Robert W. McGee, in Handbook of Asian Finance: Financial Markets and Sovereign Wealth Funds, 2014 Bribery may be viewed from several ethical perspectives, which makes life more interesting. One strain of utilitarian ethics asserts that what is efficient is ethical (Posner, 1983, 1998). This approach may be criticized if one takes it as an absolute statement. For example, if one finds a more efficient way to kill people, the act does not become ethical just because someone has found a way to increase efficiency. However,
one may argue that, if conserving resources is an ethical act, then dissipating resources is unethical. If one does not choose the most efficient way to do something, one is dissipating resources. Therefore, one must choose the most efficient way of doing something, provided the benefit exceeds the cost. Dissipating resources when one has a choice not to do so constitutes an unethical act. Let us apply this view to bribery. If one applies economic efficiency
to bribery, it is possible to conclude that a bribe may not be unethical if the result is increased economic efficiency. For example, where bribery reduces transaction costs, Johnsen (2009) has suggested that consumers may benefit. He even suggests a change in terminology to describe certain situations. Rather than label something as a bribe in cases where consumers benefit, one may call such transactions third-party payments, at least in cases where it is uncertain whether any harm
has been done. It is not always clear that grease payments increase efficiency. Kaufmann and Wei (2000) did a study that found that firms paying more in bribes also spent more time negotiating with bureaucrats, and that the cost of capital increased. A problem inherent in any ethical analysis is that one may apply several different principles to ethical issues, sometimes with differing results. Utilitarian
ethics is perhaps the most widely used ethical system, especially for economists and for many policy analysts (Goodin, 1995). But utilitarian ethics is only one of several accepted ethical systems. One may also apply rights theory, the theory of duty (Kant, 1952, 1983) or virtue ethics (Aristotle, 2002), to mention a few (Baron et al., 1997; Graham, 2004). Sometimes, results differ depending on which ethical principles one applies. According to utilitarian ethics, an act or policy is good if the result is the greatest good for the greatest number, or at least that is the conclusion reached by the classical thinkers on the subject (Bentham, 1843; Mill, 1979). The problem with this approach is that it is impossible to maximize more than one variable at a time. Doing so violates basic mathematical principles (McGee, 2012).
One may, perhaps, maximize the greatest good, or one may attempt to benefit the greatest number, but one may not do both at the same time. Another problem with utilitarian ethical theory has to do with measurement. It is not possible to precisely measure gains and losses. One may rank preferences, but one may not say that one preference is 14.7% better than another preference. A corollary of this approach is that some individuals may gain or lose much from a
certain policy, whereas others would stand to gain or lose little. For example, a protectionist trade policy that protects the domestic textile industry from foreign competition greatly benefits a few domestic textile producers and their employees, but it does so at the expense of every domestic consumer of clothes, not to mention all the foreign producers of textile products, who are not able to sell their goods in the domestic market at what would otherwise be the market price (McGee,
1994a). A few people benefit greatly by the protectionist measure, while the vast majority must pay a slightly higher price for textile products, and since they have to pay more for clothing, they have less money to spend on the products of every other industry, which means that the producers of all other industries suffer, as do their employees (Bastiat, 1968). Another weakness with utilitarian ethics is that it is not always possible to
identify all the winners and losers. Frederic Bastiat pointed out this inherent weakness in the 1840s (Bastiat, 1968). There may be obvious winners and obvious losers, but some winners and losers are more difficult, or even impossible to determine, as is illustrated in the textile example above. Another inherent deficiency of utilitarian ethics is its total disregard of rights (Bentham, 1843; Brandt, 1992; Frey, 1984; Rothbard,
1970). According to utilitarian ethics, it is perfectly acceptable to violate someone’s rights if the result is more winners than losers, or, as economists would say, if the result is a positive-sum game. A rights theorist to quickly assert that an act or policy is automatically unethical if anyone’s rights are violated, regardless of whether the result is a positive-sum game (McGee, 1994b). (It might also be pointed out that, because of measurement problems, it is often not
