Ethical and Cross-Cultural Negotiations.
Chose one person to reply to:
- Were Manning’s actions legal under the Foreign Corrupt Practices Act, and what are the possible penalties for violating the act?
The Foreign Corrupt Practices Act states (1977) “It shall be unlawful for any issuer…to offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give… “. Manning assumed the duty of an issuer because he attended dinner with the prime minister to discuss the contract. Then, Manning offered to fly the prime minister to New York, which he then promised to pay for all of the prime minister’s expenses. However, according to the Foreign Corrupt Practices Act (1977) a promise or offer is acceptable if the expense was ”reasonable and bona fide expenditure, such as travel and lodging expenses, incurred by or on behalf of a foreign official… was directly related to the promotion, demonstration, or explanation of products or services”. Manning promised to fly out the prime minister because he wanted to “discuss business further” (UMUC, 2019). Further, Manning used company funds to take the prime minister to luxurious activities and restaurants because he wanted to retain the contract from the prime minister.
Even though Manning did not directly give money to the prime minister, he authorized payment for the prime minster’s two-week stay, which did not involve discussing the contract. Out of the two weeks, business was only conducted for a day. In addition, Manning can be held responsible for bribing the customs officials at Neristan. According to the Foreign Corrupt Practices Act (1977), it is unlawful to influence “any act or decision of such foreign official in his official capacity… omit to do any act in violation of the lawful duty of such official”. Manning influenced the customs officials because Manning gave each custom official $100 to clear the shipment. Custom officials act on behalf of the Neristan government and sometimes require large shipments to be inspected. Manny will likely be held responsible for offering payment to the customs officials in exchange for expediting the company’s shipment.
If Manning violated the Foreign Corrupt Practices Act, he could face imprisonment. Also, the company may have to pay the penalty. The penalty for violating the act is “a fine of up to $2 million per violation. Likewise, an individual may face up to five years in prison and/or a fine of $250,000 per violation of the anti-bribery provision” (Woody, 2018, p. 275).
- Were Manning’s actions legal under the UK Bribery Act and what are the possible penalties for violating the act?
Based on the UK Bribery Act (2010), an individual is guilty of bribing an official if “intention is to influence F (government official) in F’s capacity as a foreign public official…intend to obtain or retain business, or an advantage in the conduct of business.”. Manning bribed the prime minister because he stated: “If, after we are done conducting business, you want to see the sites, I can show you around the city, and you can stay on us for a while.” (UMUC, 2019). If the contract were to go through, the prime minister would be given the opportunity to stay for two weeks to explore the city. Then, Manning bribed the customs officials by providing each of them $100. Manning tried to obtain an advantage in the conduct of the shipment because it would take weeks to clear the load. By paying the customs officials, the load was cleared within a day. Based on the UK Bribery Act, Manning violated the law.
Penalties for violating the UK Bribery Act include imprisonment and a fine. If the organization allowed or was aware of the bribery, the company will be held accountable as well. The penalty for the offense that proceeds without a jury is imprisonment for a “term not exceeding 12 months, or to a fine not exceeding the statutory maximum, or to both,” (UK Bribery Act of 2010). Whereas the penalty for being convicted as an individual can face imprisonment for up to ten years along with a fine. The company can face an unlimited fine depending on the severity of the offense.
- Were Manning’s actions ethical, particularly in light of differing cultural norms?
While some cultures conduct “negotiations as a business activity”, some cultures “develop a trusting relationship” before negotiating (Dias, 2012). According to the prime minister, the culture of Neristan values relationships. The prime minister then stated, “It is customary in Neristan for business associates to help each other prosper” (UMUC, 2019). It is possible that Manning wanted to further his relationship with the prime minister by attending a Broadway show and traveling the city together. Spending two weeks in the town would allow Manning to form a relationship with the minister. However, Manning did act unethically because the restaurants and the hotel the prime minister stayed at was expensive.
On the contrary, Manning did act ethically because he turned down the prime minister’s request for a wire transfer. Any payment used to influence a decision is considered bribery (Jimenez & Pulo, n.d). Overall, it is believed that Manning acted unethically because he bribed the prime minister through high-end restaurants and activities in exchange for the contract.
