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MAY 2013




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Definition of bribe in British and World English in Oxford dictionary: i) verb[with object] Dishonestly persuade (someone) to act in ones favour by a gift of money or other inducement: they attempted to bribe opponents into losing [with object and infinitive]: they had bribed an official to sell them a certificate. ii) noun A sum of money or other inducement offered or given to bribe someone: lawmakers were caught accepting bribes to bring in legalized gambling. The offering, giving, receiving, or soliciting of something of value for the purpose of influencing the action of an official in the discharge of his or her public or legal duties. Bribery does not have to involve cash or an actual payment exchanging hands and can take many forms such as a gift, lavish treatment during a business trip or tickets to an event. The types of bribery that take place in the commercial sector are numerous. Some simple examples follow: bribery in order to secure or keep a contract. bribery to secure an order. bribery to gain any advantage over a competitor. bribery of a local, national or foreign official to secure a contract. bribery to turn a blind eye to a health safety issue or poor performance or substitution of materials or false labour charges. bribery to falsify an inspection report or obtain a certificate.



There are a lot of activities that consist bribery among the people throughout the world. There are too many history since from the world war 2 till now. Bribery is still going on and has been practiced by many types of people from the politicians, government servants, firms, sportsman and even the manager of different company and firms. Therefore, examples of practice of bribery are as follow: A bribe can consist of immediate cash or of personal favors, a promise of later payment, or anything else the recipient views as valuable. When the U.S. military threatened to cancel a Texas relocation company's contracts to move families to and from military bases, the company allegedly gave four representatives in Congress an all-expenses-paid weekend in Las Vegas in January 1989, and $2,500 in speaking fees. The former president of the company was indicted by a federal Grand Jury in 1994 on bribery charges for both gifts. In the corporate arena, a company could bribe employees of a rival company for recruitment services or other actions at odds with their employer's interests. Even when public officials are involved, a bribe does not need to be harmful to the public interest in order to be illegal.When a public official accepts a bribe, he or she creates a conflict of interest. That is, the official cannot accommodate the interests of another party without compromising the responsibilities of her or his position. There is not always consensus over what counts as a bribe. For instance, in many states and at the federal level, certain gifts and campaign contributions are not considered bribes and do not draw prosecution unless they can be linked to evidence of undue influence. In this regard, negative public perception of private contributions to elected officials as payola has caused most states to establish legislative ethics committees to review the public-private relationships of house and senate members. Furthermore, both houses of the U.S. Congress passed legislation in 1994 restricting gifts to no more than $20 in value. The Supreme Court further clarified the law by setting standards for federal bribery statutes in United States v. Sun Diamond Growers, 526 U.S. 398, 119 S.Ct. 1402, 143 L.Ed.2d 576 (1999). This case grew out of the prosecution of Mike Espy, secretary of agriculture in the Clinton administration, for allegedly accepting bribes. After Espy was acquitted of all charges, the

Independent Counsel charged Sun Diamond Growers, a trade association for a large agricultural cooperative, with violating a federal gratuities law that prohibits giving gifts to public officials in exchange for favorable government actions. Nevertheless, one important thing: No written agreement is necessary to prove the crime of bribery, usually a prosecutor must show corrupt intent. Bribery charges may involve public officials or private individuals. In the world of professional sports, for example, one boxer might offer another a payoff to "throw" (deliberately lose) an important fight. We take an example, there was also a case of the international sports community, which was rocked by a bribery scandal involving the 2002 Winter Olympic Games in Salt Lake City, Utah. Two officials of the Utah committee that secured the games were indicted in 2000 on charges of wire and Mail Fraud, conspiracy, and interstate travel in aid of Racketeering. They were charged with paying an official of the U.S. Olympic Committee (USOC) to help influence the selection of Salt Lake City by the International Olympic Committee (IOC). The USOC official who received the bribes later pleaded guilty to several criminal charges including the accepting of a bribe. Meanwhile, in Kota Kinabalu, Sabah a bribe also appeared in a case of a court which was published in The Star Newspaper on Tuesday, 04 June 2013 09:02am. The news was about the child bride case: Riduan charged with bribing girls father to withdraw police report . The restaurant manager accused of raping a 13-year-old girl, who later became his second wife, has pleaded not guilty to the charge of bribing her father with RM5,000 to withdraw a police report. Riduan Masmud, 41, was alleged to have offered the bribe to the girls father, a security guard at the same restaurant, on April 18.He was also charged before the Special Court for Corruption Judge Caroline Bee Majanil with two other counts of paying the father RM2,000 and RM3,000 between 9pm and midnight at separate locations in Kota Kinabalu on the same day. Riduan, who was charged on Feb 28 with raping the girl in a parked car in Inanam, appeared calm when he entered the courtroom with his eldest daughter and lawyer. He was allowed a bail of RM2,000 with one local surety. So, bribery usually been used by any people in the world, not only the politicians, government servants but also other people who have the purpose in doing and claiming the bribery.