possible to determine with any degree of confidence whether the result is a positive-sum game). In spite of all these inherent flaws in utilitarian ethics, it continues to be a dominant ethical view. A study by Premeaux and Mondy (1993) found that managers tended to be utilitarians. A follow-up study by Premeaux (2004) found that there had been somewhat of a shift in managers’ viewpoint. Although the continued to apply utilitarian
ethical principles, there was somewhat more emphasis on duty, or doing the right thing than there had been a decade earlier. The two Premeaux studies also found that demographics did not make a difference. Views did not differ by gender, marital status, race, income, region, religion, education, political affiliation or size or type of firm. Some scholars have taken the
position that whatever is corrupt is unethical (Wong and Beckman, 1992), which requires one to first determine whether a particular practice is corrupt. If one applies the principles of virtue ethics, one may ask the question, “Does the practice result in human flourishing?” If the answer is yes, then the policy or practice is ethical. If one applies this approach to the Korean fruit and vegetable case mentioned above, the conclusion is
that bribing a Korean health inspector to accelerate the inspection process is an ethical act because thousands of Korean consumers benefit, as does the California producer. Other studies of bribery in addition to those of Premeaux have looked at various demographic variables. Swamy et al. (2001) found that women were less involved in bribery and were less likely to approve of the practice. They also found that there was less corruption in
countries where women held a larger share of seats in Parliament or held more senior government positions, or where women comprised a larger portion of the labor force. Roy and Singer (2006) suggested some ways to reduce bribery and other forms of corruption in India. The Organization for Economic Cooperation and Development has addressed the topic of bribery (OECD, 2011), but the effectiveness of their main document on this issue
has been subject to dispute (Bonucci and Moulette, 2007; Darrough, 2010). A study of bribery in Latin America (Sanchez et al., 2008) found that regionally dominant cultural values helped determine the view of managers’ tolerance for the practice. Their attitudes toward power distance and collectivism also played a part in determining their attitudes. A study of attitudes in South Africa, the United States, Colombia, and Ecuador
(Bernardi et al., 2009) found that the individuals in the US study generally had views that were more ethical than those of the other groups included in the study. Read full chapter URL: https://www.sciencedirect.com/science/article/pii/B9780128009826000160 Is it as simple as ABC? a practitioner’s perspective on anti-bribery compliance*Neville Tiffen, in The Changing Face of Corruption in the Asia Pacific, 2017 21.1 IntroductionIn concept, anti-bribery compliance (ABC) is simple. In practice, it does not turn out that way. An ABC program should be part of the company’s overall integrity and compliance program. That overall program should cover leadership, roles and responsibilities, planning—both design and implementation—monitoring, improvement, detecting (e.g., whistle-blowing programs) and responding (e.g., investigations), and human resource systems that encourage integrity and compliance—recruitment, promotion, reward. Then, more specifically for ABC, the program should include •leadership and commitment specifically on anticorruption—this is the “tone at top” and it starts with zero tolerance; •corruption risk assessment; •enhancing the Code of Conduct with specific policy(s) on anticorruption supported by further internal controls and registers as necessary •financial and nonfinancial controls •gifts, travel, and entertainment •donations and sponsorships •conflicts of interest •political support •facilitation payments authority/approval levels •a specific requirement for accurate books and records above that required to meet accounting principles; •third-party due diligence and monitoring, including anti-bribery contractual provisions; •employee vetting; and •training and communication, specifically addressing anticorruption. Every multinational company is aware that, under the laws of the country where the official is based, it is illegal to bribe government officials. Most companies based in the Organization for Economic Co-operation and Development (OECD)1 are aware that OECD countries have laws making it illegal for companies and citizens to bribe foreign government officials. There have been screaming headlines about the penalties the US authorities have imposed on US-connected companies for bribing foreign government officials, for example, Siemens, Alstom, and Alcoa (Chon et al., 2008). There was also a great deal of publicity surrounding the introduction of the Bribery Act in the United Kingdom in 2011. None of the foregoing has resulted in all companies trying to stop corruption. Why? In many OECD countries, there is a very low chance of