How
to Handle
Corruption
With
respect to corruption, there are 2 basic rules that today's generation of successful
managers follow to protect their business and their careers.
Rule 1:
Don’t Pay
There has been a monumental transformation in the manner in which
international companies deal with corruption. A short decade ago, most
companies believed that graft and other forms of sleaze were an
unavoidable component of doing business in emerging countries. Managers
would simply make allowances for payments and employ “under-the-counter
salesmen” who specialized in facilitating the complexities of such
arrangements.
Over the years, it has become clear that accommodating corruption is
not good for business and the practice is dying out among the current
generation of managers. One big reason is that most countries in North
America and Europe have passed laws making such payments illegal. They
have also followed through by making public displays of companies
caught in the act with large fines and even jail terms for some
executives.
The second reason corruption has become unfashionable is that people
have figured out that it is not good for business in the first place.
Many companies and executives have seriously disrupted their businesses and
careers by
starting down a road that seems quick and easy in the beginning but
slowly becomes a death march of steadily higher costs and business
interference. Most failed projects involving international companies
include allegations of fraud, embezzlement and wide-spread graft.
Corruption is a dance between 2 people and both sides face the music in
the end.
Nowadays, it has become understood that paying under-the-counter money
to win contracts is the road to ruin -- as is partnering with local
partners who facilitate corruption on their behalf. Such
arrangements only guarantee that companies becomes “marked” as payers
and managers discover that recipients come back again and again for
more payoffs to cover increasingly arcane expenses. When word gets
around to others of the free money to be had, companies increasingly
find themselves inundated with requests that are more and more forceful
and expensive.
The only course of action is to not pay from the very beginning. Once you start down
the slippery slope of corruption it is virtually impossible to climb back up to rectitude.
Rule 2:
Don’t Offend
When first confronted with solicitations for illicit payments, a common
response by inexperienced managers is to become angry and disgusted at
the soliciting person. Voices can be raised and insults or threats
delivered. Such behaviour is always a mistake.
In virtually all such cases, the recipient of the affront has suffered
“loss-of-face” and will respond by making the “arrogant foreigner”
suffer dearly. If the person is a junior government official, then the
expatriate might find that his permit or work visa has been delayed for
months or denied completely. An offended policeman may impose a trip to
the local police station for a few hours of threats and
interrogation. If the insulted person is a senior member of society,
then retribution may be much more serious indeed.
It is important to understand that people asking for a
“share-of-the-blessings” do not believe themselves to be bad people.
They are simply following customs in place for decades or even
generations and feel such forced donations to be a legitimate component
of their total income.
It seems difficult to understand but human beings have a tremendous
capability for rationalization. Psychologists would agree that
virtually all of the world’s greatest gangsters, thieves and thugs
thought of themselves as basically good people and any of their actions
that may have hurt others were reasonable under the circumstances.
What to do when solicited
for bribes?
Step 1:
Be Friendly
Smile a lot and avoid showing any sign of anger or intimidation.
Step 2:
Ignore the Question
Disregard the bribery request and change the subject to other matters.
Pretending you didn’t understand or hear what was said is a
particularly good practice.
Step 3:
Ask Questions
Try to get the person to talk about his family, friends, business,
social activities, etc. It is important to get to know as much about
the person as possible and be seen to take a sincere interest.
Step 4:
Provide Alternatives
In
many situations, it is possible to find legitimate means to provide
what the person wants that does not involve bribery. For example, if he
is a policeman, ask whether you could call him in case you need
assistance in the future. If the person is a senior official or client,
then work to build a relationship with the individual (most are
remarkably pleasant people) through entertaining and credible business
advantages so there is no loss-of-face and benefits to both.
In countries where most people do not speak English, get the telephone
numbers of local people who are used to working through such problems
so they can negotiate solutions on your behalf.
Note:
In
Asia, entertainment budgets will be much higher than in other regions.
Dinners, golf games and weekends trips are considered an important part
of business and are not considered corruption.
Are There
Exceptions?
There
are some situations where corrupt practices are so deeply entrenched
that there can be no alternative. If it is petty corruption such as a
small payment to an immigration clerk for a work visa or license to
operate the business, then there is sometimes no other option. In these
situations, get counsel from experienced people and do what is
necessary.
However, if the payment
is large and involves a core part of the business, then current
managers will walk away and do their business elsewhere. The risks to
the overall enterprise, and especially to the executive’s career, are
too great to justify.
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[PDF
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The
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State of BPO in Philippines: Dan Reyes Speaks
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Dan Reyes is easily one of most experienced Business Process
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founder and former president of the Business Processing Association of
the Philippines. more