15 U.S. Code § 78dd–1 – Prohibited foreign trade practices by issuers. (n.d.). Retrieved from https://www.law.cornell.edu/uscode/text/15/78dd-1
Dias, L. P. (2012). Ethical and Cross-Cultural Negotiations. In Beginning Human Relations. Beginning Human Relations. Retrieved from https://2012books.lardbucket.org/books/beginning-human-relations/index.html.
Jimenez, G. C., & Pulos, E. (2016). Good corporation, bad corporation: Corporate social responsibility in the global economy. Geneseo, NY: Open SUNY Textbooks, Milne Library (IITG PI), State University of New York at Geneseo.
UK Bribery Act of 2010. C. 23 §6 (2010).
UMUC. (2019). Global Shippers, Inc. Retrieved from https://leocontent.umuc.edu/content/umuc/tgs/mba/mba630/2191/course-resource-list/global-shippers-inc.html?ou=345131
Woody, K. (2018). ““Declinations With Disgorgement” In FCPA Enforcement. University of Michigan Journal of Law Reform, 269-311. Retrieved from http://web.b.ebscohost.com.ezproxy.umuc.edu/ehost/pdfviewer/pdfviewer?vid=4&sid=bf1b2351-c005-4f41-adf5-ac90958a9d68@sessionmgr102
Were Manning’s actions legal under the Foreign Corrupt Practices Act, and what are the possible penalties for violating the act?
Under the Foreign Corrupt Practices Act (FCPA), Manning’s actions were illegal when it came to the travel, entertainment and other value given to the Neristan prime minister. Although Manning did not give the prime minister then $100,000, he requested in his account, he made up for it by paying for an extravagant dinner of $3,500, luxurious penthouse in New York, first-class flight Los Angeles, Broadway entertainment and the paid two weeks stay. Manning knew that his actions would incentivize the prime minister to “award” Gold Shippers, Inc. the contract based on the travel and the entertainment which may have exceeded the $100,000 payment. It is clear that small gifts and token of appreciation are acceptable when negotiating with other government officials or business people, but Manning exceed that exception by spending large amounts of money to ensure a contract was granted when otherwise it would not have happened. The Department of Justice (DOJ) and the Securities Exchange Commission (SEC), view the larger or more extravagant the gift, the more likely it was given with an improper purpose (U.S. Department of Justice, Criminal Division, and U.S. Securities and Exchange Commission, Enforcement Division, 2012).
Possible individual penalties for violating the FCPA, may include criminal penalties up to $250,000 in fines per violation and up to 5 years in prison. Civil penalties up to $16,000 per violations. Companies may also be held liable with criminal penalties have fines up to $2 million per violation and civil penalties up to $16,000. It is important to note that employers cannot pay the fine for their employees or agents (n.d.).
Were Manning’s actions legal under the UK Bribery Act and what are the possible penalties for violating the act?
Under the UK Bribery Act, “facilitation payments are not permitted and are considered illegal bribes (n.d.).” Furthermore, the UK Bribery Act prohibits private-to-private bribery, or from private persons as well as public officials (n.d.).
The penalties under the UK Bribery Act may result in longer prison sentences for individuals (10 years) and there are no caps on fines, therefore allowing both individuals and companies to face unlimited fines for violating its provisions (n.d.).
Were Manning’s actions ethical, particularly in light of differing cultural norms?
According to Global Business Ethics (n.d.), “Paying bribes is relatively common in many countries…” but it is not common or accepted in the United States. Manning’s actions were unethical because he knows that under FCPA he is not allowed to give other governmental officials extravagant gifts that may give rise to investigations. Furthermore, under the FCPA, Manning was allowed to offer “grease payments” in order to “”to expedite or to secure the performance of a routine governmental action by a foreign official, political party, or party official” (FCPA, 15 U.S.C. 78dd-2).” However, this is not accepted by the UK Bribery Act, so it can also be considered unethical behavior that may result in Manning and the company to be penalize with extensive fines.
