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Foreign Corrupt Practices Act - Impact

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1. Why might bribery become a problem for U.S. managers working in foreign countries?
2. What are the major features of the Foreign Corrupt Practices Act (FCPA)?
3. Why might the Foreign Corrupt Practices Act create a competitive disadvantage for U.S. firms?
4. Describe the three non-Western traditions that can lead to confusion regarding "gifts" vs. "bribes."
5. What are some suggestions for managers who want to give bribes without violating the FCPA?

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Solution Summary

The answer to this problem explains the impact of FCPA on US companies. The references related to the answer are also included.

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In compliance with BrainMass rules, this is not a hand in ready assignment but only guidance.

1. Bribery becomes a problem for US managers working in foreign countries because these managers are asked for bribes and if the US managers do not pay bribes, they cannot get their work done. In several developing countries, bribes are demanded for giving orders, for registration of business, for getting finance, and getting construction permits. Bribes are demanded for getting electricity, getting water connections, and registering of property. In developing countries, bribes are demanded and received for paying taxes, trading across borders, and enforcing contracts (1). When the US managers fail to pay bribes, their work gets delayed for a very long time. The US managers find no way of completing projects on time and the cost escalates.
The US managers working in foreign countries who refuse to pay bribes often find that they cannot compete with other firms in the same industry. The reputation of their companies and their personal performance is criticized. Working in countries where bribing is rampant leads can lead to a situation where the US Company that refuses to pay bribes may have to leave that country.
2. The main features of the Foreign Corrupt Practices Act are that it ...

Solution provided by:
Hatim Baxamusa, MBA
Education
  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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