Essay on Foreign Corrupt Practices Act and Business Ethics

International Business Ethics
George Herrera, Director, International Sales, MASCO Corp.

Conference, University of Detroit Mercy
BUSINESS ETHICS, INTEGRITY & VALUES: A GLOBAL PERSPECTIVE
July 24, 2010

Thanks giving me an opportunity to talk about a subject that is very close to my heart. Having spent 30 years in the front lines of international business successfully exporting American-made goods to all parts of the world, I can very well recall times when my products were copied by the Taiwanese, rejected by the Japanese, nationalized by the Iranians and more than a few times displaced by more expensive, less quality goods made in European countries where foreign bribes, if not morally acceptable, were at least tax deductible.

With this background in international trade plus several years of living abroad, I very much welcome this opportunity to discuss global ethics and the possible development of global standards of business conduct. Which, obviously, is the one sure way of allowing those of us who choose to follow the rules to compete fairly against those who have no rules.

Anyone who has lived or traveled abroad is well aware that different cultures look at the world not only from different points of view but thru different color glasses. Every day behavior may be interpreted differently by other folks. What may be acceptable to us may constitute a breach of manners in other cultures and vice-versa. Even our simple nodding of the head which signifies "yes" to us, means "no" in other cultures.

In the Arab countries, it is perfectly acceptable for two male friends to walk down the street holding hands. In our macho society this is absolutely taboo. I know American executives who practically broke into hives when forced into this behavior by a friendly Arab customer. At the same time, we like to find reassurance in the belief that all human beings are ruled by natural law, that unwritten set of rules that tell us that it is wrong to kill or to steal. This natural law may not necessarily exist; however, most of us do have a moral sense which, hopefully, we acquire from parents, schools and churches. Without this moral sense, mankind would not have reached the degree of civilization we have attained. Unfortunately, the problem is that different cultures have somewhat different understanding of the meaning of stealing or even killing. In some cultures stealing is not considered too bad as long as you don't steal from a member of your family.

It is also easy to understand why stealing from a remote and unresponsive government by accepting bribes is not considered a capital offense by the minor official demanding a kick-back, particularly when higher ups in this same government are known to engage in more grandiose forms of larceny. It is because of these gray areas that we must be charitable when judging others while firm in our conviction of what is right and what is wrong.

As far as killing is concerned, I recall an instance 20 plus years ago when taking executives hostage was common in Argentina. During one of my visits to that country, our local partner insisted on providing me with two bodyguards to stay with me for the three days I was to spend there. On the very first day, our car came across an unruly mob protesting against something or someone. One of the guards, noticing that I was a bit apprehensive, tried to make me feel better by saying, "Don't worry Mr. Herrera, those Communists will never take us alive." I still wonder what he meant by "us".

As we become more and more involved in international trade, it is necessary for us to learn how to handle the proverbial corrupt Indonesian government official that can give or withhold a large contract, the more sophisticated European buyer demanding a cut, the small Arab importer trying to get around the Israel boycott or the "honest" Latin American merchant that wants us to under invoice, and justifies it by saying "100% duty is ridiculous, my

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