In conclusion, Manning’s actions were unethical because even though some gift giving is expected in countries like Japan, it is established that these gifts cannot be extravagant nor go over preset limits.
Foreign Corrupt Practices Act of 1977, Pub. L. 95-213, 91 Stat. 1494, codified as amended at 15 U.S.C. §§78dd-1 et seq. Retrieved from: https://www.gpo.gov/fdsys/pkg/STATUTE-91/pdf/STATUTE-91-Pg1494.pdf
Global Business Ethics. (n.d.). Retrieved from https://leocontent.umuc.edu/content/umuc/tgs/mba/mba630/2191/learning-resourcelist1/global-business-ethics.html?ou=345131
U.S. Department of Justice, Criminal Division, and U.S. Securities and Exchange Commission, Enforcement Division. (2012). A resource guide to the FCPA U.S. Foreign Corrupt Practices Act, Retrieved from: https://www.justice.gov/sites/default/files/criminal-fraud/legacy/2015/01/16/guide.pdf
First, slipping $ 100 to the customs officials was illegal. Under the Act, no issuer from any entity whose shares are publicly traded on the US exchange or any director, employee or agents may corruptly pay, offer or authorize anything to a foreign official to secure an improper advantage (Randall, L. H). Since Manning was not acting on behalf of the company by offering the bribe, he may receive fine up to $100,000 or an imprisonment for up to five years. The above provisions are meant to make companies plan and sustain accounting systems which tightly control and accurately record all dispositions of business assets.
Secondly, under the UK Bribery Act, everything Manning did was illegal. The Act states that the offense of bribing other people comprises the presentation, making promises or handing over fiscal or other benefits with the intent of inducing or rewarding inopportune conducts (Rose, C). The $100 to the customs officials was a bride, and the extended trip was a promise that would lead to an advantage. According to this Act, therefore, Manning knew or believed the Nerista’s Prime Minister’s acceptance of the gifts would amount to improper conduct. Under this, Manning is subject to a maximum of 10 years’ imprisonment or even an unlimited fine. This Act sought after placing a burden of proof on companies to show they have adequate procedures in place that would prevent bribery (Morgenthau, H. J). It is the absence of this procedure that Manning’s acts became unethical.
Even though some of Manning’s actions were generous, there was a hidden intention, which makes everything he did unethical. Even considering the difference in cultural norms, corruption is illegal and unacceptable in almost all countries (Bowie, N. E). Gaining an advantage by his hospitality offer and bribing the official was unethical, and morally, he was supposed to express social responsibility to carry out business without engaging in such actions which would influence actions.
Bowie, N. E. (2017). Business ethics: A Kantian perspective. Cambridge University Press.
Doh, J. P., Rodriguez, P., Uhlenbruck, K., Collins, J., & Eden, L. (2003). Coping with corruption in foreign markets. Academy of Management Perspectives, 17(3), 114-127.
Morgenthau, H. J. (2017). Positivism, functionalism, and international law. In The Nature of International Law (pp. 159-184). Routledge.
Randall, L. H. (1997). Multilateralization of the Foreign Corrupt Practices Act. Minn. J. Global Trade, 6, 657.
Rose, C. (2012). The UK Bribery Act 2010 and accompanying guidance: Belated implementation of the OECD Anti-Bribery Convention. International & Comparative Law Quarterly, 61(2), 485-499.
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Where Manning’s actions legal under the Foreign Corrupt Practices Act, and what are the possible penalties for violating the act?
According to Goodwin (2019), a company or business can adjust its business practices to that county its operating in to the culture practices expect for gift giving of anything in monetarily to government officials to gain advantage of a contract which Manning did illegally. Manning violated the Foreign Corrupt Practices Act, which is enforced by the US Government. Though Manning did not provide direct payment to the prime minister of Neristan, Manning paid for the expensive meal that could be viewed by the Department of Justice as an extravagant meal, paid for a trip to New York, and a trip to Los Angels (Global Shippers, Inc., 2019) all of which is categorized by the Foreign Corrupt Practices Act (FCPA)(2019) as illegal by influencing the prime minister to award this contract.
