Company A, a U.S. company, has a subsidiary located in Country Z, where various forms of bribery


Company A, a U.S. company, has a subsidiary located in Country Z, where various forms of bribery are accepted and expected. To oversee the operations of the subsidiary, Company A sent one of its top U.S. managers to Country Z. Manager M engaged in the following activities while in Country Z during recent months of operation:
a. Paid the equivalent of $200 to a government inspector to reschedule the inspection date of a new manufacturing facility from April 15 to February 15.
b. Paid an average of $50 each to four local police officers who are in charge of patrolling the area around the new manufacturing facility. The officers have agreed to increase the number of times they check the area.
c. Company N, a domestic company, is in competition with Company A for a government contract. Company A has learned that N has given approximately $5,000 to the official who will make the final contract decision. To remain in the running, Manager M authorized Company A to pay an equal amount to the official.
d. The electric utilities are government owned and operated. Due to the frequency of severe storms, there are often power outages due to downed lines. Manager M has paid the official in charge of coordinating repair crews $200 to ensure that the manufacturing plant’s power is one of the first restored. Under the Foreign Corrupt Practices Act, as amended, which of the above activities do you think would be considered illegal? From an operations standpoint, which of the above activities would be considered bad management practice? Are there solutions other than bribery?

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Financial and Managerial Accounting the basis for business decisions

ISBN: 978-0078111044

16th edition

Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello

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