being prosecuted, let alone convicted. The “playing field” facing companies has in fact become more uneven over the years. Authorities in the United States, the United Kingdom, Canada, Australia, and some western European countries have increased their enforcement of the foreign bribery laws. However, there are many companies from low enforcement or low governance jurisdictions that face a very small chance of being prosecuted (Carnegy et al., 2011). This has been highlighted in a recent chapter published by the OECD: “Is foreign bribery an attractive investment in some countries?” (OECD, 2016). Read full chapter URL: https://www.sciencedirect.com/science/article/pii/B9780081011096000216 Improper Payments and GiftsR.A. Larmer, in Encyclopedia of Applied Ethics (Second Edition), 2012 Definitional IssuesBribery definedInstances of bribery provide paradigm examples of improper gifts and payment. Although in some instances it is an uncomplicated matter to say what constitutes bribery, this is not always the case, and it is far from easy to provide a universal definition of what constitutes a bribe. We have already seen that care must be taken to distinguish bribery from gifts and payments that, although inappropriate, could not properly be termed bribes. In addition, it is important to distinguish bribery from instances of extortion. In order to make clear what constitutes a bribe, let us return to our previous example of the purchasing clerk. Suppose that the supplier offers her a large sum of money if she will order supplies from him rather than a rival supplier, and the clerk willingly agrees. This, we will probably agree, is a clear example of bribery. But what makes it such? Three factors seem relevant. First, it is clearly the intention of the supplier to cause the clerk to violate her duties to act in the best interests of her employer. Second, the clerk is a willing participant; she is in no way forced to violate her duties, yet she agrees to do so in exchange for personal gain. Third, the duties she is being asked to violate are acquired duties – that is, they are duties she has acquired by virtue of a previous agreement to act in the role of faithful agent for her employer. Generally, bribery involves an employee or official, under the influence of a third party offering a reward, illegitimately subverting a prior agreement to act as agent for an employer, thus failing to fulfill the role duties acquired under that agreement. Typically, an instance of bribery involves three parties: the person offering the bribe, the employee or official to whom the bribe is offered, and the employer for whom the employee previously agreed to act as agent. This suggests that bribery essentially involves an intentional and willing alienation of agency by the employee and a third party, without ever informing the original employer that the employee is no longer working as her agent. However, we do well to recognize that not all bribes are successful. They nevertheless remain bribes because a bribe, like a gift, is defined not by whether it is accepted but by the intention of the giver. A bribe remains a bribe whether it is accepted or not, but the act of bribery can only occur when the employee consents to take the bribe. Until then, we would speak not of bribery but, rather, an attempt at bribery. Bribery distinguished from undue influenceThis understanding of bribery provides conceptual clarity in several ways. First, it permits us to explain why not all improper gifts or payments should be thought of as bribes. For bribery to occur, there must be an agreement on the part of both the person offering the reward and the person accepting it to subvert an existing contract. An employee may accept a gift without any explicit intention of violating her duties, even if the gift is one that might unduly influence her judgment. Bribery distinguished from extortionThis understanding of bribery allows us to distinguish instances of bribery from instances of extortion. Several key differences are clear. One is that whereas bribery involves the willing participation of the person bribed, extortion involves unwilling participation under duress. We do not speak of the person receiving a bribe as a victim, but we would describe someone as a victim of extortion. Adopting a metaphor, we can say that bribery resembles adultery, whereas extortion resembles rape. Another difference is that bribery essentially involves the alienation of agency, but extortion does not. One cannot accept a bribe and remain a loyal employee, but it is possible to suffer extortion yet remain a loyal employee. For example, an employee told by a corrupt inspector that a shipment of goods will not be passed unless the inspector receives an expensive ‘gift’ might justifiably regard himself as a loyal agent of his employer in acceding to the inspector’s demands, even though he, in his role as agent of his employer, is a victim of extortion. On the other hand, extortion may involve failing to fulfill one’s duties to one’s employer, as in the case of an employee