Question: open a discussion and ask questions according to response the...
OPEN A DISCUSSION AND ASK QUESTIONS ACCORDING TO RESPONSE
The FCPA, Foreign Corrupt Practices Act, is another set of policies in which companies are required to adhere to when doing business globally. The difficulty that managers can face when expanding globally is that they may not fully be aware of what kind of corrupt acts could be taking place within the company in those international locations. Osland & Clinch (2013) discussed a situation in which a major company they called A&A expanded globally and purchased a separate business to merge into their current organization. What they failed to discover, for many years, was that the leaders of this newly purchased company had been profiting off of illegal business dealings by profiting from bribery. It appears that they felt that something shady was taking place, but they did not have the evidence or full knowledge of the situation until about 10 years later when internal affairs were finally made aware. The struggle that management can encounter in situations like this is that they have been the operators of that business for 10 years while the illegal activity took place right under their nose and they can now be liable for any penalties handed down. The question is whether A&A should report their findings and risk the penalties or stay quiet about the profits that they have made, which was tens of millions of dollars over the years.
From our readings about FCPA (2010), we know that any company that is expanding globally or already doing business globally should be addressing their FCPA up front and from the top of the leadership ladder. It should be understood by all members of the board and management that they will not tolerate employees who notice infractions and do not speak up and they will make sure that measures are in place to minimize the company’s risks of having FCPA infractions. It is discussed that most of these infractions can be prevented by having strong standards and policies in place as well as continual training and communication to all employees regarding these policies.
Another example of an FCPA violation is Mondelez International. As the owner of Oreo and Cadbury, they were fined $13 million by the SEC for allegedly bribing officials in India in order to be approved for a plant to be built. Best (2017) discussed that although the company did not admit to the infractions, they agreed to pay the fine in order to settle the matter. This shows us that even when there may not be 100% factual evidence of wrongdoings, a company that partakes in questionable dealings may be accused of an infraction and be force into paying penalties.
There are many obstacles that managers must face in order to expand globally, and being FCPA compliant is one of those items that if ignored could cost the company more than the benefits of moving globally. Managers should always been fully aware of who their company is working alongside or making business agreements with. They should also know what kinds of business those separate companies might be conduction, because if something happens, you could be linked to them and accused of knowing what was taking place.