The pirate industry has taken hold in Somalia, and with 23,000 ships coming through the Gulf of Aden annually, the operations of pirates appear to be located centrally. There are 18 to 21 ships hijacked each year, with the hijacking going all the way through the harbor negotiation stages. Another 45 ships, on average, have been boarded by pirates, with necessary steps taken to remove them or pay ransoms. Still another 45 ships, on average, are fired upon by pirates, with no further possession of the ship. For every 1,000 ships, there are about 90 that are confronted by pirates. Because of these figures, the security business-those who deliver the ransoms - is booming. Most insurers agree with Thomas Jefferson, who said that force was more economical and more honorable than paying ransoms and that the best protection is the threat of lethal force, which means having people on board the ships who are armed, have plenty of ammunition, and are specially trained. However, a four-person security team costs about \(\$ 30,000\) per day. In exchange, insurers will reduce the cost of insurance by \(\$ 20,000\). One of the problems security firms face is recruiting enough security team members who have sufficient training. Let us posit a scenario: On September 11,2013, a group of pirates board a Transnational ship that is, at the time of the takeover, sailing off the coast of Africa. The pirates have demanded payment of \(\$ 25\) million, or \(\$ 1\) million for each crewmember, and imposed a deadline of five hours for Transnational's decision and promise of payment. The pirates have also indicated that they will begin killing crewmembers one at a time if their deadline for Transnational's agreement to the payment is not met. Davis has advised Transnational to go ahead and simply pay the pirates because "Lives of employees are at stake and my job is protecting employees." However, a Transnational senior officer has cautioned in a meeting, "That's a bribe, and Transnational has a longstanding practice of not paying bribes...........

Discussion Questions
1. The officers, the board, and Davis seek your advice. Be sure to apply all applicable principles, forms of analyses, readings, and so on, you have studied to date. What advice would you give?
2. Is the descriptor "bribe" accurate in this case?
3. Is this situation different because human life is involved?
4. What impact does the institutionalization of piracy in Somalia have on companies' decision-making processes with regard to handling the pirates and preventing pirate attacks?