Business Ethics: Pay the Bribe?

Last Updated Feb 15, 2008 9:53 AM EST

Pay the Bribe?Ethical behavior is not a global standard.

In some geographies, paying a bribe is not considered an ethical or moral issue -- it's just the cost of doing business. So should you pay the bribe, too?

Harvard Business School professor Bill George makes the case against so-called situational ethics in his column for BusinessWeek Online, Ethics Must be Global, Not Local.

Aside from the rightness or wrongness of Germany's Siemens paying some $2 billion in bribes, as was revealed recently, such actions do great harm to the institution when uncovered, George points out.

If you were leading such an organization, would you risk permanently damaging your company in order to win a few overseas contracts? Regrettably, for some executives the answer is yes.
George argues companies must establish a consistent code of ethics no matter if they are selling shirts in Singapore or grain in Guyana. And it's up to the CEO and top management to drive the message home, sponsor employee debates on real-world issues, and publicly hold violators accountable and responsible for unethical behavior.

"The bottom line," George says, "is that good ethics is good business. There is a direct correlation between behaving ethically and creating long-term shareholder value."

So I ask you: Have you ever paid a bribe to grease the workings of commerce? Do you regret it? Would you pay if your chief competitor was receiving an advantage by doing so?

(Funny money image by material boy, CC 2.0)

  • Sean Silverthorne

    Sean Silverthorne is the editor of HBS Working Knowledge, which provides a first look at the research and ideas of Harvard Business School faculty. Working Knowledge, which won a Webby award in 2007, currently records 4 million unique visitors a year. He has been with HBS since 2001.

    Silverthorne has 28 years experience in print and online journalism. Before arriving at HBS, he was a senior editor at CNET and executive editor of ZDNET News. While at At Ziff-Davis, Silverthorne also worked on the daily technology TV show The Site, and was a senior editor at PC Week Inside, which chronicled the business of the technology industry. He has held several reporting and editing roles on a variety of newspapers, and was Investor Business Daily's first journalist based in Silicon Valley.