Countries where bribery and embezzlement among public servants and politicians are effectively contained allocate capital more efficiently, grow faster, preserve the environment, attract investors, avoid inequality in income and wealth, enhance trust in politics and foster happiness among its citizens (Lambsdorff 2007). The empirical evidence is strong and has focused attention on the necessity of good governance. Therefore, accusations of bribery and corruption among politicians by politicians just prior to elections are farcical. The manner in which these charges have been revealed has shown the scant seriousness of the issue among politicians. The opposition had done nothing about it till the elections were called. Further the charges of corruption against the previous government lay dormant. The Bribery Commission had ceased to function for some time owing to the behaviour of the self-same politicians who are making charges before an impotent Commission. Yet this melodrama has exposed the bribe and corrupt nature of our society. Whatever the merits of the specific allegations, they point to widespread bribery and corruption in our body politic. These have serious consequence to the economy. A root cause of bribery among politicians is the vast expenditure they have to incur at elections. The laws that limit election expenditure are only observed in the breech. Politicians, who begin their career as honest, end up as bribe and corrupt, as they have to incur huge expenditures to retain their seats. The public perception is that bribery and corruption have increased in the latter years of the last regime and during the current one. The public is of the view that most politicians and many key officials are bribe and corrupt. This public perception of a high incidence of bribery and corruption has been confirmed by the ranking of India as one of the most corrupt countries in the world. We can see the bribe analytics below in figure 1, where source is from the Transperancy International which tell us the reports of bribe among the people of India.

Figure 1 The economic distortions that such corruption may entail are immeasurable. Ultimately the costs of corruption have to be borne by the people. One of the underlying causes of the Asian Economic Crisis of 1997-98 was corruption in many areas of economic activity, especially in the financial sector and public construction work. The vitiation of the regulatory and prudential regulations was an underlying reason for the financial crisis in Asia in 1998. Bribery and corruption can be particularly disadvantageous to economies like ours that have high dependence on foreign investment and trade. If corruption is in agencies that are directly involved in foreign investment and critical areas of infrastructure development, the drawbacks are even more serious. When corruption is recognized to be pervasive foreign investors are diffident as it is often difficult to cope with the nuances of corruption and their efforts could be costly in terms of effort, time and money. When bribery and corruption is rampant and widespread it can threaten the entire development effort and ruin development prospects. Allegations of bribery and corruption have been leveled at cabinet ministers, high officials and persons who deal with day-to-day affairs in government offices. The transaction costs of many activities are costly to clients. Persons in high positions have been accused of bribery and corruption, charged before the Bribery Commission and little else has happened.

If the levels of bribery and corruption in our society are to be brought down, there must be a far greater sense of urgency and recognition that it affects economic performance. Civil society must recognize the need to eradicate this evil and bring pressure to bear on the government to take effective measures to check corruption, particularly in high places. The tragedy is that civil society has turned cynical about corruption. People have more or less accepted bribery and corruption as a way of life. Figure 2 below mentioned out that in 2008, bribery in business are used frequently by firms where bribery are practiced among the politicians, public officials and public contracts.

