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May 1, 2012 10:46 AM

Business

Envelopes Stuffed With Cash

What message is really being sent by envelopes stuffed with cash? Wal-Mart, of course, is looking into allegations that it sped up its Mexican expansion with a series of bribes. And Avon has for years been looking into whether...

What message is really being sent by envelopes stuffed with cash?

Wal-Mart, of course, is looking into allegations that it sped up its Mexican expansion with a series of bribes. And Avon has for years been looking into whether its entry into China had some illicit help.

About half the people I talk to are shocked by the bribery allegations. The other half is shocked the first half is shocked.

Bribery is a simple fact of life in many parts of the world. Another simple fact is that large, U.S.-based multinational companies are held to a higher standard. Bribes that are simply the cost of doing business for a Mexican company could theoretically mean jail time for a U.S. executive operating in the area.

There are all kinds of moral and economic arguments for why bribes are bad.

In the case of the allegations against Wal-Mart, the question becomes, Why?

As Jonathan Low, a partner and co-founder of consulting firm Predictiv, asks, "With all their resources, with their technology, with their efficiency, why do they need to do this? Why can't they just come in and steamroll these [Mexican] municipalities?"

It could be that the world has simply upped its game and U.S. firms are starting to feel the strain.

"There is a concern in corporate circles that people outside the U.S. aren't as respectful of the U.S. as they used to be and it makes the world more competitive for U.S. corporations," Low says. "Is this a sign of a U.S. [company] caving to pressures in ways they wouldn't have comprehended a decade or two ago?"

That's an open question.

But with companies taking an ever more global outlook, this is the right time to ask.
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