Ethics and the Global Economy

“Ethics and the Global Economy”  Please respond to the following:

From the case study, examine HR’s role in ensuring that organizations comply with the United States Foreign Corrupt Practices Act (FCPA) and the United Kingdom Bribery Act. Determine what you believe to be HR’s biggest challenge in ensuring compliance with FCPA and U.K. Bribery Act, and suggest one (1) action that HR departments can take in order to address this challenge.

The Bribery Act has a significantly wider scope than the FCPA (and carries higher maximum penalties) and so FCPA-compliance programs are unlikely to be sufficient to ensure compliance with the Bribery Act. While the FCPA applies only to the bribery of foreign public officials, the Bribery Act covers bribery in both the public and private sectors. In addition, the Bribery Act, unlike the FCPA, does not have an exclusion for facilitation payments and so such payments will constitute bribery offences if they fulfill the other criteria. The Bribery Act also creates a new strict liability offence of failure by a commercial organization to prevent bribery. As the only defense available to such an offence is that adequate procedures to prevent bribery were in place, commercial organizations will need to ensure that their anti-bribery policies are adequate in light of the extensive scope of the Bribery Act. The biggest challenge in ensuring compliance with FCPA and the U.K. Bribery Act is determined when a minor gift, entertainment or incentive constitutes as a bribe. Gifts and entertainment are familiar in business practices and customer relations worldwide. But they can raise conflict-of-interest problems and can border on bribery. Knowing where to draw the line is not easy. One method is to know what the organization’s policy and procedures are related to receiving a minor gift, entertainment or incentive and then making a moral and ethical choice.

Examine two (2) of the major HR ethical issues multinational corporations face when operating globally. Recommend two (2) preventative actions that HR departments can take in order to lessen the occurrence of these ethical issues. Provide a rationale for your response.

Lack of Cultural Awareness – Multinational managers inevitably deal with miscommunication and lack of cultural awareness. They must prepare their employees for appropriate conduct before sending them to their overseas destination. Training and cultural classes help to enlighten employees about different customs and practices overseas. A lack of cultural awareness could be shown by a lack of respect for the conservative or liberal nature of other cultures. HR managers should assume responsibility for providing employees the right knowledge to successfully navigate cultural issues in foreign countries.

Compensation – Another important issue to consider is the relative compensation levels for each country. Multinationals often have offices in both developed and developing countries where the salaries are quite different. For example, an American transferred to China might make 2 to 3 times their Chinese counterpart doing the same job. It is a bit unseemly to have people working side by side earning so differently for jobs requiring the exact same skill set. In this case, human resources management may face the ethical issue of whether to narrow the gap in compensation.

Reference

ACC. (n.d.). The UK Bribery Act and the US FCPA: the Key Differences. Retrieved May 23, 2017, from http://www.acc.com/legalresources/quickcounsel/UKBAFCPA.cfm

Zheng, K. (2016, October 26). What Are the Ethical Issues in Human Resource Management in Multinational Corporations? Retrieved May 23, 2017, from http://smallbusiness.chron.com/ethical-issues-human-resource-management-multinational-corporations-55821.html