Figure 2


With governments all over the world becoming less tolerant to bribery, the global regulations landscape witnesses additions in the form of anti-bribery and anti-corruption acts and legislations such as the UK anti-bribery act and the Foreign Corruption Practices Act (FCPA). These acts comprise of extremely detailed and intricate sections that describe offence types, clauses, applications, penalties, and other related fragments of the act. Penalties resulting from violations of these acts are enormous and stakes involved are extremely high. However, many companies are not aware of the exact scenarios or actions that may cause such serious offences. Their ignorance of the full-fledged implications of the act leaves them unprepared to manage the practical consequences. Often the internal departments are not well-equipped to identify, track and control malpractices effectively and avoid or manage violations of such acts. Therefore, through legal framework made by develop countries, all the acts can be practice and follow as the guidance for example, the UK Anti-bribery Act came into force on 1 July 2011. The act amends and reforms the UK criminal law and provides a modern legal framework to fight bribery in the UK and globally. Described as the toughest anti-corruption legislation in the world, the act replaces and annuls England's laws governing bribery and corruption, es tablishes four offences and creates a modern and more effective anti-bribery framework. The act includes the following four offences: Active bribery - promising or giving a financial or other advantage Passive bribery - agreeing to receive or accepting a financial or other advantage Bribery of foreign public officials Failure of commercial organizations to prevent bribery by an associated person (corporate offence) As a result, the scope of the law is extra-territorial. Under the Anti-bribery Act, a relevant person or company can be prosecuted for the above crimes even if the crimes are committed abroad. The act applies to UK citizens, residents and companies established under UK law.

In addition, non-UK companies can be held liable for a failure to prevent bribery if they conduct business in the UK. Companies can be liable for bribery committed for their benefit by their employees or other associated persons. A company or corporate entity is culpable for board-level complicity in bribery, including bribery through intermediaries. Thus in Malaysia, the legal framework and social forces in bribery are controlled and the acts had been done. The Malaysian Anti-Corruption Act 2009 ("MACCA") received Royal Assent on 6 January 2009 and came into effect on 1 January 2009. The MACCA repeals the previous anticorruption statute, the Anti- Corruption Act 1997 ("ACCA"). The MACCA was part of a suite of new legislation promised by the Malaysian Prime Minister as part of efforts to introduce greater transparency in the country and renew faith in the integrity of Malaysia's public and private sector administration. The other related pieces of legislation include the Judicial Appointments Commission Act 2009 (which was passed at the same time as MACCA) and the Witness Protection Bill 2008 which is still making its way through the legislative process. The MACCA is intended to ensure a more effective and accountable Malaysian Anti-Corruption Commission ("Commission") which is subjected to external monitoring. The Malaysian

Government has promised more resources to the Malaysian Anti-Corruption Commission and it announced that the anti-corruption force would be tripled in number over the next 5 years. By knowing the legal framework of bribery, everyone in this world specially Malaysian itself should practice the rules and regulation of bribery that had been promised by our Prime Minister to be faith in the integrity of Malaysia's public and private sector administration. Therefore we should avoid bribe among ourselves.



The most effective way of preventing bribery is to instill ethical behaviour in the organization and the employees DNA. Support and advice for employees needs to be provided to help avoid them ending up in a situation where they are faced with a request for a bribe. If such a situation does occur, the most important thing is to ensure the employee is equipped to deal with the situation, in accordance with the organizations standards, and in compliance with international and local law. Enabling employees to be able to identify the situation they are in, and then to respond to it effectively, is essential. Then, if people are unsure of the rules, they will intuitively be able to recognize what behaviour is considered right or wrong by their organization. Most people intuitively know that bribery and corruption is wrong. The ideas of four theorists constituted the ethical framework are: Jeremy Bentham

