All India Management Association (AIMA) 2007 M.B.A Marketing Management Business Ethics

• Companies also face the very real possibility of being pushed to pay more and more bribes as their reputation as a bribe-payer spreads. 1 European businessman, after his company made its 1st few payments, stated that bribery became a part of the normal course of business because bureaucrats worldwide expected similar treatment.
• Lastly, there are international trade implications surrounding bribery. Bribery degrades markets. Economist Paolo Mauro, in the article “Corruption and Growth,” obtains a direct link ranging from high levels of corruption and low levels of foreign direct investment. Though Mauro’s work does not discuss this finding, Nichols offers 3 likely reasons. First, corruption truly increases the amount of time a company must spend with a bureaucracy; second, corruption makes it more difficult to find information, which increases transaction costs, and third, corrupt relationships are less predictable and less enforceable. There’s probably a 4th cause too, which is that most business people are good people and have a distaste for endemically corrupt environments.
• Corruption also drastically affects economic development by causing a misallocation of resources. Africa is littered with bridges instead of hospitals. But more damaging is the fact that in endemically corrupt systems, regular people are not getting served by the government; they don’t trust the government so they don’t interact with the government. But people have to get things done. So they create their own systems to do things, such as resolve disputes or enforce contacts or even police neighborhoods.
• These systems, however, “are not free.” They cost money. So money goes to supporting the government system and money goes to supporting the shadow system; twice as much money goes to bureaucracies as it should. That means money is not going to increasing food production, or to health, or to enlarging the economy. < TOP >

4. There’s no doubt that corruption, endemic in emerging economies around the world, throws economic development into chaos.
• It affects decisions made by bureaucrats,
• Degrades the quality of those in power, and
• Discourages foreign investment.
• It’s also an increasingly hot business topic, with a growing number of influential business and political leaders from around the globe regularly pinpointing corruption as 1 of the greatest threats to global economic development.
different unethical behaviors and their impact on market system are:
Coercion
The use of threat or force to prevent sellers" from dealing with certain customers, and buyers from purchasing from certain sellers amounts to coercion. Coercion reduces effective competition and outcomes in fewer resources being allocated to producing goods and services than would be the case if free competition had been allowed.

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