If Murder, Fraud, and Bribery are Acceptable in a Host Country, is it OK for a Company to Participate in those Activities in Order to Remain Competitive?
When a company’s management decides to open an office overseas, it may face new challenges. It often happens that the host state may offer worse economic, social and political conditions for company operations as compared to the country where the company is originally headquartered. For example, the company based in a developed state (such as Singapore) may take the challenge to expand its clientele through a presence in a developing state (such as Zimbabwe). Obviously, the standards of business activities in Singapore and any African country such as Zimbabwe are different: these states have always occupied opposite places in the World Bank Doing Business ratings.
Nevertheless, the companies’ priorities in a host state remain the same. Its goals are: winning new markets, expanding its business into new territories and ultimately – increasing profits. The profit is earned by way of satisfying clients’ needs. Since the client is the core among the interested parties, his or her expectations and interests dictate to businesses what they should and should not do. Thus, the company should not only think of being competitive in the new market, but it should also consider how to preserve and integrate its corporate values in a new environment.
It is worth noting that a decision to buy certain products or services is based not only on economic considerations such as “the product is cheaper”, “more modern”, or “better advertised” but also due to their functional characteristics. They also are often expected to satisfy social needs of people as well which is sometimes a sort of peer pressure. For example if all your friends have iPhones, you may feel compelled to buy one to “fit in”.
If a company or its officials were reportedly involved in inappropriate activities (bribery, corruption, not to mention any criminal offences), even if such bad practices have been traced in another country, it’s good and services could lose value in both their home and foreign country. The company brand might be considerably depreciated. It would take considerable time and efforts to restore their reputation. Furthermore, customers have become more and more informed nowadays due to advances in technology such as the Internet. Often it is a matter of hours (not even days) when they become aware of what happened on the other side of the planet. Information on methods of conducting businesses by the companies, their ethical standards, social responsibility and corporate behavior influence the decision of consumers to buy or not to buy even if any transgressions don’t occur in their home country.
This is one of the reasons why various brand ratings (such as “the most popular brand” or “the most expensive brand”) are gaining popularity: the company brand represents, among other things, reputation of the company, the degree of trust which the population generally, and consumers in particular, put into it, rather than the pure “net value” of its shares.
Interestingly, the reputation of the company may be at risk and the company revenues may drop regardless of whether it is in fact guilty of any fraud or crime: an article in the newspaper or internet may be sufficient to damage the general image. Similar to a reputation of a human being, the company’s “good name” is hard to gain and easy to lose. A good example is a history of a former “Big Five” accounting firm Arthur Andersen which was reportedly found guilty of criminal charges, and had to surrender its accounting license. It is worth noting that a company’s brand or reputation may be one of the most valuable things they possess.
So in closing, it is important for a company that does business in a host state be aware of any particular challenges when operating via “normal” business procedures there which may negatively reflect on its brand in a global market. Sometimes business normal practices may include things such as bribery or corruption. While bribery and corruption may be commonplace in the host country, it may not be treated well by the global marketplace where this company operates. In addition many countries have specific legal prohibitions for engaging in any of these practices even in a foreign country. The USA for example has the FCPA – Foreign Corrupt Practices Act which specifically forbids any US corporation from engaging in these sorts of activities.
Good Example Of If Murder, Fraud, And Bribery Is Acceptable In A Host Country, Is It OK For A Company Essay
Type of paper: Essay
Topic: Corruption, Reputation, Shopping, Business, White Collar Crime, Company, Crime, Brand
Pages: 3
Words: 750
Published: 02/20/2020
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