(utilitarianism), Immanuel Kant (universalism) , Robert Nozick (Personal Liberty) and John Rawls (Social Justice). These four were selected because their ideas prevail in our culture today. Jeremy Bentham provides the traditional defense of capitalism based on the "greatest happiness" principle; Kant gives us the foundation of a secularized religious ethics and the basis for much criticism of business activity; Robert Nozick based upon the primacy of a single value rather than a single principle and Rawls provides much criticism of utilitarianism and also provides defenses of egalitarianism and the welfare state. The goal of a valid scientific ethics is to establish objective, non-arbitrary value judgments--that is, normative or evaluative propositions that are true universally. These evaluative statements are validated by reference to a standard that serves as the supreme good or supreme value. All lesser judgments are seen as contributing to or deriving from the supreme good. In briefest essence, the ethical theories of these four philosophers follow: 1. Jeremy Bentham holds that pleasure is the standard of value; everything that leads to pleasure is good and everything that leads to pain is bad. This is the theory of ethical hedonism. Pleasure

is the standard because human nature is such that everyone (by nature) already pursues pleasure and seeks to avoid pain. The justification of ethical hedonism, in other words, rests on a theory of human nature known as psychological hedonism; it does not make sense, Bentham would argue, to expect people to act against pleasure-seeking when in fact their natural inclination is to seek pleasure. Hence, pleasure must be the supreme good. Bentham is most noted for his theory of utilitarianism, the social application of hedonism coupled with an influence from Christian altruism. If it is good to seek one's own pleasure, Bentham would say, it is better to seek the pleasure of others, indeed, the greatest pleasure of the greatest number. Hence, the "greatest happiness" principle of utilitarianism. But how do we know what the greatest happiness of the greatest number is? Bentham offers his "hedonic calculus," which even in his day was considered cumbersome and unrealistic. Today, however, the hedonic calculus lives on in the form of cost/benefit analysis. It probably would not be too much of an exaggeration to say that most economists today (and many marketers) are utilitarian of some kind. 2. Immanuel Kant holds that duty is the standard of morality. Duty means strict adherence to moral law without regard to its consequences in action. If something is right, it is right...period. Kant's ethics is known as a deontological theory (from the Greek "deos," meaning duty) because of its emphasis on duty and the notion that certain actions are right or good in themselves, whereas Bentham's ethics is a teleological theory (from "telos," meaning end or goal) because of its emphasis on the end or goal of actions and the notion that the consequences of action the pleasure/pain consequence ultimately determine the action's rightness or wrongness. In this sense, Kant's theory is the opposite of Bentham's, because for Kant right actions always are taken from duty, never from inclination or pleasure. What, then, according to Kant, is the moral law to which we must be dutiful? It is the "categorical imperative," which Kant expressed in two formulations. His first formulation, paraphrased, states that our duty is to act only in ways that our actions can be based on a universal law; i.e., ethical principles must be "universalizeable," applicable to all people at all times. His second formulation states that our duty is to treat humanity as an end in itself; i.e., we should always treat others as an end in themselves, never as a means to our own ends.


3. Robert Nozick believed that liberty is thought to be the first requirement of society. An institution or law that violates individual liberty has no rejected even if it may result in greater happiness and increased benefits for others. Nozick agrees that society is an association of individuals, and that cooperation between these individuals is necessary for economic gains. The holdings of each individual ( in income, wealth and other bases of self-respect) are derived from other people in exchange for goods or services, or received as gifts. 4. John Rawls holds that social justice is the standard of value--justice as fairness. Fairness is accomplished in society when everyone is treated equally and when a proper distribution of social position and fortune is achieved. Rawls' theory is egalitarian (and therefore altruistic) and has been described as a philosophy for the welfare state--because Rawls repeatedly attacks utilitarianism (and capitalism) for its unfair distribution of social position and fortune. His theory is Kantian (and there- fore deontological) because a right action is a just action, or in other words one's duty is to act justly, regardless of consequences. Rawls validates social justice as the standard of value by using the "state of nature" device of social contract theorists. In this state, he argues, we are all under a "veil of ignorance" concerning our place in society; i.e., no one is favored by birth into a wealthy family, high social class, or with high intelligence. Under this "veil," we can now derive the principles of justice, which are: equal liberties for all (the equal liberties principle) and minimal social and economic inequalities (the difference principle). Rawls is most noted for one form of the latter principle: the

maximum guideline. A just act, according to this formulation, is one that improves the position and conditions of the least advantaged and least equal; the goal, in other words, is to maximize the minimum. Much of this can be achieved by policing business behavior, enacting a negative income tax, providing education to the less intelligent at public expense,


