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Corruption is one of the challenges of the multinational nowadays. A study conducted by transparency international among 73 000 people in 2008 found that 53% of them find the private sector corrupted (Corruption, 2009, p.2). Furthermore, in 2007 the World Bank published a document about the different form of corruption in specific sectors that shown incredible numbers (Corruption, 2009, pp.3-16). Moreover, the different practices of corruption make it difficult for a manager to decide whenever he or she should follow the uses of the host country or act according to his or her own country law or the multinational policies and practices. Meanwhile, for most countries like China, where the use of “guanxi” is more as a cultural norm as a bribe, it is difficult for the manager to expect to maintain the competiveness of the firm without following the common cultural rules (Corruption, 2009, p.3). These practices are most likely to be found in developing countries and according to some people “the lack of strong institution requires this informal network” (Corruption, 2009, p.4). Besides, a study using the Hofstede’s classification shown that there is a link between the level of corruption and the cultural characteristics. Nonetheless, developed countries face some corruption problems too. Using the example of Volkswagen and Siemens it is seemingly obvious that the problem is not only been faced by developing countries, but yet, they are trying to adjust changes in ethical norms and values (Corruption, 2009, p.5). However, with the business environment changing that is giving advantage to the western practice of rule of law which totally forbid any king of corruption even the use of “guanxi”, what should be the conduct followed by the multinationals?

Problem The problem faced here by the multinational is to determine whenever the practice so called corruption in some countries, and being tolerate in others are necessary or not. In other words, where is the limit between building a long term friendship for a partnership and the using of bribery or corruption? According to Corruption 2009, the cultural trait is one of cause of the corruption problem (p.8). In another hand, the poor countries are teeming with low educational level workers who end up with extremely low wages and it is somehow tolerated for them to accept illegal payment (Corruption, 2009, p.8). Then, in some countries, the officials are using “pretty bribery” to have their job done on time (Corruption, 2009, p.8). The multinationals in order to respect deadlines will face this kind of bureaucracy. Thus, countries with wide natural resources will use their power to influence economic transaction in general and that will promote the common use of bribery and corruption. Moreover, in most countries, it is usual to bring a gift for a partner. Some can perceive it as a way to influence the decision of the partner or the official and that can be assimilate to corruption at long term. As a result, the international managers end up acting legitimately but that can be illegal.

Solutions Adopt an international policies and practices regarding bribery or corruption in general: As advantage, it might permit to the firm to determine what is allowed, and in what case the manager or an employee can act without being illegal. As disadvantage, it might slow down the business practice of the multinational because what is corruption in the parent firm might be acceptable in the host country. As a result it can affect their competiveness. Apply the national law to the local foreign owned enterprises: That can have the advantage of having an uniform law regarding corruption in all subsidiaries. However, the culture and the level of development often are not the same. It can be view as the firm is trying to impose its culture, law and rules to the host country and that will be a disadvantage. Develop a social responsibility policy: It will permit to the company to be perceived as a part of the community. However it might be willing to invest itself in such activity because usually it takes a huge amount of resources.

Solution chosen The solution we chosen is the first and the third. The first because it will point out the limit of the firm in term of bribery, “guanxi” or whatever the acceptable practices are in the host country. Also, developing a social responsibility policy make the company a part of the community and can contribute to diminish the amount of illegal practices. In addition, it will enhance their reputation in the marketplace and increase customers’ loyalty (Bricoe, Schuler, & Tarique, 2012, p.169).

Implementation First of all, the IHR manager should check the institutional legal context of the host country, the national law and regulations. Then he or she should check if this country is enrolled in any establishment of labor standards by an international institution. Furthermore, the IHR manager would have to the formal and informal approach used by local business people for example by hiring a local consultant. Meanwhile, he or she should be aware of the extra territorial law certainly if it is an US firm. And then, the IHR managers can develop strategic code of conduct policy that defines acceptable behaviors (Bricoe, Schuler, & Tarique, 2012, p.171). This can be made by setting an ethical guideline. The employee should be providing with a proper training to respond to unusual situations. In these cases, the employees can refer themselves to Thomas Donaldson questions to determine if the practice is necessary (Bricoe, Schuler, & Tarique, 2012, p.164-165). If payments have to be made, they have to be recorded clearly and precisely in what circumstances. This might help to protect the firm for future prosecution. At last, the company must develop a social responsibility policy by contributing to the economic development of the community where they are operating. For example help to build school or hospitals, donation to orphanages and be fervent actor of the protection the environment (Bricoe, Schuler, & Tarique, 2012, p.169).

Conclusion People comes from different origins, the perception of what is right or wrong might not be the same. The ethical standard for one community can be widely different from another. As a multinational firm, the IHR manager should be open minded enough to accept the existence of these differences. However, there should have a limit for some practices. That is why companies should implement an ethical guideline to define the moral value and principles they want to follow to be sure to act in legality and legitimacy (Bricoe, Schuler, & Tarique, 2012, p.163-164).

References Briscoe, D., Schuler, R., &Tarique, I. (2012).International Human resources: policies and practices for multinational enterprises (4thed). New York and London: Routledge. Conklin, D. (2009). Corruption: the international evolution of new management challenges. Richard Ivey School of Business.