such as a night watchman who under threat does not perform his duties to his employer by allowing the building he is guarding to be burgled. Yet another difference is that whereas bribery always involves the subversion of role duties, extortion does not. One can only be bribed if one is acting as an agent for another, but this is not a necessary condition for being a victim of extortion. One may be a victim of extortion both in instances in which one is free to act on one’s own behalf and in instances in which one has acquired duties to act on the behalf of one’s employer. Bribery and culturally relative practicesThis understanding of bribery provides guidance in assessing behaviors, such as the Chinese practice of guanxi, that might be thought of involving bribery in one culture but are accepted and expected in other cultures. It avoids the conclusion that our definition of bribery must be culturally relative, but it recognizes that what properly counts as bribery may vary from culture to culture. As previously mentioned, bribery essentially involves an intentional and willing alienation of agency by the employee and a third party, such that the employee illegitimately subverts a prior agreement to act as agent for an employer, thus failing to fulfill the positional duties acquired under that prior agreement. This understanding of bribery, although not culturally relative, is capable of recognizing that the official duties of employees may vary from culture to culture so that behavior that in one society would constitute taking a bribe should not be so regarded in another. The key question is not the variability of employee behavior but whether the employee acts as a loyal agent for his or her employer. This is not to claim that if a practice is culturally accepted then it does not constitute bribery but, rather, that what counts as the official duties of an employee may be culturally relative. Read full chapter URL: https://www.sciencedirect.com/science/article/pii/B9780123739322000788 Cryptocurrency and Virtual CurrencyKim-Kwang Raymond Choo, in Handbook of Digital Currency, 2015 AbstractIndividuals involved in bribery and corruption will constantly seek to exploit new areas and opportunities to offend and launder their corruption proceeds and evade the scrutiny of law enforcement and other government agencies. The broad objective of this chapter is to examine whether cryptocurrencies and other virtual methods are potential instruments for laundering corruption proceeds. First, we review 75 FATF and FATF-style regional bodies’ mutual evaluation reports and identify compliance issues in areas that might afford exploitative opportunities for bribery and corruption. We then discuss the characteristics of crypto and virtual currencies that may be exploited to launder corruption proceeds. We propose a conceptual intelligence-led AML/CTF strategy, and identify three potential research questions to provide evidence and address specific gaps in knowledge concerning corruption, and money laundering/terrorism financing risks. Read full chapter URL: https://www.sciencedirect.com/science/article/pii/B9780128021170000151 Transnational Corporations in Developing CountriesEvaristus Oshionebo, in International Encyclopedia of Human Geography (Second Edition), 2020 Bribery and CorruptionTNCs are sometimes complicit in bribery and other forms of corruption in developing countries. Subsidiaries of TNCs in developing countries sometimes pay bribes to government officials in order to secure favors. The problem of corruption is being addressed by developed countries through the enactment of anticorruption statutes that not only prohibit the bribing of foreign public officials but also impose significant financial penalties on TNCs. Prominent among these statutes are the United States' Foreign Corrupt Practices Act; Canada's Corruption of Foreign Public Officials Act; and the United Kingdom's Bribery Act 2010. These statutes impose liability on parent companies for the bribery of government officials by subsidiary companies in developing countries. In the recent past some developed countries have successfully charged and prosecuted TNCs for bribing government officials in developing countries. In 2017, for example, Halliburton paid US$29.2 million to settle criminal charges arising from the illegal payments it made to government officials in Angola. Earlier in 2014, Alcoa agreed to pay US$384 million fine in relation to criminal charges stemming from bribes paid by its subsidiaries to government officials in Bahrain. In Canada, Griffiths Energy International Inc. was fined $10.35 million for bribing government officials in Chad, while Niko Resources was fined $9.5 million for bribing the Energy Minister of Bangladesh. The fight against corruption is aided by legislation requiring TNCs to disclose payments made to foreign governments. In Canada, for example, the Extractive Sector Transparency Measures Act 2014 requires TNCs and other entities in the natural resource sector to make annual disclosures of payments to designated “payees” including “(a) any government in Canada or in a foreign state; (b) a body that is established by two or more governments; [and] (c) any trust, board, commission, corporation or body or authority that is established to exercise or perform, or that exercises or performs, a power, duty or function of government.”A few years ago, the United States' Securities and Exchange Commission (SEC) imposed similar disclosure requirements on “resource extraction issuers” through Rule 13q-1 but a United States District Court has vacated Rule 13q-1 as ultra-vires the powers of the SEC. Read full chapter URL: https://www.sciencedirect.com/science/article/pii/B9780081022955101453 The role of multinationals in corruption in the Asia-Pacific regionDuane Windsor, in The Changing Face of Corruption in the Asia Pacific, 2017 4.3 Patterns of country corruption in the Asia-Pacific regionThe incidence of corruption varies markedly across countries even for comparable activities such as direct bribery of government officials (Andvig & Moene, 1990). The Asia-Pacific region shows such marked variation (Plipat, 2016; Quah, 2016a, b), as reported in Tables 4.1 and 4.2. Table 4.1. Largest economy entities clustered by region of MNE home country (or other entity) and ranked within region by BPI 2011 for likelihood of MNEs bribing abroad
Notes: + Hong Kong is a special administrative entity of China, a one-party communist regime. Countries shown in bold are developed economies. All other entities, including the BRICS, are emerging economies. The five BRICS (Brazil–Russia–India–China–South Africa) countries are shown in italics. Rank ordered by BPI 2011: 1—Netherlands, Switzerland; 3—Belgium; 4—Germany, Japan; 6—Australia, Canada; 8—Singapore, United Kingdom; 10—USA; 11—France, Spain; 13—South Korea; 14—Brazil; 15—Hong Kong, Italy, Malaysia, South Africa; 19—India, Taiwan, Turkey; 22—Saudi Arabia; 23—Argentina, UAE; 25—Indonesia; 26—Mexico; 27—China; 28—Russia. Sources: http://www.transparency.org/bpi2011, http://www.transparency.org/cpi2015. Table 4.2. Other Asia-Pacific countries as defined by Transparency International not appearing in Table 4.1 for BPI information
Notes: For Brunei Darussalam, on the west coast of Borneo Island, the last reported CPI was in 2013: 60, ranked 38 of 177. In 2013, Malaysia was 56, ranked 53 of 177; Indonesia was 32, ranked 114 of 177 (see Joseph et al., 2016). aAfghanistan is an active conflict zone (Singh, 2016).b New Zealand is a very clean developed country, but is not a large enough economy to appear in Table 4.1.cCambodia was once under communist rule: the Pol Pot Khmer Rouge regime (1975–79) was overthrown by Vietnamese military action. Mongolia is a transition economy (formerly communist).dNorth Korea and Vietnam are communist states. North Korea and Somalia are the two most corrupt countries reported by Transparency International (TI).Source: http://www.transparency.org/bpi2011. Table 4.1 reports 2011 TI’s bribe payers index (BPI) information and 2015 corruption perceptions index (CPI) information for the 28 largest economies with MNEs. 2011 BPI and 2015 CPI information are the most recent available, at time of writing. The table is arranged by region. Within each region, countries are listed by 2011 BPI rank from cleanest to dirtiest. The right side of the table then provides 2015 CPI information for each country. The first region, at the top of the table, comprises countries of the Asia-Pacific region, as defined by TI. (Table 4.2 provides CPI information for all the other Asia-Pacific countries.) The second region, further down the table, comprises other countries bordering the North Pacific: Canada, USA, and Mexico (comprising NAFTA) and Russia (Siberia). The third region comprises countries of Western Europe: all are members of the EU except Switzerland. The fourth region, at the bottom of the table, groups other emerging economies not in the Asia-Pacific region. The five BRICS (Brazil, Russia, India, China, and South Africa) appear in italics, as these countries are scattered across the regions used in the table. Using BPI of 8.1 as a rough cutoff, Japan, Australia, Singapore, and New Zealand (reported in Table 4.2) can be grouped with Canada, the USA, and much of Western Europe as relatively clean. The rough cutoff corresponds with CPI information: there is a major drop in Table 4.1 from Singapore to South Korea. The USA is the 8.1 cutoff. France and Spain have a BPI score of 8; Italy is lower at the 7.6 level. Italy is at approximately the score of the top half of the other emerging economies not in the Asia-Pacific region; and at the level of Hong Kong, Malaysia, Taiwan, and Indonesia. China (BPI 6.5) and Russia (BPI 6.1) have the most corrupt MNEs as reported by TI information; and they appear to be somewhat worse than Indonesia (BPI 7.1) or Mexico (BPI 7.0). Hong Kong, a special administrative region of China, is reported markedly cleaner than China. Within the BRICS category, Brazil, India, and South Africa appear cleaner than China and Russia: the gap in BPI scores