5. CONCLUSION After a thorough discussion of the above theories of microeconomic, legal and ethics, the rest of these focused on application of the theories to specific marketing issues. These issues included: bribery, marketing to morally questionable countries, marketing harmful products, planned obsolescence, deceptive pricing, deceptive advertising, the monopoly power of advertising, price discrimination, and invasion of privacy. Application of the four ethical theories to each issue, illustration of what each philosopher would say about the issues and how they are might disagree with one another--provided the people with a basis for choice. To shed some light on the application process, let me now illustrate the four ethical theories on the issue of bribery. A salesperson, for example, offers a payment to a purchasing agent in exchange for the agent's business. In civil law, if the agent's employer (the owner of the business) is not aware of the payment, or does not approve of it, a bribe has taken place because the salesperson and purchasing agent together are cheating the agent's employer. A breach of trust, in other words, has occurred between agent and employer, and the intent of the payment is to induce the agent to act against his or her normal duties. Bentham, on a personal basis, probably would be opposed to bribery, but the theory of utilitarianism does not offer a clear-cut opposition to it. Indeed, the greatest happiness of the greatest number is to be determined by consulting the hedonic calculus or, today, by conducting a cost/benefit study. It is not obvious from the theory that bribery per se is unethical; if a greater happiness is achieved through an occasional bribe, what is the harm? The net effect, the consequence--is what counts. Indeed, Pastin and Hooker (1988) argue on utilitarian grounds that the Foreign Corrupt Practices Act of 1977 should be repealed. Kant, on the other hand, would declare in no uncertain terms that bribery is wrong--period. It is wrong because it is dishonesty; the purchasing agent is cheating his or her employer, treating the employer as a means to the agent's ends. This, Kant would say, violates the categorical

imperative. Consequences are irrelevant in determining the morality or immorality of an action; dishonesty is dishonesty and bribery is bribery. One's duty is always to tell the truth, that is, to be honest. Kant, consequently, probably would uphold the Foreign Corrupt Practices Act.

Rand would be opposed to bribery because it involves dishonesty but not on deontological grounds. Dishonesty is unethical because of its effects, consequences, on one's own life. Dishonesty means pretending that something is not what it really is. The salesperson and agent pretend that the fiduciary relationship with the agent's employer is intact, when in actuality it is not. Refusing to perceive the facts shutting one's eyes to reality, in effect, according to Rand, is immoral because that act negates, and operates to destroy, the necessary, objective condition of sustaining one's life, namely, the use of the mind--reason--to guide one's actions. Dishonesty denies the efficacy of one's own mind and makes one dependent on the minds of others. From now on, in other words, the salesperson and agent must rely on the beliefs, the misperceptions of the employer for their deception to succeed. In the meantime, they each have turned their own perceptions away from the facts of what is necessary to sustain and enhance their lives. This, according to Rand, is not to anyone's self- interest. Rand, however, would be opposed to the Foreign Corrupt Practices Act for at least the following reason: the Act prohibits payments that are not bribery. Although the Act permits "grease" payments to low-level officials, it does not distinguish bribes from perquisites, from de facto broker's fees, or from extortion. When a payment is not covert, that is, when its acceptance is known to, and approved by, the employer, the payment ceases to be a bribe and becomes a perk. This is the moral justification of expensive luncheons and Christmas gifts. But a threat of physical force, according to Rand, ends all commitments to honesty, because truth-telling can then operate to harm one's self-interest. Rawls, following the Kantian, deontological tradition, would say that bribery is unjust period. Bribery is unjust because it violates the principles of equal liberties and of minimal social and economic inequality. The salesperson and purchasing agent are seizing unequal advantage over the agent's employer, the agent's competition, and the agent's customers. The four theories, thus, when applied to bribery, present four different points of view, although Kant and Rawls probably are in closest agreement. The people now have a framework within which to decide for

themselves exactly where they stand on the issue of bribery.


