Willingness to engage in bribery suggests not just a lack of ethics, but a lack of managerial skill.
President and CEO of Wal-Mart Stores, USA, Eduardo Castro-Wright (Photo: David McNew/Getty)
Everyone is aware by now of the stunning exposé on alleged bribery at Wal-Mart de Mexico. As promised, this is the next in what will likely be a series of commentaries I’ll post on the scandal.
It’s worth starting at the very beginning by considering the basic question: What’s wrong with bribery in the first place?
The fundamental ethical problems with bribery are clear. Bribery of public officials induces those officials to engage in acts of disloyalty. Civil servants are sworn to uphold the public good, and every decision they make needs to be made on that basis. Bribery violates that principle; it interferes with the decision-making of the functionaries of a democratic system.
Bribery also tilts an otherwise fair playing field. It’s one thing for a company like Wal-Mart to muscle into new territory by means of its superior management techniques and hyper-sophisticated supply-chain. Such advantages are well within the rules of the game. If you invent a better mousetrap, the maker of the old mousetrap has little grounds for complaint when driven out of business. But bribery is well outside the rules of the game. It represents a refusal to compete openly and fairly, and an attempt instead to gain special advantages that have nothing to do with ingenuity or with the quality of one’s services.
And, from a systemic point of view, bribery is a zero-sum game that acts as a drag on an economy. Consider: when two companies engage in bribery as a competitive strategy, the only guaranteed winner is the undeserving recipient of the bribe. The companies involved suffer unnecessary expenses that could better have been spent on research and development, on higher wages for employees, and so on—if only they were jointly able to forgo the bribery.
There is, from an ethical point of view, no plausible pro-bribery argument.
What about cultural differences, you ask? We are all aware that, in doing business in a foreign country, we are liable to run into ways of doing business that would not pass muster back home. And we’ve all heard the saying, “When in Rome, do as the Romans do.” But that saying is no doubt used as an excuse for wrongdoing far more often than it is used as a reminder to be sensitive to cultural variations. The trouble is that bribery is a lousy way to show respect for someone’s culture. You don’t respect a culture by corrupting its public officials. Never mind the fact that bribery, though perhaps not uncommon in Mexico, is none the less illegal.
But perhaps the most stinging critique of bribery is this. If you have to engage in bribery in order to succeed, it implies that you are not very good at your job. Eduardo Castro-Wright, the man who was Wal-Mart de Mexico’s CEO at the height of its alleged bribery activities, was considered a true Wal-Mart star. In fact, he’s now vice chairman of Wal-Mart Stores, Inc. And his reputation was built in no small part upon his stunning success in pushing Wal-Mart de Mexico’s rapid expansion. But, as it turns out, he wasn’t quite as great a manager as he seemed to be: the rapid expansion wasn’t so much a credit to him as it was a credit to the campaign of what is alleged to be carefully-targeted bribery conducted by his underlings. As is so often the case when it comes to white-collar crime, this suggests that senior managers at Wal-Mart de Mexico were not just lacking ethically, but lacking as managers too.
Blogs & Comment
What's wrong with Wal-Mart bribery, anyway?
Willingness to engage in bribery suggests not just a lack of ethics, but a lack of managerial skill.
By Chris MacDonald
President and CEO of Wal-Mart Stores, USA, Eduardo Castro-Wright (Photo: David McNew/Getty)
Everyone is aware by now of the stunning exposé on alleged bribery at Wal-Mart de Mexico. As promised, this is the next in what will likely be a series of commentaries I’ll post on the scandal.
It’s worth starting at the very beginning by considering the basic question: What’s wrong with bribery in the first place?
The fundamental ethical problems with bribery are clear. Bribery of public officials induces those officials to engage in acts of disloyalty. Civil servants are sworn to uphold the public good, and every decision they make needs to be made on that basis. Bribery violates that principle; it interferes with the decision-making of the functionaries of a democratic system.
Bribery also tilts an otherwise fair playing field. It’s one thing for a company like Wal-Mart to muscle into new territory by means of its superior management techniques and hyper-sophisticated supply-chain. Such advantages are well within the rules of the game. If you invent a better mousetrap, the maker of the old mousetrap has little grounds for complaint when driven out of business. But bribery is well outside the rules of the game. It represents a refusal to compete openly and fairly, and an attempt instead to gain special advantages that have nothing to do with ingenuity or with the quality of one’s services.
And, from a systemic point of view, bribery is a zero-sum game that acts as a drag on an economy. Consider: when two companies engage in bribery as a competitive strategy, the only guaranteed winner is the undeserving recipient of the bribe. The companies involved suffer unnecessary expenses that could better have been spent on research and development, on higher wages for employees, and so on—if only they were jointly able to forgo the bribery.
There is, from an ethical point of view, no plausible pro-bribery argument.
What about cultural differences, you ask? We are all aware that, in doing business in a foreign country, we are liable to run into ways of doing business that would not pass muster back home. And we’ve all heard the saying, “When in Rome, do as the Romans do.” But that saying is no doubt used as an excuse for wrongdoing far more often than it is used as a reminder to be sensitive to cultural variations. The trouble is that bribery is a lousy way to show respect for someone’s culture. You don’t respect a culture by corrupting its public officials. Never mind the fact that bribery, though perhaps not uncommon in Mexico, is none the less illegal.
But perhaps the most stinging critique of bribery is this. If you have to engage in bribery in order to succeed, it implies that you are not very good at your job. Eduardo Castro-Wright, the man who was Wal-Mart de Mexico’s CEO at the height of its alleged bribery activities, was considered a true Wal-Mart star. In fact, he’s now vice chairman of Wal-Mart Stores, Inc. And his reputation was built in no small part upon his stunning success in pushing Wal-Mart de Mexico’s rapid expansion. But, as it turns out, he wasn’t quite as great a manager as he seemed to be: the rapid expansion wasn’t so much a credit to him as it was a credit to the campaign of what is alleged to be carefully-targeted bribery conducted by his underlings. As is so often the case when it comes to white-collar crime, this suggests that senior managers at Wal-Mart de Mexico were not just lacking ethically, but lacking as managers too.