appears relatively large. Table 4.2 reports 2015 CPI information for other Asia-Pacific countries not included in Table 4.1. These countries are not large enough economically to report BPI information for any MNEs. The table is arranged in two different ways. The left side of the table reports countries alphabetically. The right side of the table reports countries by CPI rank, from cleanest to dirtiest. Discussion here focuses on the right side, for CPI rank ordering. New Zealand is one of the cleanest countries in the world, and although having MNEs and some important exporters is not economically large enough for BPI information. Bhutan has a relatively clean ranking. Other Asia-Pacific countries listed in Table 4.2 have relatively dirty rankings. Myanmar (Burma), Cambodia, Afghanistan (an active conflict zone), and North Korea are the worst. North Korea, a communist dictatorship, ties with Somalia for dirtiest country reported by TI. Information for Brunei is not available after 2013. At that time, Brunei was cleaner than Malaysia, and certainly much cleaner than Indonesia. (Malaysia and Indonesia appear in Table 4.1.) Read full chapter URL: https://www.sciencedirect.com/science/article/pii/B9780081011096000046 Business Ethics in KoreaB. Dalton, M. dela Rama, in The Political Economy of Business Ethics in East Asia, 2017 5.4 “Our Actions are Normal as They are Part of Korean Culture”Korea’s patriarchal traditions have provided a readily available cultural vocabulary for those in business (and those in the business of dominating others). Political and economic elites have sought to justify their own interpretations of ethics by selectively evoking cultural, in particular Confucian, traditions. This process has been described by Williams (1977) as creating “an intentionally selective version of a shaping past and a preshaped present, which is then powerfully operative in the process of social and cultural definition” (p. 115). Scholars such as Eckert (1993), Janelli and Yim (1993), and Deuchler (1992) suggest that Confucian ideals are often evoked (usually in reconstructed form) and then promoted as authentic in order to serve the purposes of Korean elites, a process described as the “mutual constitution of Confucianism and capitalism in South Korea” (Janelli & Janelli, 1997). For example, owners of Korea’s chaebol have attempted to use the “company is a family” metaphor as a way of promoting productivity and maintaining labor peace (Choi, 1993; Janelli & Yim, 1993). Traditional norms and relationships were useful in obfuscating the line between customs such as gift-giving and bribery, as well as group loyalty and nepotism. Traditional concepts of power and Confucianism’s humanistic tradition could also be linked to a relatively flexible approach to the application of the law to check the behavior of senior businessmen and government officials. For example, economic and political elites might seek to blame the culture of gift-giving for their having to find “discretionary funds.”1 This may be a case of blaming tradition to disguise attempts by politicians to distribute patronage as a way to consolidate power and by business to retain market privileges. However, it is important to note that despite such arguably cynical elite constructions of ethical behavior, Korean cultural tradition was not consistent with such practices. Indeed, Korean cultural tradition was also the source of widespread questioning of the ethical standing of the chaebol. Confucian values of antimaterialism and the ideal that the ruler’s legitimacy rests on his ability to meet exacting moral and ethical standards are central tenets to Confucian thought. For example, followers of Confucianism may consider it moral and virtuous to “know” (graciously accept) one’s place in a rigid hierarchy, but this tradition also stressed self-cultivation, principally through classical education practices which encourage social mobility. It is also important to acknowledge the complexity and internal inconsistencies within certain Korean traditions. Robinson (1991) noted that “[Korean] Confucianism contains within its canon contradictory impulses that support centralization of political power around a merit-based bureaucracy while also affirming ascriptive class distinctions in society” (p. 206). Also, Confucian norms have recognized that if the ruler has behaved wrongly, he loses his heavenly mandate to rule and his subjects have the right to overthrow him. At the same time, Confucianism has also stressed that the most important virtue of a subject is loyalty to the king and that a king’s immorality should be corrected with moral persuasion and education, not through punishment. In line with this, Palais (1996) argued that “Confucians might justifiably withdraw their loyalty from such an immoral ruler, but they might also feel that it was their duty to stick with him to lead him from immorality to morality” (p. 1004). There are also conflicts between different traditions that coexist within the one culture. For example, Confucianism and Korean folk