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  • Foreign Corrupt Practices Act Quiz

    Managers and employees of global operations must be familiar with the Foreign Corrupt Practices Act (FCPA). It is illegal to accept or offer a bribe. How well do you know the Foreign Corrupt Practices Act (FCPA)? Take this quiz, published by the Wall Street Journal . It was adapted from guidance published by the Justice Department and the SEC. 1. Gas Corp. is a large energy firm based in New York and listed on the New York Stock Exchange. It enters into a joint venture with a private European company, Euro Gas Ltd., to bid on a contract to develop an oil field in Nigeria. Senior vice presidents at Gas Corp. and Euro Gas meet in New York and decide to hire a consultant, Middleman Inc., to funnel payments on the joint venture's behalf to a deputy oil minister with influence over the bidding process. The payments are invoiced as consulting fees, but Middleman Inc. passes most of the money to the deputy minister. The joint venture wins the contract. Which entities are liable under the FCPA? A) Gas Corp. B) Gas Corp. and Euro Gas C) Middleman Inc. D) All of the above Answer: All of the above. Gas Corp. is both based in the U.S. and listed on a U.S. stock exchange, either of which means it is bound by the FCPA. Euro Gas is liable because its executives made the decision to pay the bribe while they were in New York. And Middleman Inc., even though it never took any actions in the U.S., could be charged with conspiring with the other two companies to violate the FCPA. (Euro Gas could be charged in the same conspiracy, even if its executives had never stepped foot in New York.) *** 2. At a trade show in Shanghai, Widgets Co., a Kansas City, Mo., company that wants to expand its presence in Asia, invites current and prospective customers out for drinks and pays the bar tab. Those invited include midlevel executives at companies owned or controlled by the Chinese government. Is this a violation of the FCPA? Answer : No, the FCPA doesn't prevent companies from promoting their businesses or providing legitimate hospitality. However, be mindful that the Justice Department and the SEC consider employees of state-owned enterprises to be foreign officials, meaning it is illegal to bribe them under FCPA. *** 3. After drinks, Widgets Co. executives invite executives at one of China's state-owned utility companies to the U.S. to talk about a lucrative contract with the utility on which the American firm is bidding. Widgets pays for the officials to fly first class with their spouses to Las Vegas and puts them up in a casino hotel for a week before meeting with the Chinese executives on the final day of the trip to discuss the contract. Is this a violation of the FCPA? Answer: Yes. The trip can barely be said to have a legitimate business purpose. It is extravagant and clearly meant to curry favor with the Chinese executives, who have influence over whether Widgets wins the contract. *** 4. Mining Corp., a mining company listed on the New York Stock Exchange, just identified a new mineral deposit in Afghanistan. The company needs to build a road from the deposit to a nearby port and hires a local agent to help it secure the necessary permits from Afghan authorities. The agent informs Mining Corp.'s international vice president that he plans to make a one-time small cash payment to an Afghan clerk, so the clerk will stamp and file the permit applications quickly. In the past, the clerk has sat on such applications for months. The vice president authorizes the payment. Does the payment violate the FCPA? Answer : No. The FCPA contains an exception for "facilitating payments"-a euphemism for grease bribes-that are paid to obtain a routine service. In other words, Mining Corp. is paying the clerk to do something the clerk is supposed to do-file applications for permits. A note of caution, however: Facilitating payments may be illegal in the country in which they are paid, and they have to be recorded accurately in a company's books and records. *** 5. A few months later, the agent tells Mining Corp.'s vice president that he can't get an environmental permit for the road because the planned route would cut through protected wetlands. Mining Corp. could build the road around the wetlands for about a million dollars more. Or, the agent says, the company could make a $3,000 cash payment to the director of the country's natural-resources department, who in return will sign the permit so the road can be built on the wetlands. The vice president authorizes the payment. Is this a violation of the FCPA? Answer: Yes. The payment is clearly designed to influence the director, a foreign official, into using his power improperly. Unlike the clerk, the director has discretion to approve or reject the application. Your score 5 out of 5 : You're practically a compliance officer. 4 out of 5 : Your company provides good FCPA training. 3 out of 5 : You ignored your company's FCPA training. 2 out of 5 :...
  • Human Capital Top Concern of CEOs

    Human capital was the top concern of global Chief Operating Officers (CEOs) in a recent survey by the Conference Board , a global, independent business membership and research association based in New York. Their mission is "To provide the world's leading organizations with the practical knowledge they need to improve their performance and better serve society." Actually, human capital or the people thread underlies all of the CEO concerns. Human capital was chosen number one in Asia and in Europe. They see engaged and productive employees as the critical difference in their business. They feel that they can better compete by providing employees with training and development, raising engagement, and retaining top talent. CEOs in the United States (U.S.) are concerned about operational excellence (performance), government regulation, customer relations, innovation, and human capital. In terms of operational excellence, U.S. CEOs want to reduce costs. They are concerned about employee engagement and how to increase productivity through more motivated and excited employees. In addition to technology in innovation, CEOs want to create a culture of innovation. Why do the concerns of the U.S. CEOs differ from those of the global CEOs?
  • Internet Trends 2013

    Managers scan the external environment to find opportunities and threats. One way to scan the environment is to look for trends. Mary Meeker has uploaded her latest report on Internet trends, which can be viewed below. KPCB Internet Trends 2013 from Kleiner Perkins Caufield & Byers Some of the highlights: Google, Microsoft, and Facebook are the top global internet properties. Emerging markets, especially China, continue to lead in the growth in global Internet users. “Wearables, drivables, flyables and scannables” will become more popular. What other trends did you find interesting? Which industries might be interested in these trends?
  • Test Your Global IQ

