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Guangxi, Bakhsheesh and the Delicate Balance of Doing Business Ethically Around the World
We in the U.S. pride ourselves on our high moral standards.Â An extramarital affair can destroy the career of a top executive or politician. In other countries, the standards are a bit different.Â Are "they" too jaded and pragmatic, and "we"Â too idealistic, or hypocritical?
Peter Rost's recent posts about goings on at Pfizer in India made me think about this. In the middle east and India, the concept of bakhsheesh is well established, like the concept of guanxi in China (and similar ideas in other parts of Asia).
I won't comment on the Pfizer story. Nobody could condone what has been alleged to be taking place at Pfizer India.
But Rost pointed to the payment of "sweets" for Diwali---gifts of liquor to local officials, which made me think of the vast cultural divide that still separates the U.S. from the rest of the world.Â Diwali is a fun holiday and a bit like Christmas here in the U.S., and likely such payments are made routinely to "grease the wheels."Â They may even be expected by local officials, and considered a cost of doing business.
Â Is this morally right?Â Â Certainly not, Â if we look at it abstractly.Â But how many people find themselves having to follow conventions in countries where they work ("When in Rome...") Â just to get work done?
In the U.S., although this happens all the time, nobody would go on record that they'd sent expensive gifts to politicians or state bureaucrats.Â Aren't companies moving down this same path when they send expensive Â "Christmas gifts" to key clients or key prospects---sometimes they even try to send them to journalists---in "appreciation" or "appreciation in advance." It's always wrong to accept them if they are at all valuable, and most people follow explicit guidelines...(for journalists, the Â American Business Media and Society for Professional Journalists spell it out clearly.)
So are U.S. companies, then, to portray themselves, in their business dealings abroad, as Â morally superior,Â Â and dictate thatÂ the U.S.Â ways should prevail?Â Compromising to some degree and "playing along," but setting very strictÂ limits, seems a wiser approach.Â Gradually, experts believe, these old and established practices will disappear.Â Until they do, there seems to be fine line between engaging in bribery and illegality and behaving insensitively/hypocritically.
This brief reading examines some of the issues (it accompanies a University of Michigan course on doing business in China.