Starnes-Brenner Machine Tool Company–to Bribe or Not to Bribe

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Starnes-Brenner Machine Tool Company–To Bribe or Not to Bribe

Several questions should be emphasized in the case; the question of ethics, the question of self-reference criterion and a more important question of what role should the marketer play; how much should they try to change the system and how much should they try to become a part of the system. A strong point should be made that in a country where bribery is part of the way of doing business, there is an identifiable system of how much bribes are made, how much for different activities, when paid and to whom paid. One retired British executive once graded bribes as: 5% of $200,000 will be interesting to a senior official below the top rank, while 5% of $200 million justifies the serious attention of the head of state.[1] Anyone being sent to a country where bribery is an important aspect of doing business should be well versed on the system of bribery in the country and be prepared to deal with it effectively.

Pertinent Facts

The Latin American sales effort of Starnes-Brenner Machine Tool Company of Iowa City, Iowa centers around a one-man operation in Latino. The company is changing its international marketing emphasis and is going to act more aggressively as an international firm. A new salesman is going to replace the Latino representative who is retiring. During the training period the new man who is a company man from the U.S., is introduced to the role bribery plays in doing business in Latin America. He questions the ethics of the practice and the rationality of it as a means of doing business profitably. The retiring representative points out that the firm in Latino, in addition to making a profit, is stimulating the economy of the country and that since bribery is a recognized means of doing business it is stimulating to the economy of Latino. He proposes that ethics will rise with an increase in the standard of living.

Bribery persists as a problem the world over. In China, many...
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