    Managers must work hard to improve their relationships around the world. A Business for Diplomatic Action [BDA] study several years ago found three "root causes" of "anti-American sentiment": Effects of globalization: "People in many countries feel left out; they feel that they can never be a part of, or enjoy the benefits of, the globalization movement led by U.S. business expansion." The impact of American popular culture: The BDA paper found that some of America's entertainment "is often most attractive to young people in repressive cultures who are thus led to believe that America is a criminally violent and sexually immoral nation." The perceived personality of Americans: "Research from 130 countries confirms that Americans are broadly perceived by others as arrogant, ignorant, lacking in humility, loud and unwilling to listen." Take Pew’s 10-question quiz to test how much you know about the worldwide image of the United States based on key findings from the Spring 2012 survey by the Pew Research Center's Global Attitudes Project. Take the quiz What did you find out?
  • Managers ensure compliance for anti-bribery

    Recent bribery allegations against Wal-Mart in Mexico and Hollywood movie studios in China should remind managers that they are responsible for ensuring that clear anti-bribery policies are in place and that relevant staff at the least receive sufficient training . (See 3M's Anti Bribery Policy for an example.) The Foreign Corrupt Practices Act (FCPA) enacted in 1977 makes it illegal for Americans to bribe foreign officials. A bribe is offering anything of value (money or gifts) to gain a competitive advantage. The Securities and Exchange Commission ("SEC") and the Department of Justice ("DOJ") are jointly responsible for enforcing the FCPA. The SEC brings civil enforcement actions against issuers and their officers, directors, employees, and agents. The DOJ criminally prosecutes issuers and their officers, direc­tors, employees, agents, and domestic concerns, as well as foreign persons and entities (acting within the U.S.). According to the U.S. Department of Justice , The anti-bribery provisions of the FCPA prohibit the willful use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay, or authorization of the payment of money or anything of value to any person, while knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to a foreign official to influence the foreign official in his or her official capacity, induce the foreign official to do or omit to do an act in violation of his or her lawful duty, or to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person. In this video, Fareed Zakaria reports "How to beat bribery ." India's Chief Economic Adviser, the economist Kaushik Basu, uses a game theory simulation to suggest that "bribery in general will decrease if people who are asked for bribes can pay the money and they can still go and complain without worrying that they will be prosecuted. And the corrupt official who takes the bribe will know that if they take the money they face twice the penalty." Read the attached Investor Bulletin. What is "anything of value"? How is "foreign official" defined? What is an "indirect bribe"? What are the three situations in which payments to foreign officials would not result in liability under the FCPA? What do you think of Basu's way to fight bribery?
  • China isn't the only country with Overtime Abuse

    Apple joined the Fair Labor Association (FLA) in January 2012 and in February, FLA inspected Foxconn , an Apple supplier with factories in China. Three Chines factories, two in Shenzhen and one in Chengdu, were inspected. Two parts to FLA's investigation at the three Foxconn facilities were: (1) An assessment of the treatment of workers and of working conditions in the factories, which seeks to identify root causes of workers' rights violations. This assessment analyzes information from several sources, including document review, physical observation, management interviews, and onsite and off-site interviews with workers. (2)Onsite, anonymous surveys to hear directly from the workers about working conditions and how they are treated in the factories. In its report , FLA found excessive overtime and problems with overtime compensation. Employees were found to work more than 60 hours per week and sometimes 11 or more days in a row. Foxconn, headquartered in Taiwan, has promised to cut hours worked, not salaries paid. By July 2013, no Foxconn worker will labor for more than 49 hours a week. This is the limit dictated by Chinese law. China isn't the only country with unpaid overtime. In the United States, fair wage cases are investigated by the Labor Department , and most cases investigated are for unpaid overtime . The Fair Labor Standards Act (FLSA), passed in 1938, delineated between manager, hourly employee, administrative worker, and the outside salesperson. It established the eight-hour workday, the 40-hour workweek, and time and a half pay for the workweek over 40 hours. Exceptions to the law are exempt employees: executive, administrative, professional, and outside sales employees. (See attached for overtime pay requirements.) Managers need to know the law. Employees on the employer's premises, under the employer's control, using the employer's tools are working and should be paid for that time. One type of overtime abuse is misclassifying employees as exempt. For example, some companies designate workers as supervisors or managers, but they don't supervise other employees and don't have authority over work schedules. Another type of overtime abuse is having workers perform job duties off the clock, such as working while taking less time for eating lunch or not compensating properly for travel time to run errands before or after work. Employees can work flexible hours, telecommute, and be attached to electronic devices to perform their job duties anywhere, anytime. How can managers keep up with the number of hours that people work and when they work?
  • Cisco Connected World Technology Report

    In this video, a panel of Cisco executives discusses the findings of the 2011 Cisco Connected World Technology Report. The next generation of workers will influence companies' abilities to compete. Read the report at More than half of the study's respondents cite the Internet as an "integral part" of their lives. "For some, it more essential than owning a car, dating, and going to parties. Also, one in three would prioritize social media freedom, device flexibility, and work mobility over salary in accepting a job offer. These and numerous other findings provide insight into the mindset, expectations, and behavior of the world's next generation of workers and how they will influence everything from business communications and mobile lifestyles to hiring, corporate security, and companies' abilities to compete." Did this report describe you? Can you live without the Internet? Do you care more about your smartphone than your car? Video streaming by Ustream
  • 2012 Predictions

    What should managers expect from the business environment in 2012? In this Slideshare presentation, futurist Ross Dawson predicts the global themes for 2012. What will change in 2012? What will stay the same? Which of these predictions do you think will be most important to managers? 2012: 12 Themes - What to expect in the year ahead View more presentations from Ross Dawsn