Reference no: EM131700684

Problem: A few years ago, IBM announced that it had fired the three top managers of its Argentine division because of their involvement in a scheme to secure a $250 million contract for IBM to provide and service the computers of one of Argentina's largest state-owned banks. The three executives paid $14 million of the contract money to a third company, CCR, which paid nearly $6 million to phantom companies. This $6 million was then used to bribe the bank executives who agreed to give IBM the contract. These bribes are not necessarily illegal under Argentine law. Moreover, the three managers argued that all companies have to pay bribes to get new business contracts, and they were not doing anything that managers in other companies were not.

Questions: 1. Either by yourself or in a group decide if the business practice of paying bribes is ethical or unethical.

2. Should IBM allow its foreign divisions to pay bribes if all other companies are doing so?

3. If bribery is common in a particular country, what effect would this likely have on the nation's economy and culture?