With the recent news of Walmart making some under-the-table payments in Mexico designed to quicken the process of new store development, the debate rages on the ethics behind such moves. Ernst & Young recently surveyed chief financial officers around the world on the premise of a “willingness to make cash payments to win or retain business.” Apparently, 15 percent of those polled indicated “yes.” Really, though, I’ll bet the actual number is a bit higher (it was 84 percent in Brazil), as you can imagine the reluctance to fess up on this matter, even under anonymous circumstances.
Normally, I am very anti-Walmart for hosts of reasons. However, in this case, I’m on their side rather than jump on the popular bandwagon of Walmart’s perceived unethical behavior. There are many countries—with Mexico close to the top of the list—where it’s just a part of doing business. Without handing over some envelopes full of cash to city planners and their ilk, the wheels of commerce and progress move very slowly—and sometimes not at all. While this mode of doing business is generally frowned upon in the U.S., we all know it exists. If you doubt that statement, talk to real estate developers in New York City or Chicago.
E&Y’s annual global fraud survey of 400 finance chiefs found a slightly greater tolerance of bribery compared with the previous year. 39 percent of respondents also said that bribery or corrupt practices “occur frequently” in their countries.
“Even if management is strongly communicating that bribery and corruption isn’t OK, they don’t ever see anyone being punished for that,” commented Richard Sibery, E&Y’s leader of fraud and investigations in the Americas.
What do you think?
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