traditions, sometimes referred to as the “second tradition” which includes folk traditions (e.g., animistic spirit worship, shamanism, fortune telling, geomancy), are responsible for a certain egalitarian ethic in Korean popular village culture that was in conflict with Confucian values of Joseon elite society (Brandt, 1971). This also assumes that Confucian virtues, such as strong family ties, the greater importance of community over individuals, and social cohesiveness, have remained intact. It is possible that ethical standards in contemporary Korea may also, to some extent, be linked to a cultural decline or dilution. This can be in the form of the weakening or abandonment of some traditional values, or the gradual disappearance of village-based community networks which made these traditional values operable. Furthermore, capitalism itself could have had destructive effects on Confucian virtues. For example, Yun (2010) argued that in contemporary Korea, the demographic imbalance in labor markets (in 2005, approximately 30% of the Korean elderly aged 65 years or older participated in labor markets, while only 70% of Koreans in the 25-to-29-year age range were economically active) departs from the Confucian ideal, where adult children play the bread-winning role and take care of their dependent older family members, and that this is an example of how “crony capitalism and growth absolutism” have eroded Confucian culture (p. 256). It is important to recognize this process of reformulation when analyzing interpretations of business ethics in Korea. With capitalist industrialization and the associated urbanization, mass production, mass education, and mass communication, increasing numbers of the population were directly exposed to elites using cultural justification. But these processes have also led to the growth of greater contestation of these justifications from groups within Korean civil society. This contestation has become more acute as the Korean economy has reeled in the aftermath of the Asian financial crisis and global financial crisis. Numerous corporate collapses and economic recession have highlighted how the Korean economy and its manorial/mercantile foundations were insufficient to withstand exogenous shocks that have come with being more deeply embedded in the global economy. Read full chapter URL: https://www.sciencedirect.com/science/article/pii/B9780081006900000051 Corruption, Transactions Costs, and Network RelationshipsSirilaksana Khoman, in Sustainable Economic Development, 2015 Fighting corruption requires an understanding of the prevailing social, political, and economic realities. Corruption can range from petty bribery to system-wide state capture through networks of interconnected players. It ranges from simple administrative transactions to sophisticated and complex activities often made to appear legal. It can become entrenched when the network of beneficiaries widens and the cost of leaving a network becomes prohibitive. Faced with these governance challenges, limited features of democracy and decentralization can exacerbate the situation. This chapter draws on Thailand’s experiences: it traces the underlying structural shifts as a result of the 1997 economic crisis to the present time, pointing out the irony of the promising governance trends and the unintended effects of the reformist constitution. It focuses on network relationships that underlie governance failures and suggests possible ways to combat the new forms of corruption. Possible lessons for other developing countries may be gleaned. Read full chapter URL: https://www.sciencedirect.com/science/article/pii/B9780128003473000133 Business feeling the strainJane Ellis, in The Changing Face of Corruption in the Asia Pacific, 2017 20.4.2 Due diligence and third partiesA quick review of the settlements reached between the DOJ and various defendants indicates that intermediaries were used in some 70 percent of bribery and corruption investigations and prosecutions.qq That is, third parties have paid bribes or engaged in corrupt conduct when conducting business for other companies. Some companies engaging intermediaries often were completely aware that this conduct was occurring; indeed, they had engaged the intermediaries for that purpose. In other cases, companies deliberately turned a blind eye to the conduct of their intermediaries on the basis that what they didn’t know couldn’t hurt them.rr This never has been, and certainly is not, the case. The scope of various anti-bribery and anticorruption laws, and the expectations of the effectiveness of a company’s anticorruption policy and compliance program by regulators, means a company cannot avoid liability if a third party pays a bribe when doing business for that company. The only way a company can defend itself in these circumstances is if it can establish that (a) it conducted reasonable due diligence on the third party prior to engaging them, and (b) required each third party to conduct themselves in accordance with the company’s requirements and the law. That