Reference no: EM132894999

The Foreign Corrupt Practices Act prohibits U.S. firms from making payments to foreign government officials with the aim of gaining or maintaining business, but payments are acceptable if they do not violate local laws. For instance, payments to officers working for foreign corporations are legal. Most other countries do not have such legal guidelines.

Bribery is a common way of doing business in many underdeveloped countries. Government jobs there often do n0t pay very well, so it's tempting for officials to supplement their income with bribes. In addition, in many countries, the penalties for demanding and receiving bribes is little or nonexistent. You are an American who works for a large European multinational computer manufacturer.

You are currently working to sell a $3 million system to a government agency in Nigeria. The Nigerian official who heads up the team that will decide who gets this contract has asked you for a payment of $20,000. He said this payment will not guarantee you get the order, but without it he could not be very encouraging. Your company's policy is very flexible on the issue of "gifts" to facilitate sales. Your boss says that it is fine to pay the $20,000, but only if you can be relatively assured of the order.

You are not sure what you should do. The Nigerian official has told you specifically that any payment to him is not to be mentioned to anyone else on the Nigerian team. You know for certain that three other companies are also negotiating to get this contract. You have heard through the grapevine, but it's unconfirmed, that two of those companies have turned down the payment request. What would you do?

Questions for answer:

1. Is the payment unethical if there is no law forbidding it? How this decision is related with cognitive dissonance?

2. What are viable alternatives to paying the $20,000 that would be acceptable to secure the contract?