In absolute terms, the act of bribery is wrong meaning that we cannot redene duty on the basis of the benets that it brings to the wrongdoer. Yet the evidence shows that bribery continues to characterize and dominate the world of business, depending on the cultural acceptability of the practice of oering and inviting bribes. In the absence of control systems however, individualistic cultures tend to encourage a corrupt mode of life. In the long term this can take an unmanageable dimension and can cause considerable harm to the economy and society. In order to ensure that bribery is rejected without even a need to think, the organization must have an established and consistent code of ethics all regardless of geographic boundaries. Hence in the bribery case we discussed, if there is an established code of ethics, the employee will definitely reject the bribe instead of hesitating whether to accept it. Good Ethics is good business cited from Prof Bill George from Harvard. If you have good ethics, it means that your achievement is due to your talent and quality of work since you have done it without giving favors in exchange for it. Hence, if a company depends on bribe to gain business, it will crumple once it is exposed. Ethical theories only served as a guide to help us make the difficult decision. We cannot depend entirely on them. For example, using Utilitarianism solely will come to a decision that it is ethical to accept the bribery as it produce the most amount of happiness if the bribe does not get exposed. However, using Kantianism it focuses only on the act itself instead of the outcome which conclude that bribery is unethical. Regardless, they only serve as a guide and we shouldnt base our decision on the theor y alone. The ethical theory could be misuse to comfort oneself about doing the things which people know is unethical. For example, the way our group uses the theory to support our choice to go with the bribery. We know that it is wrong but we want to accept the bribe hence we use the flaws in the ethical theory to make it seem as though it is ethical. The final decision lies with you and the ethical theories can only guide you as far as you want it to. If you made the firm decision to go ahead with the bribe, your subconscious mind will find the loopholes to support your unethical move using the ethical theory. What an irony! If your firm decision is to reject the bribe, you will use the ethical theory to support it. However, if you


are undecided but definitely know that bribery is wrong, then the ethical theory might be useful to help you make the correct ethical decision. However, I do not think that people will refer to ethical theories when making such decision. They will make the decision based on their own value and beliefs which more or less come from ethical theories. I believe that everyone have their own set of belief and values that they adhere to most of the time except in time when one belief get overwritten by another. For example, if the employee does not get the bid for the project, he will be fired and he has a family to support and cannot afford to lose his job. At that time he will definitely take the bribe as his belief and value that taking care of family is his utmost priority now and he will definitely not even think about using ethical theories. It is definitely not ethical to accept bribe but also not ethical to not take care of his family. But when the worst case scenario happen, he will be in the lose-lose situation where he will be unable to take care of his family. Hence accepting the bribe might not be a wise choice when he consider that the worst case scenario will happen. However, at that point he has not much of a choice and wont be rational in his decision since his family come first.


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Acemoglu, D., & Verdier, T. (2000). The choice between market failures and corruption. American Economic Review, 90(1), 194211. Bardhan, P. (2006). The economists approach to the problem of corruption. World Development, 34(2), 341348. Becker, G. S. (1968). Crime and PunishmentEconomic Approach. Journal of Political Economy,76(2), 169217.

Donaldson, Thomas and Patricia H. Werhane, eds. (1988), Ethical Issues in Business: Philosophical Approach, third edition, Englewood Cliffs, NJ: Prentice-Hall, Inc.

Kaufmann, D., & Kraay, A. (2007). Governance indicators: where are we, where should we be going? World Bank Policy Research Working Paper, World Bank, Washington.

Lambsdorff, J. G. (2004). Framework document 2004. A background paper to the 2004 corruption perceptions index. Transparency International and Passau University.

Pastin, Mark and Michael Hooker (1988), "Ethics and the Foreign Corrupt Practices Act," in Ethical Issues in Business: A Philosophical Approach, third edition, Thomas Donaldson and Patricia H. Werhane, eds., Englewood Cliffs, NJ: Prentice-Hall, Inc., 48-53.

Transparency International (2009). Global corruption barometer. Berlin: Transparency International.