field and promote fair competition. Corporate compliance programs are also crucial in addressing bribery by implementing internal controls, training employees, and establishing whistleblower protections to identify and prevent bribery within the organization. These programs help companies mitigate the risk of bribery and maintain ethical business practices.
• Evaluate the long-term consequences of bribery on a company's reputation and stakeholder relationships.
  • The long-term consequences of bribery on a company's reputation and stakeholder relationships can be devastating. If a company is found to be engaged in bribery, it can face significant legal penalties, damage to its brand and public image, loss of customer and investor trust, and strained relationships with key stakeholders, such as suppliers, regulators, and the local community. The reputational harm caused by bribery can be difficult to recover from and can have far-reaching effects on the company's ability to operate and maintain a competitive advantage in the market. Ultimately, the cost of engaging in bribery often outweighs any short-term benefits, making it a high-risk and unethical business practice.

Related terms

Corruption: The abuse of entrusted power for private gain, often involving bribery or other illicit means.

Extortion: The act of obtaining something, especially money, through force or threats.

Kickback: A form of bribery where a portion of the money obtained through a transaction is illegally returned to the person who facilitated the deal.