Bribery Works

“Why bother with all the difficult stuff when you can gain competitive advantage by other means?”

I have worked in more than one country where you need a Mr Fixit to get things done. To ease the way for things as seemingly straightforward as getting a phone line installed or paying your tax bill. In one particular country, it was hard to do anything without money changing hands. While I don’t condone this, it is an accepted way of life in some countries and in some business sectors.

When there is big money at stake then there is always the potential for big bribes and few areas of international trade have attracted as much publicity on this subject as defence. It is widely known that defence transactions are not always as straightforward as they might first seem. People do business differently in other places and how do you square that with your own laws back home? Just one of the complexities facing managers in this very profitable and highly politicised business.

Pan-European defence group EADS has now said that it is being pursued for damages following allegations of bribery, leading to termination of subcontracts, on a communications project in Saudi Arabia. The matter is being investigated by the Serious Fraud Office. But, if the probe into corrupt payments by BAE in 2006, also in Saudi Arabia, is anything to go by, there is little hope of any action if the allegations are proved to be true. Famously in BAE’s case, the UK government blocked any investigation on “security grounds” and the company paid $400 million to the US authorities.

Blatant disregard for the UK law is pretty rarely hung out to dry in public like this, but corruption on a smaller scale occurs all the time in business and everyone knows about it. Corporate hospitality and gifts are a form of bribery, as is the reciprocal trading that happens between some individuals, often to win business or, on a personal level, a new job.

Although it isn’t a topic discussed much, bribery, in one form or another, is a very real form of competitive advantage, which you can’t really do much about. Even exposing it is fraught with difficulties if the powers that be want it kept quiet. In a culture that embraces it more readily, or at least more publicly, than we do here, you don’t need superior products or services to get ahead, just deep pockets.

Mark

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