American Corruption Overseas

“A company has the upper hand in saying they will not conduct business in this manner. They have the power and they don’t seem to understand that.”

By Brian Del Rosario, Marketing —

The United States is ranked sixteenth on the Corruption Index, making it one of the least corrupt countries. Although the nation has a high ranking, American companies have more than a few ties to corruption via overseas foreign business investments. These investments include business operations such as setting up a manufacturing plant in a foreign country. While the companies may intend to use appropriate business practices abroad, the location of the foreign operations may have a culture of corruption.

Foreign Companies’ Influence to Rid Corruption

Marie-Therese Claes, a professor at the Louvain School of Management in Belgium, believes that multinational companies have the power and responsibility to fight corruption abroad. Claes explains that the countries receiving these foreign investments might be compelled to participate in corruption, but that multinational corporations “do not have to play that game.” She states that “these countries, which score high on the Corruption Index, are generally poor countries that need the investment. Therefore a company has the upper hand in saying they will not conduct business in this manner. They have the power and they don’t seem to understand that.”

Claes believes that companies should choose to only conduct business with the highest standards of integrity and expect the same from business partners. As companies choose this plan of business conduct, other companies will follow. She explains that each country is in a unique situation and recommends that research be done to implement an appropriate plan to prevent corruption and unethical business practices.

How?

Transparency International has made the “Business Integrity Toolkit” to help aid companies in forming an effective plan of action to ensure integrity in business operations. As part of the 6-step process outlined in the toolkit, step 5—monitor controls and progress—is essential.

Each situation and location can present unique challenges in monitoring business integrity. Ensuring that employees and managers abroad have integrity is a difficult task but can be done with the right tools and compliance.