Paying Heed to Foreign Practices

The Situation

Assume that you're an up-and-coming manager at a medium-sized manufacturing company.Your company is one of only a few companies making certain components for radiant floor heating systems.The primary advantage of these systems is that they are energy efficient and can result in significantly lower heating costs.Although radiant floor heating is just catching on in the United States, there is a lot of potential in foreign markets where energy is expensive.You've been assigned to head up your company's new operations in a Latin American country.Because at least two of your competitors are also trying to enter this same market, your boss wants you to move as quickly as possible.You also sense that your success in this assignment will likely determine your future with the company.

You would like to build a production facility and have just completed meetings with local government officials.However, you're pessimistic about your ability to get things moving quickly.You've learned, for example, that it will take 10 months to get a building permit for a needed facility.Moreover, once the building's up, it will take another 6 months to get utilities.Finally, the phone company says that it may take up to 2 years to install the phone lines that you need for high-speed Internet access.

The Dilemma

Various officials have indicated that time frames could be considerably shortened if you were willing to pay special "fees."You realize that these fees are bribes, and you're well aware that the practice of paying such fees is both unethical and illegal in the United States.In this foreign country, however, it's not illegal and not even considered unethical.Moreover, if you don't pay and one of your competitors does, you'll be at a major competitive disadvantage.In any case, your boss isn't likely to understand the long lead times necessary to get the operation running.Fortunately, you have access to a source of funds that you could spend without the knowledge of anyone in the home office.

Questions to Address

After reading and considering the information provided, please answer the following questions.

1. What are the key ethical issues in this situation?

2. What do you think most managers would do in this situation?

3. What would you do, and why?