is, companies have to do some homework before they engage third parties. As a starting point, a company may wish to have a close look—a really close look—at what it does when it engages a third party: •What does the company want the third party to do? •What is the third party going to do that the company cannot do itself? •Why that third party? •How was that third party selected? •How is that third party to be paid and to what bank account? •Where is that third party located and where are they going to undertake the company’s business? •What do you actually know about that third party, for example, is it possible a government official or a relation of one has an interest in it? Similar scrutiny needs to be used for those organizations operating in transitioning countries. For example, if an organization proposes to fund community-based projects, it will need to conduct similar due diligence to ensure the project is sound and is not, say, connected to political interests. This does not mean a company needs to be immobilized by due diligence. But it does mean ensuring a company has in place a basic due diligence framework that employees are obliged to follow before engaging a third party. So, for example, •the level of due diligence required will increase with the level of risk—while it is not necessary to overcook it, the level of due diligence undertaken needs to be reasonable and defensible given the risk. •a company should set out a risk-based due diligence framework that it will follow, depending on whether the risk is low level, medium level, or high level and on the nature of the transaction, etc. So, for example, if a company is proposing to engage a business partner in Mongolia to secure certain government approvals, then the level of due diligence is likely to be considerably greater than engaging a business partner for a similar purpose in Canada. •the agreement between the company and the third party must include anti-bribery/anticorruption provisions and a right for the company to conduct a compliance audit. •there must be evidence that the company had addressed all red flags—the existence of a red flag does not automatically preclude a company from securing the services of the third party, but the company needs to be able to explain why it proceeded with a transaction despite the red flag if the question arises. •due diligence must be ongoing—in many cases the corrupt conduct may arise a few months or a couple of years after the third party is first engaged. Any cost-benefit analysis of due diligence by a company should consider not just the cost of the transaction or the cost of securing the services but the potential cost to the company if the third party engages in corrupt conduct that can be attributed to the company. Finally, companies should undertake due diligence on those third parties with which they have already contracted. In addition to satisfying any anticorruption requirements, it is a useful way of reviewing the agreements a company already has in place, for example, to satisfy itself of the validity of the agreements. Read full chapter URL: https://www.sciencedirect.com/science/article/pii/B9780081011096000204 Arrival and DurationDeborah Gonzalez, in Online Security for the Business Traveler, 2014 Anti-Bribery and Anti-CorruptionOne great resource is Latham & Watkins, LLP’s AB&C Laws™ app—an easily accessible guide to anti-bribery and anti-corruption legislation in 13 major economies in Asia, the Middle East, Europe, and the United States. It covers key topics of offences, territorial application, legislative framework, limitation, penalties, and official guidance.14 You may think 13 is a small number, but it covers the most common destinations. Read full chapter URL: https://www.sciencedirect.com/science/article/pii/B9780128000694000045 What is the main idea of virtue ethics?Virtue ethics suggests treating our character as a lifelong project, one that has the capacity to truly change who we are. The goal is not to form virtues that mean we act ethically without thinking, but to form virtues that help us see the world clearly and make better judgments as a result.
What are the main ethical concerns of virtue ethics?Virtue ethics can address the questions of how one should live, what kind of person one should become, and even what one should do without that committing it to providing an account of 'right action'.
What does Aristotle say about virtue ethics?Most virtue ethics theories take their inspiration from Aristotle who declared that a virtuous person is someone who has ideal character traits. These traits derive from natural internal tendencies, but need to be nurtured; however, once established, they will become stable.
Which of the following is a criticism of virtue ethics quizlet?Which of the following constitutes a common criticism of virtue ethics? Goodness in people is only a function of doing good. it would make our behavior more universally fair, and less likely to involve the use of others for selfish ends.
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