Manning and Global Shippers could be “subject not only to substantial fines, but also to jail time” (Goodwin, 2019). Both Manning and Global Shippers are at risk and accountable for this action because Manning utilized the corporate accounts. These accounts are to be in accordance to the accounting provisions and follow the anti bribery provisions of the FCPA Foreign corrupt practices act, (2019).
Foreign Corrupt Practices Act. (2019). Learning resource. University of Maryland University College. https://leocontent.umuc.edu/content/umuc/tgs/mba/mba630/2191/learning-resourcelist1/foreign-corrupt-practicesact.html?ou=345131
Global Shippers, Inc. (2019). Course Resource. University of Maryland University College. https://leocontent.umuc.edu/content/umuc/tgs/mba/mba630/2191/course-resource-list/global-shippers-inc.html?ou=345131
Goodwin R. (2019). Learning Resource. University of Maryland University College. https://leocontent.umuc.edu/content/umuc/tgs/mba/mba630/2191/course-resource-list/introduction-to-crossculturalawareness.html?ou=345131
Were Manning’s actions legal under the UK Bribery Act and what are the possible penalties for violating the act?
Manning’s actions of paying the customs personnel were legal under the UK Bribery Act. When reviewing what are facilitating or expediting payments (2019), Manning did not ask to overlook documents but simply expedite the inspection to facilitate the delivery, all of which are legal in accordance to the UK Bribery Act and facilitating or expediting payments (2019). However, his bribery of the prime minister where prohibited in accordance to Global Bribery (2019) because he is a public official in the country of Neristan. Additionally the UK prohibits private-to-private bribery’s, which Manning facilitated with dinner and the trips to the US.
Penalties for violation of the UK bribery act for both Manning and Global Shippers are extensive. Both may be held for civil and criminal penalties. According to Global Bribery (2019),
“up to $250,000 in fines per violation and up to 5 years in prison and civil penalties of up to $16,000 per violation. For companies, the criminal penalties may include a fine up to $2 million per violation and civil penalties up to $16,000 per violation. Moreover, employers are not permitted to pay the fines of their employees or agents” (Global Bribery, 2019).
Manning has placed both himself and Global Shippers at serious risk in accordance to the UK guidelines. And it would be recommended that Global Shippers and Manning get legal counsel, soonest.
Global Bribery. (2019). Learning Resource. University of Maryland University College. https://leocontent.umuc.edu/content/umuc/tgs/mba/mba630/2191/learning-resourcelist1/global-bribery.html?ou=345131
What are Facilitating or Expediting Payments. (2019). Learning Resources. University of Maryland University College. https://leocontent.umuc.edu/content/umuc/tgs/mba/mba630/2191/learning-resourcelist1/what-are-facilitatingorexpeditingpayments.html?ou=345131
Were Manning’s actions ethical, particularly in light of the differing cultural norms?
Manning’s and ultimately Global Shippers actions were not ethical and will be under scrutiny by the Department of Justice. According to Gifts, Travel, Entertainment, and other things of value (2019), the meal will be considered extravagant in that it was the most expensive wine on the menu and not needed. The travel to New York paid by the corporation was ethically okay, however, the most expensive penthouse is ethically wrong and a seven-day trip to Los Angles paid by the corporation is extremely excessive with the presence of Manning, an employee.
Manning was not engaging in cultural norms with the prime minister. The review of County Cultural Differences (2019), Manning had no intentions of the workplaces values, attitudes and beliefs of the culture in the country of Neristan but to only secure the $20 Million revenue deal, which is ethically wrong.
Country Cultural Differences. (2019). Leaning Topic. University of Maryland University College. https://leocontent.umuc.edu/content/umuc/tgs/mba/mba630/2191/learning-topic-list/country-culturaldifferences.html?ou=345131
Gifts, Travel, Entertainment, and Other Things of Value. (2019). Learning Resource. University of Maryland University College. https://leocontent.umuc.edu/content/umuc/tgs/mba/mba630/2191/learning-resourcelist1/gifts-travel-entertainmentandotherthingsofvalue.html?ou=345131
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